Winston-Salem suffers disproportionately with a blight of poverty and inequality, but it was not always this way. The 1913 combining of two industrious towns, Winston and Salem, led to a national powerhouse of manufacturing and business.1 By the mid 1920’s, Winston-Salem led the nation in the production of several every-day items, and held the title of North Carolina’s largest and most prosperous city. Due to the massive amounts of raw materials needed to fuel its growing industry, Winston-Salem became the 7th largest port of entry in the United States.2 Times were good in the Twin City, and there was no entity more to thank than R.J. Reynolds Tobacco Company. In the early 20th century, Reynolds introduced the Camel cigarette, which became an instant national sensation. In the year 1921, Camels accounted for half of all cigarette sales within the United States, and by 1924 RJR Tobacco was making $23.8 million in annual profits.3 This is the equivalent of $340 million in constant 2017 dollars, and RJR’s new wealth further fueled Winston-Salem’s already robust economy.4
Funds from RJR greatly enriched the rising Wachovia Bank and Trust, and helped begin local companies such as Hanes Knitting and Piedmont Airlines (which soon became one of the largest carriers in the United States).5 World War II and its subsequent economic boom further enriched Winston-Salem, attracting big business and wealthy entrepreneurs to a city that had received a financial windfall from wartime production. Reynolds became the largest tobacco company on earth in 1958, adding an exclamation mark to decades of prosperity for the city. There was, however, turmoil lurking just over the seemingly hope-filled horizon. Unbeknownst to most of those celebrating Reynolds’ new status, nearly a half century of economic bleeding had already begun.6
RJ Reynolds became king of tobacco in 1958; the same decade that it became clear smoking causes lung cancer. If the adage “uneasy lies the head that wears the crown” could ever be applied, it rang true for tobacco’s new industry leader. Starting in the 1950’s, Reynolds found itself inundated with wrongful death lawsuits which continued for decades. This legal trouble, combined with new market pressure from Philip Morris and the Marlboro brand, began years of decline for Reynolds. In an effort to raise profit margins with more efficient production, Reynolds planned to open a series of massive, modern factories in and around Winston-Salem. When the first of these factories was complete in 1986, plans for all of the other factories had to be placed on hold due to Reynolds continued financial decline. With the opening of the new plant, Reynolds’ remaining employees faced yet another hurdle; working with technology. Reynolds had to pay many of its employees to go to Forsyth Tech so that they could learn how to do their jobs alongside computers. As the push toward modern production continued, the leadership of Reynolds realized that many of its long-time employees did not even know how to read and write.7 Times were changing, and Winston-Salem was struggling to keep up.
These changes coincided with the bankruptcy of Mclean Trucking. When McLean declared bankruptcy, it was the 5th largest trucking company in the country, and boasted 10,000 employees, 1000 of whom worked at its headquarters on Waughtown Street in Winston-Salem. The next year, the leadership of RJ Reynolds Tobacco Company, now “RJR Nabisco,” was ceded to an outsider in the largest corporate takeover in American History. The new boss, F. Ross Johnson, moved Reynolds’ headquarters from Winston-Salem to Atlanta. In 1987, RJR Nabisco lost 2000 more jobs as a part of a leveraged buyout, and would go on to shed another 5000 jobs over the next 3 years.8 This constituted a tremendous moral blow to Winston-Salem, a city now facing both economic and identity crises.
This misfortune was followed by the buyout of Piedmont Airlines, resulting in the loss of 5000 jobs, the closure of North Carolina Works, a company which once employed 13,000 in Winston-Salem, and the failure of Pilot Freight Carriers, a local company that laid off 2,600 employees.9 Within a few short years, Winston-Salem’s business empire had collapsed. Many of the city’s residents now found themselves abruptly unemployed, stifling the local economy. Much of Winston-Salem’s less educated workforce now found it increasingly difficult to find quality work. Computers and automated production were here to stay, and the low skill labor market was shrinking. Severance packages were exhausted, and families began to fall out of the middle class. For the first time in the 20th century, Winston-Salem was not a city of prosperity for all. This had been a town in which those with little or no education could maintain a respectable standard of living; stories were told of an executive vice president at Reynolds who had started at the company as a janitor out of high school.10 These days were passed, and the stage was now set for Winston-Salem to become the worst urban area in which to be born into poverty in the United States.
1Langdon E. Oppermann, “Winston-Salem’s African American Neighborhoods: 1870-1950,” (Winston-Salem: Forsyth County Joint Historic Properties Commission, 1994) 9.
2 Frank Elliott, From Tobacco to Technology: Reshaping Winston-Salem for the 21st Century, Winston-Salem: Winston-Salem Chamber of Commerce, 2016) 3.
3 Ibid, 2.
4 “CPI Inflation Calculator,” Bureau of Labor and Statistics, accessed November 5th, 2017, https://www.bls.gov/data/inflation_calculator.htm.
5 Elliot, 2.
6 Ibid, 3-4.
7 Ibid, 4-5.
8 Ibid, 6-7.
9 Ibid, 8.
10 Ibid, 5.