The nation’s bigger communities—powered by well-educated millennial workers and the agglomeration trends brought by digital technology—are now growing notably faster and accounting for more and more of the nation’s growth than before, even as small metros wane and most of the rural hinterland slides into deep decline. In short, fully half of all of the country’s employment growth took place in just 20 metropolitan areas, home to about one-third of Americans, led by the usual suspects of New York, Boston, the Bay Area, Seattle, and Washington, D.C., along with such fast-growing Sun Belt hubs as Dallas, Atlanta, Miami, and Orlando.
In short, the population in big cities gets bigger and richer, while the population in smaller cities and rural areas shrinks and gets poorer. Trump’s “solution” was to scapegoat foreigners and blame elites, while increasing the divide with a tax plan heavily tilted to the rich. He is selling small-town and rural residents a bill of goods — or rather, raising the price of goods, by tariffs. He has made grand promises but done little to fight the opioid epidemic that has gripped rural areas, and if given their way, Republicans would slash safety net programs that Americans in these areas depend upon.
If red America feels victimized by a global economy, secularization and increased diversity, blue America is rightly concerned about reactionary policies that are going to harm the parts of the country that are succeeding. (Brownstein writes: “Many public and private sector leaders in the big blue metros believe their economic success is threatened by the Trump agenda of hostility to immigration and free trade, the prioritization of tax cuts over investments in education and scientific research, the stoking of racial tensions, resistance to cultural change on issues such as gay and transgender rights, and the GOP move to limit the federal deductibility of state and local taxes.”)
Surely, politicians can do better than this. There are several policy approaches that would begin to bridge the gap.
First, we should encourage geographic mobility so that people can go where the jobs are. If need be, unemployment benefits should be convertible to a generous relocation subsidy. In the long run, getting people reattached to the job market and relocated to a booming area will be worth the price.
Second, the jobs will come to the heartland if there is an educated workforce and sufficient infrastructure; we should invest in both. Instead of slashing revenue with unneeded tax cuts, we would do well to expend money in places where population and job opportunities have declined.
Third, the irony is that immigration is part of the solution, not the problem. Michigan is a perfect example of how recruiting immigrants can stoke an economic revival:
In 1990, Michigan’s immigrant community represented 3.8 percent of the state’s total population, according to [a 2016] report. By 2010, that share had risen to 5.8 percent. Between 2010 and 2014, Michigan’s foreign-born population grew by 10.2 percent—almost twice as fast as the number of immigrant residents increased in the country as a whole.That’s significant, [Gov. Rick] Snyder has said, because growing Michigan’s economy requires growing its population — and the way Michigan has been doing that in recent years is through immigration.According to The Kauffman Foundation, a nonprofit group that studies entrepreneurship, immigrants were almost twice as likely to start a new business in 2015 than the native-born population, the report says. In Michigan, foreign-born residents currently make up 8.3 percent of all entrepreneurs in the state, despite accounting for 6.5 percent of Michigan’s population. … At a time when the state is grappling with an aging population, immigrants are helping to replenish the ranks of working-age residents, the report says.
There are few things more counterproductive economically and ruinous politically than using xenophobia to whip up political anger. Simply capturing a larger share of student visa holders would be an economic bonanza. (“In 2014 students on temporary visas made up roughly one out of every 3 students earning a STEM Master’s degree at Michigan’s universities, and 39 percent of students earning a PhD-level degree in STEM. … Retaining even half of the 2,470 graduates earning advanced-level STEM degrees in 2014 could result in the creation of more than 3,200 new positions for U.S.-born workers by 2021.”)
Fourth, Trump’s initiative against opioid addiction is a joke. (“Trump has not formally proposed any new resources or spending, typically the starting point for any emergency response. He promised to roll out a ‘really tough, really big, really great’ advertising campaign to spread awareness about addiction, but that has yet to take shape. And key public health and drug posts in the administration remain vacant, so it’s not clear who has the authority to get new programs moving.”) Congress needs to allocate funds, insist that positions be filled and exercise strict oversight.
Finally, a trade war spells disaster for rural America. At a time that Canada, for example, has reached an agreement to enter the Trans-Pacific Partnership, we’ve missed the opportunity to expand markets. Rather than throwing up tariffs, we should be aggressively opening markets. A protectionist trade policy is economically suicidal.
In sum, the economic divide — in large part a rural/urban one — is politically and economically unstable. Rather than further that divide, both parties should pursue constructive policies to help red America enjoy the fruits of the global economy.
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