Economic Transition in the City of Paterson, New Jersey (America’s First Planned Industrial City): Causes, Impacts, and Urban Policy Implications

Abstract

This paper examines the dynamics of economic change in the City of Paterson, New Jersey, from the time of its founding in the late eighteenth century to 1990, with emphasis on the post-1945 era. Analysis shows that from the time of its founding to the first half of the twentieth century, Paterson experienced a period of economic growth followed by economic decline in the 1960s, characterized by major changes in its principal industries of cotton, locomotives, and silk. Economic growth in Paterson up to the early part of the twentieth century is attributable to several locational factors, including the availability of water resources, transportation, labor supply, and markets. Its decline in the post-1945 era is attributable to a combination of local, national, and global economic factors including periods of depression, labor discord, product substitution, decentralization of economic activities, and deindustrialization. Economic decline resulted in a high rate of unemployment, poverty, and urban decay. The most significant effort to reverse urban decline in the city is the urban enterprise zone (UEZ) program. The impacts of this program on economic growth in the city, however, remain inconclusive.