As economic divide widens, Trumpland will fare worst
These days almost everyone has the ( justified) sense that America is coming apart at the seams. But this isn’t a new story, or just about politics. Things have been falling apart on multiple fronts since the 1970s: Political polarization has marched side by side with economic polarization, as income inequality has soared.
And both political and economic polarization have a strong geographic dimension. On the economic side, some parts of America, mainly big coastal cities, have been getting much richer, but other parts have been left behind. On the political side, the thriving regions by and large voted for Hillary Clinton, while the lagging regions voted for Donald Trump.
Regional economic divergence is real and correlates closely with political divergence.
Regional disparities aren’t a new phenomenon in America. Indeed, before World War II the world’s richest, most productive nation was also a nation with millions of dirt-poor farmers, many of whom didn’t even have electricity or indoor plumbing. But until the 1970s those disparities were rapidly narrowing.
Take, for example, the case of Mississippi, America’s poorest state. In the 1930s, per-capita income in Mississippi was only 30 percent as high as per-capita income in Massachusetts. By the late 1970s, however, that figure was almost 70 percent.
But the process went into reverse: These days, Mississippi is back down to only about 55 percent of Massachusetts income.
As a new paper by Austin, Glaeser and Summers documents, regional convergence in per-capita incomes has stopped dead. And the economic decline of lagging regions has been accompanied by growing social problems: a rising share of prime-aged men not working, rising mortality, high levels of opioid consumption.
For the most part I’m in agreement with Berkeley’s Enrico Moretti, whose 2012 book, “The New Geography of Jobs,” is must reading for anyone trying to understand the state of America. Moretti argues that structural changes in the economy have favored industries that employ highly educated workers — and that these industries do best in locations where there are already a lot of these workers. As a result, these regions are experiencing a virtuous circle of growth: Their knowledge-intensive industries prosper, drawing in even more educated workers, which reinforces their advantage.
And at the same time, regions that started with a poorly educated workforce are in a downward spiral, both because they’re stuck with the wrong industries and because they’re experiencing what amounts to a brain drain.
While these structural factors are surely the main story, I think we have to acknowledge the role of self-destructive politics.
And when it comes to national politics, let’s face it: Trumpland is in effect voting for its own impoverishment. New Deal programs and public investment played a significant role in the great postwar convergence: conservative efforts to downsize government will hurt people all across America, but it will disproportionately hurt the very regions that put the GOP in power.
The truth is that doing something about America’s growing regional divide would be hard even with smart policies. The divide will only get worse under the policies we’re actually likely to get.