Newark May Show the Way in a Post Industrial Future

Perhaps the most pressing issue for Newark, the “Brick City,” is how to leverage the enormous airport and seaport that are partly within its borders for stable economic growth and jobs. In its challenges, the old manufacturing city mirrors that of many cities around the country who are working to find a coherent economic base in an era when jobs that are about making things are difficult to keep or to grow in sufficient number. The Newark strategy of leveraging its logistics assets represents one way forward.

Recently on this subject, the administration of Newark Mayor Cory Booker adopted last year its Master Plan Re-examination report, which makes development around these logistics facilities’ industrial areas an important priority. The report’s focus on keeping some of the industrial area “industrial” may be an example of how to move towards a post-industrial economy without sacrificing the industry.

The 2009 report includes as a target increasing the percentage of port and port-related jobs going to Newark residents from 22% to 33% in the year 2025 - an increase of 12,000 jobs. These jobs amount to about half of the total jobs targeted for the municipality by 2025. Expected businesses include airport-related development (hotels, retail, office, entertainment) and activities such as wholesalers, passenger transportation, or warehouse and distribution.

A recent report by RPA for the National Association of Industrial and Office Properties confirms this vision of jobs based on a mix of industry and related services. The RPA report looks at the national trends that will drive warehouse and distribution space over the next decade and shows that the United States can expect around 339,000 new employees focused on supply and distribution chains.

Can the promise of 339,000 new logistics jobs offset the national economic trend towards fewer jobs in goods production? And could this be a solid source of jobs for traditional industrial states and localities and incentivized in plans like the upcoming Newark Master Plan?

As we answer that question, it must be considered that the national manufacturing employment decline is projected to continue in the next decade. According to the Bureau of Labor Statistics recently released employment projections for 2018 at the national level, manufacturing will be the biggest loser of jobs — about 1.2 million jobs between 2008 and 2018.

The continuous decline in manufacturing jobs has raised the profile of the goods distribution industry as a resource of well-paying industrial jobs that do not require postsecondary degrees. There are few other sectors that offer the potential for job growth for those who have traditionally been employed in manufacturing. Manual occupations such as trucking, dock work, and freight handling can often (but not always) pay relatively high wages and unionized benefits. White-collar occupations such as logistics and sales management and freight forwarding also offer career opportunities that do not usually require a four-year degree.

Logistics has been an important offset for declining manufacturing employment, but it will not replace it completely given the small gains in the first one and large losses in the second one. In this sense we are not post-industrial after all — or not yet completely. Manufacturing is still big business and a significant source of employment. As an example, at the middle of the last decade, manufacturing employment was about 10,000 employees and the fourth largest sector in Brick City (about 8% of the total).

Nationally, manufacturing also continues to be an important but diminishing source of employment. The sector will be the sixth largest sector in 2018 with about 12 million jobs out of 166 million (about 7% of total employment). In this context logistics should be included with other types of goods movement jobs and complementary businesses as the source of new service based related growth in former industrial areas.

As Newark embarks on a new Master Plan over the next year, its industrial past needs to be relied upon. The focus on transforming the area around the air- and sea- ports as a magnet for manufacturing, logistics, transportation, light industries, hotels, offices, and retail suggests a mixed industrial and services future for this place. Over the long term we need to be able to accommodate this mixed industrial landscape and provide flexibility for continued growth of a diverse set of economic activities.