The New Game:

The Postindustrial Economy and The Wire

Russell, Ernest Roberts. Duffy, Eamon Yeats. Leonard, Matthew. Gutierrez, Jason Charles.

Season two of The Wire completely breaks free of its characterization as a police procedural and enters the realm of anthropological text. In season two, Simon and Burns examine the ramifications of the postindustrial economy on the socioeconomic conditions of the contemporary American metropolis. Its portrayal of a struggling Stevedores Union provides a perfect example of this structural shift on the Baltimore’s blue-collar population. Ziggy and Nico’s entrance into the illegal drug market illustrates the growing primacy of underground economies in America’s cities as a function of industrial decline. While this example is (arguably) conspicuous, The Wire‘s critique of the postindustrial economic paradigm is not always so obvious. This context is intended to provide a critical context for viewers of The Wire‘s second season by examining the effects of America’s postindustrial economy both as those effects are framed within the show as well as from a broader sociological perspective. Section one offers a brief explanation of the postindustrial economy and then relates that description to the second season’s plot. Section two details Baltimore’s thriving industrial past before describing its decline and the subsequent rise of the city’s service economy. Section three broadens this survey by examining the detrimental effects of the transformation of the American working landscape on the living conditions of this nation’s inner-cities.

Section One

What is Postindustrial?

The new postindustrial paradigm of American Capitalism witnessed a dramatic decline in the need for unskilled, unionized labor. The postindustrial economy is a generalization referring to a shift from a manufacturing to service-based economy. The defining features of the service sector are “face to face” interactions between employee and client, markedly lower wages then previously paid to unskilled laborers and a decrease in job security. In the span of twenty-four years, these factors have led to a 27% drop in the average real wage for workers with less then a high-school degree–from $11.21 and hour in 1973 to $8.22 an hour in 1997 [1]. While this shift drastically lowered wages, this is only half of the story. The difficulty of organizing unions around typical service sector jobs, provided by firms such as McDonalds and Wal-Mart, has had a terrible effect on the working conditions of the typical unskilled laborer. These firms, unhindered by union muscle, are able to demand the most of their replaceable, or “worth less,” workforce by imposing part-time, temporary work arrangements on more and more workers. Part-time or temporary work, translates into fewer benefits, lower wages and less job security then full time employment. According to Collins and Yeskel, a staggering 30% of America’s increasingly disposable workforce are part-timers [2]. In the typical American inner-city these factors have all congealed into, what Wacquant has dubbed, The New Urban Marginality[3]. Throughout its five seasonsThe Wire expertly depicts this phenomenon, illustrating both its cause and effects, with a vividness that could never be achieved through a more traditional scholarly medium.

The Wire

Season 2 of The Wire introduces us to an entirely new sector of the economy of Baltimore. While the show’s first season exposed the underground economy of crack-cocaine and heroin, the second season introduces the world of Baltimore’s shipping industry and its position as a port city on the American eastern seaboard. Despite being a relatively legitimate industry, the shipping docks of Baltimore have come under difficult economic times. It union’s have fallen victim to the decline of industrialized labor in the United States. Although the show does not directly address the intricacies of this decline and its place in post-industrial America, the results of the industry’s short-comings and the demising demand for labor play an important role in the progression of season two’s plot. In a manner further highlighting the ramifications of The New Urban Marginality, the Sobotka family acts just as the Barksdales did in season one. As such, they expose a variety of the issues that de-industrialization, brought about by America’s economic shift, has had on their lives as Longshoremen.
The pressure of a failing source of income forces many in the Sobotka family, Nick and Ziggy in particular, into a life of crime that is not far removed from that of the Barksdales and other crime-syndicates. As Frank and Nick Sobotka, respectively, introduce the viewer to both the managerial and laborer perspectives of the docks, the sociological effects of this way of life, as well as the economic ones, are fully exposed.

Season 2 of The Wire is about more than just a sector of the Baltimore economy. This season reveals the consequences of our American capitalist system. It is a system in which all wealth is privately owned and in a constant state of competition. The winners and losers of this competition are determined by the invisible hand of the free market. Tell Frank Sobotka about the “invisible hand” and he’d punch you in the face. In a recent interview, The Wire co-creator David Simon explains how this system has enriched the lives of few and belittled the lives of far too many:

“Thematically, it’s about the very simple idea that, in this Postmodern world of ours, human beings—all of us—are worth less. We’re worth less every day, despite the fact that some of us are achieving more and more. It’s the triumph of capitalism. Whether you’re a corner boy in West Baltimore, or a cop who knows his beat, or an Eastern European brought here for sex, your life is worth less. It’s the triumph of capitalism over human value. This country has embraced the idea that this is a viable domestic policy. It is. It’s viable for the few. But I don’t live in Westwood, L.A., or on the Upper West Side of New York. I live in Baltimore.”[1]

This season depicts an economy in which you are either on the way up or on the way out. The harsh realities of the structural nadir that The Wire entangles its viewers in are described by David Simon as “Not timeless, but they are time-tested.”[2] In the episode “All Prologue”, Frank Sobotka’s calls for a fight for the grain pier to be fixed. At the time they shot season 2 the grain pier was sitting idle. By the time they started shooting season 3 it had been sold and now there are condos in its place. The bar that the stevedores regular is being remodeled into a “yuppie fern joint.”[3] The capitalist system has facilitated the end of a manufacturing age and the beginning of the post-industrial age. This season of The Wire makes us wonder where, if at all, the stevedores, the steel-workers, the working man, and the city of Baltimore fit into this ruthless economic transition.

Section Two

Baltimore

American cities have rapidly evolved throughout our country’s young history, and Baltimore is no exception. In order for there to be a post-industrial Baltimore there must have first been a pre-industrial and industrial Baltimore. One cannot understand the impact of the post-industrial paradigm shift without first understanding just how entrenched the city was in the industrial age. The evolution of Baltimore through the 20th century was geared to the tempo of the world’s economy.
Presently Baltimore might be seen as a working class city, struggling to find an identity in a post-industrial world where information services have come to define much of our economy. This, however, was not always the case. Baltimore was an economically thriving city throughout much of the 19th century due mostly to the large quantity of trade that flowed through the city’s port. Founded on a prosperous mercantile economy, Baltimore began to grow and by 1850 it was the second largest city in the country behind only New York City.[1] Two of the greatest philanthropists ever, George Peabody and Johns Hopkins, accrued great wealth in the finance and mercantile industries as they funded the expansion of Baltimore and the nation as a whole. While, the fire of 1904 brought the destruction of most of downtown Baltimore, the industrial infrastructure that was rebuilt in place of what was lost became the backbone of a growing urban economy. Thousands of small warehouses were constructed and made home to family-owned business. The true wealth of the city lay with the small business owners who were called upon to distribute to a growing Baltimore as well as many other emerging cities throughout the Mid-Atlantic and South.

As the United States began its ascent to global hegemony at the turn of the 20th century, Baltimore’s economy evolved to meet the needs of a nation that was rapidly increasing in size and global relevance. Heavy industry replaced mercantilism as the driving force behind the city’s economy and Baltimore entered the industrial age as a serious contributor to our nation’s foreign and domestic efforts. With the construction of Sparrow Point, the Pennsylvania Steel Company was the first to bring steel to the city of Baltimore. Pennsylvania Steel Company was then purchased by industry behemoth Bethlehem Steel in 1916 and Baltimore’s Sparrow Point became both the center of Baltimore’s emerging industrial economy and the flourishing American steel-making effort.
To see the rising and falling trajectory of Baltimore’s (post-) industrial economy we must look no further than Sparrow Point. It was more than just a steel mill. It put Baltimore on the nation’s economic map. It was the catalyst that turned Baltimore from just another Mid-Atlantic port into a bustling industrial engine comparable to the likes of Detroit, Chicago, and Cleveland. Sparrow Point grew throughout the mid 20th century and at its peak it covered over 300 acres and produced 672,000 tons of steel a year, making it the largest steelmaking complex in the world. In the 1950’s, the furnaces, ovens and mills of Sparrow Point consumed 1/500th of the nation’s total output of electricity and poured an average of 15 tons of hot metal every minute.[2] It made the steel for the Golden Gate Bridge, the George Washington Bridge, and the planes, guns, and ships that helped the United States dominate in two world wars.

Most importantly to both Baltimore and most relevant to The Wire, Sparrow Point employed a lot of people. In 1941, the 15,714 employees of Bethlehem Steel at Sparrow Point won union representation and the steelworkers enjoyed health benefits, vacation and sick leave. World War II increased the supply needs for steel and the industry underwent a production boom. Sparrow Point, which built mainly cargo and transport ships at the time, expanded quickly to reach its peak employment of 35,000 workers by 1959.[3] The unwavering demand for steel and other industrial goods that Baltimore produced in the mid-20th century makes the empty docks and work less weeks that we see in The Wire a previously unimaginable tragedy.

But the end did come and the bigger they are the harder they fall. In 2001, one year before The Wire aired on HBO, Bethlehem Steel filed for bankruptcy,and as of 2001 there was only 4,000 people working at Sparrow Point.[4] The 1970s brought considerable layoffs among American producers as steel consumers began to rely more heavily on foreign, cheaper suppliers.[5] The diminishing demand for American made steel products meant a decline in demand for both steel and port workers in Baltimore. As numbers began to dwindle so too did union strength.

The Fall of Unions

With the changing demands and conditions of industries across the nation, union labor saw a considerable decrease between 1979 and 2000. Although nearly one-third of employed Americans belonged to unions at the end of the Second World War, membership fell to 13.9 percent nationwide by 1998. This trend is not slowing down either. Between 2005 and 2006 alone membership fell by 326,000 members, to 12 percent nationwide, down from 12.5 percent the previous year.[1] This sharp decline over the past few decades can be attributed to a variety of factors both economic and sociological. In addition to dues increases, political pressure and foreign labor, Union members have seen a dramatic rise in employer resistance. Employers succumbed to union demands for wages and benefits less often in the 1980’s, resulting in less support for the unions from their own members. President Reagan himself cracked down on unionized labor by firing FAA employees for illegally striking.

Despite all of this, the numbers and effectiveness of unionized labor has been on the decline since the end of the war. Economists and sociologists attribute the decline union membership to a variety of factors. For example, the bad press of the big Teamsters Union certainly hurt public opinion of the labor movement. The same young workers who inspired the rise of high-technology computer based firms also shied away from these organizations which had the reputation of hindering independence. As Frank Sobotka emphatically states in the episode “All Prologue”, the union workers survived the past administrations of Reagan and “Slick Dick”. However as Lester and the detectives discover, the union’s decline has indeed effected them, forcing illegal measures to insure continued political influence. Although fictional, this situation remains consistent with the actual decline of organized labor across the country. The problems of Baltimore’s longshoremen are unfortunately based in the real world. Despite seeing 2,500 ships in Baltimore’s ports each year, the number of ships has been declining, losing a total of 29 steamship lines in just 5 years to competing ports.[2] With this in mind, Frank Sobotka’s conversation with Nick about why ships travel further to be received at their port is a legitimate one. If their port is not the fastest and most efficient then they will continue to lose business.

More recently, economists have begun to argue that another cause of the decline in union recruitment was the growing strength of the economy between 1980 and 2000. As the unemployment rate fell to 4.1 percent, the appeal of unions and what they stood for declined as well [3]. Only in the last few months has the Baltimore shipping industry seen signs of life. A new structuring of loans and increase in shipping prices has allowed the shipping markets to see much needed financial success. Despite being an industry deep in debt, an increasing global demand from foreign markets as well as the increasing shipping rates have led to a rise in industry stock through the month of February, 2009.

However, perhaps the most notable reason for Union decline is automation and technological development. Many of the tasks of industrial labor have been outdated by the introduction of labor-saving, automated machinery. This has put a strain on the available work to unionized employees, often resulting in shift-sharing and shorter workweeks. As we see in The Wire, the unionized workers struggle to make ends meet and battle for work hours.

The series shows how this financial pressure forces many to seek alternate means of income, often illegal ones, in order to survive. Those who do not choose to break the law are forced out of unionized, industrial labor and into the growing service sector of jobs.

The Rise of the Service Economy in Baltimore

Between 1950 and 1995, the city lost 75% of its industrial employment – over 100,000 workers.[1] With the decline of the manufacturing industry came the rise of the service industry as the main source of employment for the people of Baltimore. Unlike the industrial sector (manufacturing or construction), which transforms materials to create a finished product, the service sector (retail, government, finance) is defined by service of the customer. By 1990 the service industry accounted for over 90% of all jobs in the city. One aspect of the manufacturing industry that The Wire so accurately captures is the multitude of races and elasticities that filled the factories and mills of Baltimore. With the transition to service industries came a racial segmentation of the labor market. The following data from a 1990 survey of low wage service workers in Baltimore demonstrates this segmentation:

Chart 1: Low-wage service workers by occupation and race, 1990[2]

The racial breakdown that this survey reveals is surprising considering African Americans made up only 59% of the city’s population in 1990.[3] Couple the disproportionate employment of African Americans with the lack of job security, low salaries and low benefits that characterize the service industry and The Wire‘s depiction of the postindustrial inner city and waterfront becomes very possible. The following data from 2008 shows the past year’s percentage change in employment by selected industry for the United States and Baltimore. Clearly the city continues to rely on the services industry for new employment, mainly in the information and professional and business services, to a greater extent than the rest of the United States.

Chart 2: Over-the year percentage change in employment by selected industry supersector, March 2008[4]

In a recent interview, The Wire co-creator Ed Burns discussed the rising crime rates in Baltimore when crime rates in larger cities like New York and Los Angeles have diminished in recent years:

“Baltimore’s murder rate was somewhere around 282 for a population of around 600,000 people. So we’re very close to New York just in raw numbers. The reason is that New York has an economy. There’s a vitality there. There are things happening. People have jobs. In places like Baltimore, Detroit, and Cincinnati, the jobs that were there are gone. The manufacturing-based jobs are gone, and without that kind of job, it’s very, very difficult to jump-start the economy. There’s no prospect for Baltimore having jobs in the near future. If you look at Baltimore now, what you’re seeing is a very decayed inner core. The east side of the city is being bought up by Johns Hopkins [the university and hospital]. They’re building a biotech park which is going to employ 6,000 people, but of those 6,000 people, you’ll be lucky to get three people who were originally from those neighborhoods. They just aren’t qualified.”[5]

Section Three

The Transformation of the American Working Landscape

To say that the American economy has moved completely away from manufacturing is somewhat misleading. Although it would be fair to say that those economic sectors are losing jobs (manufacturing jobs accounted for 27% of the American workforce in 1948, whereas by 2000 that number had dropped to 14%), the output of these sectors did account for $1.567 trillion in 2000, a 167% increase in productivity since 1980, where the manufacturing sector produced $587 billion.[1]

To account for this one must look to the constantly evolving technologies which allow businesses to increase productivity while keeping labor costs low. In the agricultural sector, which has seen job losses comparable to those seen in manufacturing, technologies like crop management and yield information systems have allowed agro-business to cut jobs whilst still maintaining a high level of productivity. As a result of the increased reliance on new technologies demand has risen for highly skilled workers, while low skill workers are forced to go to continuing education and training in order to remain competitive in a world that places a premium on the ability to interact with these new technologies.[2]

Problems further arise when one takes into consideration that low skilled workers are no longer competing with only American workers for jobs. Technology has made it not only possible, but profitable to outsource low-skill jobs overseas, where they can get the same product for a lower cost. Although, it should be noted that this risk rests not only with the blue collar workforce, American companies are also outsourcing white collar jobs as well.

Ten years after the end of World War II the United States saw the manufacturing sector’s highest contribution to the United States national income since 1929, where it accounted for 32.6% of the GDP of the United States. By 2000, this percentage had dropped to 14%. In contrast, the service industry made up 9.2% of the American GDP in 1955, and this number has climbed to 22.2% of the national GDP as of 2002.[3]

An example that is particularly germane to the second season of The Wire is the metal industry. As mentioned in several episodes (see Season 2 Episode 1 and Season 2 Episode 6), Baltimore once had a thriving steel industry. However the Baltimore steel industry, like the national metal industry, saw its strength decline within the past 25 to 30 years. In 1957 the metal industry held a GDP-share of 4.80%, by 1985 this number had been cut in half (and then some) to 2.18%, and by the turn of the century the metal industry’s GDP-share had dropped by nearly 2/3 to 1.65%. Similarly, the metal industry’s labor-share declined from a high of 4.03% in 1957 to 1.65% in 2000. Given the industry’s decline it seems fairly obvious that the metal industry has “grown at a slower pace” than the rest of the American economy.[4]

As one might expect, as the service industry grows there is job creation in these areas. Therefore, despite the contraction of blue collar jobs, the national unemployment has remained relatively stable, fluctuating between approximately 7 and 4% as more workers become employed by the service industry.[5] Even as it is touted as progressive by American politicians, this statistic does not say anything about the diminished quality of the living conditions of the Americans now employed by the service sector. Individuals once employed in the manufacturing sector, their job security and wages protected by labor unions, have been forced into the service industry and consequently earn lower wages. One reason that the service sector now provides far more employment then the manufacturing sector ever did is that wages in the service sector for a full time employee are often below what is considered “a living wage.” For instance, more then 13 million full time jobs in 1989 paid wages considered to be “sub-poverty”–less then necessary to allow a family of three to rise out of poverty [6]. These wages force many to hold multiple jobs just to get by. According to a report by Sklar, nearly half of America’s working poor work an average of 40 hours or more [7]. How has the postindustrial labor market effected American laborers?

They now work more for less.

Conclusion

Viewers are often often disappointed with season 2 of The Wire. They miss the intrigue of the drug-game that makes season 1 so engulfing. They miss the Pit and Orlando’s. They miss watching a world that in most cases is so far from their own. Yet, through accurately portraying the effects of our capitalist system, season 2 hits much closer to home for many Americans trying to adjust to a changing economy. The last fifty years in American history are often defined by the leaps and bounds our economy and our society have made. Most of America has come so far. season 2 reveals a part of America that will do just about anything not to be left behind…The New Marginality

Sources

Introduction
[1] Sassen, Saskia. 2000. Cities in the World Economy. Thousand Oaks, CA: Pine Forge Press, 2000, Page 130.
[2] Collins, Chuck. Yeskel, Felice. Economic Apartheid in America. New York: The New Press. 2000Page 23.
[3] Waquant, Loic. Urban Marginality in the Coming Millennium.
Urban Studies, Vol. 36, No. 10, Pages 1639-1647, 1999.

The Wire
[1] http://www.slate.com/id/2154694/pagenum/all/
[2] http://www.slate.com/id/2154694/pagenum/all/
[3] http://www.slate.com/id/2154694/pagenum/all/

Baltimore
[1] http://www.census.gov/population/www/documentation/twps0027/tab08.txt
[2] http://www.makingsteel.com/Sun-lostempire.html
[3] http://www.nathanielturner.com/robertmooreand1199union3.htm
[4] http://www.makingsteel.com/Sun-lostempire.html
[5] http://www.nathanielturner.com/robertmooreand1199union3.htm

The Unions
[1] http://www.nytimes.com/2007/01/26/us/26labor.html?_r=1
[2] http://query.nytimes.com/gst/fullpage.html?res=9C0CE0DB133CF932A15752C0A966958260
[3] http://economics.about.com/od/laborinamerica/a/union_decline.htm

The Rise of the Service Sector
[1]http://www.nathanielturner.com/robertmooreand1199union3.htm
[2] http://epi.3cdn.net/63b7cb4cbcf2f33b2d_w9m6bnks7.pdf
[3] http://epi.3cdn.net/63b7cb4cbcf2f33b2d_w9m6bnks7.pdf p.6.
[4] http://www.bls.gov/ro3/cesqbalt.htm
[5] http://www.reason.com/news/show/126026.html

Transforming the American Working Landscape
[1] Kozmetsky, George. Economic transformation of the United States, 1950-2000 focusing on the technological revolution, the service sector expansion, and the cultural, ideological, and demographic changes. West Lafayette, Ind: Purdue UP, 2005.
[2] Ibid.
[3] U.S. Bureau of the Census, Statistical Abstract of the United States, 2006 (Washington, D.C.: Government Printing Office, 2006)
[4] Kozmetsky, George. Economic transformation of the United States, 1950-2000 focusing on the technological revolution, the service sector expansion, and the cultural, ideological, and demographic changes. West Lafayette, Ind: Purdue UP, 2005.
[5] Ibid.
[6] Law, Robin. Wolch, Jennifer. Social Reproduction in the City: restructuring Time and Space. Englewood Cliffs NJ: Prentice Hall. 1993 Page 182.
[7] Sklar, Holly. Mothers in the Hood Z Magazine, March 1993, Pages 28-29.