“The Rust Belt is the north of England on a continental scale”: on industrial decline & left behind places

Ohio loves Trump. Image: Getty.

It took an hour to find somewhere to eat in Youngstown. It was a week before election day in the United States and there had been no breakfast on offer at the motel I’d stayed at the previous night in Pennsylvania. I was due in Cleveland by lunchtime, so crossed the border into Ohio before stopping. Youngstown, the first place you reach heading west on Interstate 80, is the heart of a conurbation of nearly half a million people: it seemed as likely a spot as any for a meal.

When I arrived in downtown Youngstown, there was nothing there. Or rather: there was a state university, a few high-rise office blocks left over from the gilded age and a neat grid of huge and beautiful old houses of the sort James Thurber was writing stories about eighty years ago. But shops and restaurants and cafés, the sort of bustling street life that suggests a thriving community? Nothing. Some of these businesses had moved out to suburban strip malls. Others are just gone.

Youngstown is an extreme example of a phenomenon that can be seen all over the American Midwest. Over the past 80 years, the population of the city has fallen by two-thirds. In 2007, a CNN report ranked it as the poorest substantial city in the US. The Rust Belt is full of places like this: mining or manufacturing towns that were once industrial powerhouses but now feel too big and too grand for the shrunken populations that remain. The pictures of Detroit never show the glories of its half-empty central business district.

The Rust Belt is like the north of England on a continental scale. Its cities are Sheffield and Bradford, over and over again. When I visited, Ohio was about to commit what most metropolitan observers believed would be an act of enormous self-harm, just as much of the north had in June with the EU referendum.

As I finished my breakfast at an Italian café on the highway back to the interstate, a man at the next table waved me over. He had heard my accent, he said, and wanted to know about Brexit. It didn’t seem like a good sign that the UK’s political news had become a talking point in a place like Youngstown.

The man – who asked to be identified only as John – was an Italian-American and a lifelong Democrat, until now. He voted for Barack Obama in 2008, and he would have voted for Jim Webb, a Democratic Virginian senator who flirted with running for president in 2016, but dropped out before the primaries. John said he didn’t like the Clintons, even though he had voted for Bill twice. He wouldn’t be voting for Hillary: she was too establishment.

Donald Trump, though, John liked – the tycoon’s comments about changing the rules of trade in order to bring back American jobs resonated. And Trump’s comments about women? Well, Bill Clinton has his issues in that area, too, John said, and he was a great president. (The more we talked, it became clear that when John said he didn’t like the Clintons, he meant one Clinton in particular.)


I had heard similar comments about the relative merits of Hillary Clinton and Donald Trump in Pennsylvania the day before. In the former mining city of Scranton, a trucking magnate told me that he admired Trump’s stance on avoiding taxes, on the grounds that it was what any sensible businessman would do.

This kind of sentiment was usual among the Republicans I met. The difference with John was that he was a Democrat and a blue-collar non-graduate – the kind of unionised worker who has traditionally made up the Democratic Party’s base.

Although I didn’t know it then, it was voters such as John who would win the election for Trump. In 2008, Obama carried Mahoning, the county that contains Youngstown, by 63 per cent to 35. This November, Hillary Clinton scraped it by 50 to 47, and Trump won Ohio by more than 8 points.

Ohio has long been a bellwether state. This pattern was repeated across the Rust Belt, with states that had not voted for a Republican in a generation – Pennsylvania, Wisconsin, Michigan – narrowly opting for Trump. He didn’t win the popular vote, but thanks to the US electoral college system, he didn’t need to. If Hillary Clinton had won just over 100,000 more votes in those three states combined, she would be president-elect.

So why didn’t she win here? Part of the explanation can be found in the economic anxiety that has been described in any number of reports about Trump voters from cities such as Youngstown. (Oddly, there have been very few similar reports about why people voted for Clinton in places such as Detroit.) The Trump campaign’s shameless mobilisation of racial resentment had a lot to do with why she lost, too. However, these explanations are merely two sides of the same coin: out-and-out racism has always been a more successful electoral strategy when voters feel insecure about their place in the world.

There is something else at work here, too, and I wonder whether it is the same force that caused much of the north of England to vote for Brexit, and may yet propel Marine Le Pen to the French presidency. In the Republican primary, one of the biggest predictors of how likely someone was to vote Trump was not having a college degree. There are millions of those voters in Rust Belt towns like Youngstown, because there are so few graduate jobs to do there. If you have skills or ambitions, you will leave.

The result, in the US as in the UK, is a divide that is as much geographical as it is cultural. Some thriving cities are liberal and global; others are left wondering where it all went wrong. Those big rambling houses by Youngstown’s manicured park can be bought for as little as $70,000 – because why would someone who can afford more choose to live there?

When John asked me about Brexit, I thought he wanted to know how it had happened, and what it would mean for the UK. But the more I think about it, the more I suspect that what he was really asking was this: for once, can we actually win?

His candidate, Donald Trump, will now be president. Winning, though, may mean something else entirely. 

This article was previously published in our sister publication, the New Statesman.

 
 
 
 

The ATM is 50. Here’s how a hole in the wall changed the world

The olden days. Image Lloyds Banking Group Archives & Museum.

Next time you withdraw money from a hole in the wall, consider singing a rendition of happy birthday. For today, the Automated Teller Machine (or ATM) celebrates its half century.

Fifty years ago, the first cash machine was put to work at the Enfield branch of Barclays Bank in London. Two days later, a Swedish device known as the Bankomat was in operation in Uppsala. And a couple of weeks after that, another one built by Chubb and Smith Industries was inaugurated in London by Westminster Bank (today part of RBS Group).

These events fired the starting gun for today’s self-service banking culture – long before the widespread acceptance of debit and credit cards. The success of the cash machine enabled people to make impromptu purchases, spend more money on weekend and evening leisure, and demand banking services when and where they wanted them. The infrastructure, systems and knowledge they spawned also enabled bankers to offer their customers point of sale terminals, and telephone and internet banking.

There was substantial media attention when these “robot cashiers” were launched. Banks promised their customers that the cash machine would liberate them from the shackles of business hours and banking at a single branch. But customers had to learn how to use – and remember – a PIN, perform a self-service transaction and trust a machine with their money.

People take these things for granted today, but when cash machines first appeared many had never before been in contact with advanced electronics.

And the system was far from perfect. Despite widespread demand, only bank customers considered to have “better credit” were offered the service. The early machines were also clunky, heavy (and dangerous) to move, insecure, unreliable, and seldom conveniently located.

Indeed, unlike today’s machines, the first ATMs could do only one thing: dispense a fixed amount of cash when activated by a paper token or bespoke plastic card issued to customers at retail branches during business hours. Once used, tokens would be stored by the machine so that branch staff could retrieve them and debit the appropriate accounts. The plastic cards, meanwhile, would have to be sent back to the customer by post. Needless to say, it took banks and technology companies years to agree common standards and finally deliver on their promise of 24/7 access to cash.

The globalisation effect

Estimates by RBR London concur with my research, suggesting that by 1970, there were still fewer than 1,500 of the machines around the world, concentrated in Europe, North America and Japan. But there were 40,000 by 1980 and a million by 2000.

A number of factors made this ATM explosion possible. First, sharing locations created more transaction volume at individual ATMs. This gave incentives for small and medium-sized financial institutions to invest in this technology. At one point, for instance, there were some 200 shared ATM networks in the US and 80 shared networks in Japan.

They also became more popular once banks digitised their records, allowing the machines to perform a host of other tasks, such as bank transfers, balance requests and bill payments. Over the last five decades, a huge number of people have made the shift away from the cash economy and into the banking system. Consequently, ATMs became a key way of avoiding congestion at branches.

ATM design began to accommodate people with visual and mobility disabilities, too. And in recent decades, many countries have allowed non-bank companies, known as Independent ATM Deployers (IAD) to operate machines. The IAD were key to populating non-bank locations such as corner shops, petrol stations and casinos.

Indeed, while a large bank in the UK might own 4,000 devices and one in the US as many as 12,000, Cardtronics, the largest IAD, manages a fleet of 230,000 ATMs in 11 countries.


Bank to the future

The ATM has remained a relevant and convenient self-service channel for the last half century – and its history is one of invention and re-invention, evolution rather than revolution.

Self-service banking and ATMs continue to evolve. Instead of PIN authentication, some ATMS now use “tap and go” contactless payment technology using bank cards and mobile phones. Meanwhile, ATMs in Poland and Japan have used biometric recognition, which can identify a customer’s iris, fingerprint or voice, for some time, while banks in other countries are considering them.

So it’s a good time to consider what the history of cash dispensers can teach us. The ATM was not the result of a eureka moment of a single middle-aged man in a bath or garage, but from active collaboration between various groups of bankers and engineers to solve the significant challenges of a changing world. It took two decades for the ATM to mature and gain widespread, worldwide acceptance, but today there are 3.5m ATMs with another 500,000 expected by 2020.

Research I am currently undertaking suggests that ATMs may have reached saturation point in some Western countries. However, research by the ATM Industry Association suggests there is strong demand for them in China, India and the Middle East. In fact, while in the West people tend to use them for three self-service functions (cash withdrawal, balance enquiries, and purchasing mobile phone airtime), Chinese customers consumers regularly use them for as many as 100 different tasks.

Taken for granted?

Interestingly, people in most urban areas around the world tend to interact with the same five ATMs. But they shouldn’t be taken for granted. In many countries in Africa, Asia and South America, they offer services to millions of people otherwise excluded from the banking sector.

In most developed counties, meanwhile, the retail branch and the ATM are the only two channels over which financial institutions have 100 per cent control. This is important when you need to verify the authenticity of your customer. Banks do not control the make and model of their customers’ smart phones, tablets or personal computers, which are vulnerable to hacking and fraud. While ATMs are targeted by thieves, mass cybernetic attacks on them have yet to materialise.

The ConversationI am often asked whether the advent of a cashless, digital economy heralds the end of the ATM. My response is that while the world might do away with cash and call ATMs something else, the revolution of automated self-service banking that began 50 years ago is here to stay.

Bernardo Batiz-Lazo is professor of business history and bank management at Bangor University.

This article was originally published on The Conversation. Read the original article.