Sara writes*
Pittsburgh and Detroit, known as Rust Belt cities because of their proximity to areas of heavy manufacturing, were two of the wealthiest American cities in the 20th century (Warda, 2016). Yet today, while one city is said to be a model for re-emerging sustainable cities (Mewawalla, 2024), the other is referred to as the worst case of urban decay in US history (Warda, 2016). The cities have comparable origins, and both attribute their wealth to specialisation, so what has led them down such different trajectories? What went wrong? Or perhaps more importantly, what went right?
Pittsburgh grew in the 1900s due to its favourable location at the confluence of two rivers, making it a unique trading hub with access to the Atlantic coast and the Midwest (Wikipedia, 2025). Eventually, thanks to Andrew Carniege, Pittsburgh became the “Steel City”, home to U.S. Steel, and produced close to half of America’s steel at the time (Mewawalla, 2024). However, as the city experienced deindustrialisation in the 90s, Pittsburgh was forced to diversify (Wikipedia, 2025).
Detroit, on the other hand, specialised in the automotive industry in the early 20th century and became known as the “Motor City” (Briscoe, 2024), home to the “Big Three” of car manufacturers, General Motors, Ford and Chrysler (Wikipedia, 2025). However, faced with foreign competition in the 50s and 60s, car manufacturers began relocating their factories to minimise production costs, while up and comers gained market share (Warda, 2016). Meanwhile, being the most segregated city in America from the 50s to the 70s, racial tensions contributed to declining social cohesion in Detroit (Briscoe, 2024).
So how have the Rust Belt cities fared, since being confronted with the dilemma of diversification? Put simply, only one managed to diversify in time. The Steel City diversified, becoming a frontrunner in health care, education and AI (Wikipedia, 2025) while embracing its “industrial heritage” (CityTalk, 2017) and modelling partnerships between the public and private sector (Fineman, 2010). In fact, Pittsburgh enjoys the title of being one of the most liveable cities in the US (Wince-Smith, 2014). Contrastingly, the Motor City, having failed to diversify in time, lags behind. The decline of the automotive industry induced high levels of unemployment and emigration (Briscoe, 2024), leading to a 61.4% decrease in the city’s population from the 1950 to 2010 and hence, a declining tax base (ELGP, n.d.). These factors, among others, contributed to the city having to declare an 18 billion USD bankruptcy in 2013 (Briscoe, 2024).
Since then, Pittsburgh has continued to grow as a hub for high-tech innovation (Wince-Smith, 2014), but Detroit’s rebirth is also on the horizon, with its population having grown for the first time in 66 years in 2023 (Harding, 2024). Still, urban renewal has been slow, as investment has flowed primarily from the private sector (Ager, n.d.), been limited to downtown (ELGP, n.d.), and revitalisation programs do not effectively represent the needs of the most vulnerable populations (Hill, n.d.).
So how could the present prosperity of two historically similar cities be reconciled? Can Detroit learn from Pittsburgh’s success?
Bottom line: Economic diversification exhibits a make-or-break point for the economies of Pittsburgh and Detroit, while other factors like the balance between public and private investment, and the cities’ ability to encourage entrepreneurship contribute to their successes in revitalisation.
* Please help my Real Donut Economics** students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂
** Why “Real”? In short, because (a) Raworth’s claims to being a “21st century economist” denies that all of her ideas were presented by others in the 20th century and (b) she presents no viable mechanisms (besides “be nice”) for achieving equality and sustainability. My students are more realistic. In long? Read this.
Hey Sara, reading this blogpost was very interesting! I did not know a lot about the Rust Belt cities so it is nice to learn about it in this way. However, I do have question or two. Regarding Detroit, you mention that racial tensions contributed to its ‘decline’, but don’t really say to what extent. I don’t know whether you have seen the movie that was made (also called Detroit) about these racial tensions during the 70s. It is a really interesting movie that depicts the gravity of the situation at the time, showing how close the situation came to being a full-out war. Do you think this may have impacted the city more than the late diversification? Maybe production moved away out of fears of being caught up in a ‘civil war’? I wonder how you feel about this.
Hi Melle! Thank you for taking the time to read by blogspot, I am glad you liked it! I will also try to watch the movie before the final papers are due, thank you! You are completely right, the racial tensions were very important to Detroit’s public realm. While I dont have a distinct answer to the “extent” to which they contributed to Detroit’s decline, what I can say is that the racial divide was very significant to the “white flight” and subsequent suburbanisation that the city experienced. This led to a significant reduction in the city’s tax base, which constrained the city’s ability to invest and diversify its economy. Moreover, the racial tensions were significant in the labour market, for example leading to discriminatory employment practices – I expand on these elements in my paper. Thus, I would not say that the racial tensions had a “bigger” impact on the city, more so that there is a complex interconnection at play here, between the racial diversity of the city and its ability to diversify. On the point about production moving out of the city because of these tensions, I think that yes, the auto industry did not want to get caught up, but I think their relocation was more about lower costs of production, as well as following the white population.
I really liked your blog post Sara! Some good points that gave me a good overview of the case was the clear contrast between Pittsburgh’s healthcare, education and AI, with Detroit’s reliance on a declining automotive industry.
One thing that could be further developed is your point of racial segregation in Detroit. You do mention racial tensions, but it is not fully explored through any economic consequences, such as suburban flight, or underinvestment in public services. Also a more thorough explanation of the policy differences could help explain more of the baseline differences between the two cities. Economic diversification was the key for Pittsburgh’s success, but could policy differences, governance, or local leadership also be explored in the two different success stories? A podcast that explores this is “Pittsburgh Tomorrow Podcast: Richard Florida”! My friend recommended so I hope its helpful. I am unsure of this, but could it be interesting to look at how local vs. state government decisions influenced their paths? I learnt a lot from the blog post, and you have a great historical trace of the cities’ economic rises and falls. Can’t wait to read the full paper!
Hey Marie! Thanks for taking the time to read my blogpost, I’m glad you learned something new from it. Thanks for pointing this out, I do try to pay more attention to the racial dimension of this problem in my paper. I think the racial dimension is also interesting, in that more heterogeneous societies tend to experience a greater underprovision of public goods! The most important policy difference in my opinion, was the fact that Pittsburgh was able to invest in human capital, specifically educational institutions, whereas Detroit, due to a declining tax base, and therefore a constrained government budget was not. Hence, governance is at play here, as you rightly suggest. With regards to local vs. state policy, I would have to do more research, but what is definitely interesting is the relationship that the cities had with their rural areas. In Pittsburgh rural areas underpinned the city’s growth and diversification, whereas in Detroit, the rural areas were subtracting from this, by for example, attracting labourers and what was left of auto. Thank you for the podcast recommendation, I will have a listen:)