2016: A Year Defined by Americas Diverging Economies
2016: A Year Defined by America’s Diverging Economies
The Atlantic
The recovery has been characterized by yawning gaps between the rich, the middle, and the poor. But, as Trump’s election made clear, it has also been characterized by yawning gaps between cities, the suburbs, and rural parts of the country. “Once you go beneath those big, national, largely encouraging statistics, you see a lot of variation,” said Mark Muro, a senior fellow at the Brookings Institution. “This is about big-county, cosmopolitan metropolitan areas pitted against small-population rural counties and some small metros. It is absolutely clear that the economic story has been much more difficult in that second group of non-big-metro counties.”
Indeed, the employment rate in rural areas was actually 2.9 percent lower in mid-2016 than it was in early 2007, just before the Great Recession started: There has been no jobs recovery in those spottily-populated swaths of the country. The employment rate in metropolitan areas, in contrast, is 4.8 percent higher than its 2007 level, and businesses are adding jobs twice as fast in urban areas as they are in rural ones. The far-flung counties that boomed during the Clinton expansion started to lag during the Bush expansion, and really fell behind during the Obama expansion. “The urban counties of large metros actually did better in the recession and recovery than they did” during the housing-bubble years of the 2000s, Kolko said.
According to a report from the Economic Innovation Group, an entrepreneurship-oriented research and advocacy organization, the economy is growing more and more reliant on a smaller and smaller number of “super-performing” counties, some of them in or near Los Angeles, Miami, and New York City. Just 20 counties, out of more than 3,000 nationwide, accounted for half of the net increase in new businesses between 2010 and 2014. The number of counties seeing net job growth has dwindled, too. All in all, this adds up to, in the report’s words, “a massive and historically unprecedented imbalance” in geographic dynamism.
For many voters, that sense of stagnation and being left behind mixed with the potent forces of racial animus, sexism, cultural disdain, and political polarization. Indeed, economic hardship alone may not explain Trump’s victory so much as a desire in some regions for a more general political shake-up. Still, in the end, place, race, and class became far more important to understanding how the economy influenced voter behavior than anything that was happening to GDP or median household income. And there are signs that that will continue to be true going forward. Democrats are sorting into higher-productivity, higher-growth, higher-inequality areas that are more racially diverse—and hold less weight in the Electoral College. Republicans are sorting into lower-productivity, lower-growth, lower-inequality areas that are whiter—and hold more weight.