It was at one time the state's second most important industrial center, trailing only Mobile. The two cities were important shipping centers: Gadsden for riverboats and Mobile for international trade. Up until the 1980s, Gadsden was almost totally dependent on heavy industry, including Goodyear Tire, and Republic Steel. After virtually crumbling in the 1970s and 1980s, Gadsden decided its best course of action was to stop being dependent on industry, and shedding its "company town" image. In 1991, Gadsden was awarded the honor of "All-America City" by the National Civic League, an award that honored the way Gadsden's citizens, government, businesses, and voluntary organizations work together to address critical local issues.
As of the census of 2000, there were 38,978 people, 16,456 households, and 10,252 families residing in the city. The population density was 1,083.6 people per square mile (418.4/km²). There were 18,797 housing units at an average density of 522.6/sq mi (201.8/km²). The racial makeup of the city was 62.69% White, 34.00% Black or African American, 0.30% Native American, 0.53% Asian, 0.08% Pacific Islander, 1.22% from other races, and 1.17% from two or more races. 2.67% of the population were Hispanic or Latino of any race.
There were 16,456 households out of which 24.9% had children under the age of 18 living with them, 40.5% were married couples living together, 18.1% had a female householder with no husband present, and 37.7% were non-families. 33.9% of all households were made up of individuals and 16.9% had someone living alone who was 65 years of age or older. The average household size was 2.28 and the average family size was 2.91.
In the city the population was spread out with 23.0% under the age of 18, 9.5% from 18 to 24, 25.3% from 25 to 44, 22.0% from 45 to 64, and 20.1% who were 65 years of age or older. The median age was 39 years. For every 100 females there were 85.2 males. For every 100 females age 18 and over, there were 80.1 males.
The median income for a household in the city was $24,823, and the median income for a family was $31,740. Males had a median income of $29,400 versus $19,840 for females. The per capita income for the city was $15,610. About 18.1% of families and 22.9% of the population were below the poverty line, including 33.9% of those under age 18 and 14.6% of those age 65 or over.