I often see texts that state something along the lines of: the north was rapidly industrializing and was therefore a wage based economy.
Why didn't the North use slaves in factories? What are the disadvantages of having slaves work in factories? Why use wage labor at all if you could use slaves instead?
Because slavery was illegal in the north.
I think you're getting the issue backwards. The better question is "why didn't the south industrialize as well" and I think "slavery" is a big part of the answer there. When you have a vast pool of free labor, why bother with expensive industrial machinery?