Closing up bars and closing up shop on Monongahela.

• Author: Ignatius, David
• Position: Steel industry - Making America Work

David Ignatius, who wrote a pioneering article in the Monthly on the fall of the steel industry in 1979, wrote this summary of his findings in 1988

Steel in the old days wasn't simply an industry, It was an entire culture, an all-American social system that produced an utterly disastrous outcome in which workers didn't work, managers didn't manage, and an entire industry slid year by year toward disaster.

On the union side the tragedy began with the United Steelworkers's first president, Philip Murray, whose views were conditioned by the bitter struggle to organize low-paid steelworkers in the 1930s. Though he was initially interested in labormanagement cooperation schemes, Murray decided that the union's job was to raise wages and fringe benefits, rather than to participate in the larger task of running the enterprise for the good of all.

The union succeeded beyond Murray's wildest dreams. By the early 1980s, American steel workers were the best-paid industrial workers in the world. From 1967 to 1979, total hourly employment costs in the industry rose at an annual rate of 12.1 percent-while the industry's production grew barely 2 percent a year. When this cozy, anticompetitive world was punctured by lower-cost foreign steel, the union had only one answer: import barriers.

Managers made a series of foolish strategic decisions: they continued to build huge open-hearth furnaces in the late 1950s, after other countries began to adopt the more modern oxygen-furnace technology; they spent vast sums to produce "pelletized" iron ore from their North American mines (which were no longer producing high-grade ore), rather than...