Future of Houston #2: Is Houston like Cleveland?

"Whatever else it may become, Houston will still be an oil and gas town for many years. Detroit still manufactures cars. Pittsburgh still makes steel. Plenty of U.S. cities have accepted that their best years are behind them and supplemented their legacy industries by finding a new economic equilibrium—one based to a great degree on, say, health care, higher education, a port, and a NASA facility. Cleveland, for example. I’m describing Cleveland. But who wants to live in Cleveland?"

-Evan Mintz, Texas Monthly

In my last post, I discussed two differing views on Houston's future.  One predicting that Houston's fortunes will reflect the country as a whole (a "prophetic" city).  Another where Houston will be particularly hard hit by climate change and our economic response (a "pathetic" city).  The author that posed the latter, Evan Mintz, suggested in the quote above that Houston may level out like rust belt cities before it; more specifically, Houston could end up like Cleveland.  Let's unpack that comparison, understand Cleveland a little better, and see trends in their decline that could unfold in Houston.

Houston is home to 2.3 million people; Cleveland is home to about 2 million less.  Since 1940, Houston grew about 30% while Cleveland declined 9% each decade.  Today, Cleveland is neck-and-neck with Detroit for the highest poverty rate in the US.  So why would Evan Mintz, reporter for Texas Monthly, suggest Houston could end up like Cleveland?  Fear.  Fear that what happened to Cleveland, could await Houston.  Why fear?  Because if you look back far enough, the Cleveland of past looks like the Houston of present: top 5 US city, home to among the highest concentrations of corporate headquarters, major port town, home to the world’s largest oil companies and oil refineries, highly diverse immigrant city, etc. etc.  Both cities welcomed unimaginable quantities of oil, then cleaned, contained, and shipped it around the world.  And for the 100 years before 1940, Cleveland grew 115% per decade.  So what happened?

The moment of Cleveland’s decline isn’t a single date.  Larger trends, economic and demographic, correlate with population drops.  In terms of economic trends, historians who maintain the Encyclopedia of Cleveland history at Case Western demarcate the evolution of the city’s economy into four phases.  The first phase is the building of the Erie Canal in 1815, which connected Cleveland to New York City.  It became a major source of goods from the interior’s farms, mines, and forests, as well as a budding shipbuilding center.  The second phase was the introduction of the railroad in 1851, which expanded its presence as a major hub in all directions.  It developed into an industrial center for manufacturing iron, steel, and, yes, railroads.  The third phase, starting in 1880, was a confluence of these factors that lent itself to a sustained boom for several decades.  For example, Cleveland was centrally located in the midwest, so it was the place where combinations of goods (e.g., coal, oil, iron, acid, manufactured parts) could be performed easily. As a result, the chemical industry (which underwent its own revolution) and machine-making facilities made Cleveland their home as well.  It had become economically diversified.

The end of the third phase, in hindsight, highlights the changes that were to come.  Cleveland was a place where people and companies came to make a living.  As a result, both groups were subject to persistent changes.  The composition of people who worked in Cleveland changed with immigration patterns and the companies changed as “the city's business leaders carried out major acquisitions, mergers, expansions, deaccessions, and bankruptcies in virtually every industry in every decade.”  Unionization grew rapidly in response.  Then the fourth phase began around 1970.  In one decade, a third of manufacturing jobs had gone overseas as globalization became the new mantra.  This meant the US government coordinating steel production overseas to aid relations with cold war allies.  It also meant nearly eliminating strategic tariffs and trade barriers.  Highways changed the economics of transport for a city that relied upon the canals and railroads for so long.  And new environmental laws made old-fashioned manufacturing methods much more expensive at a time when struggling firms were being cannibalized in the 1980s era of corporate raider finance.

So Cleveland’s economy had become increasingly diversified, but it was unprepared for the disloyalties inherent to large corporations.  So when things got tough, and when options became readily available, employers put Cleveland second.  Is this a particular risk of having a greater constitution of large companies within a city?  That when things are good, they’re very good, but the converse is the inverse?  Or were the economic conditions so extraordinarily bad that no amount of corporate loyalty could’ve saved Cleveland? These questions, and those considering demographic changes as causes of Cleveland’s decline, will be addressed in later blog posts.

-Brandt Weathers, June 12, 2022