I've been involved in economic development for 30+ years at local/regional/state levels, and developed a model for communities to use to plan for sustainable economic development (LASER, 2006). Economist JM Keynes said it well in 1930s that economic health depends on business investment, and that depends on the animal instincts of businesspeople. Their "animal instincts" concern what will work in the future, since nothing it certain - and businesses rely on their gut sense of the future of the communities in which they locate - and the past doesn't necessarily predict the future, though a combination of competent governance, growing industry clusters of industies with a bright future, and the ability to attract globally competitive labor can predict the future well enough to guide business decisions. Can tax incentives tilt the playing field towards less attractive rural places? Generally not - they aren't strong enough to overcome all the other factors behind global competitiveness. I know - I managed tax incentive programs for a dozen years. In short, rural areas are in trouble since what businesses need includes global competitiveness capabilities of labor, transportation, and industry support systems including financial services, etc. As T Friedman pointed out in his book on change - change is accelerating re: globalization, tech and climate, and areas must have resilient approaches to it - not static/reactionary ones.
15
I live in the general area covered by this article and feel it is ignoring some critical facts about the political breakdown in these two counties..
1. The rural parts of Loudoun County, VA and nearby Frederick County, VA are Trump Country just like Jefferson County, WV. If you take away the part of Loudoun County that is basically the D.C. Suburbs, and therefore the most populous, then you are in a rural Trump-loving farm community that endeavors to send their children to Liberty University.
2. The other factor that is not addressed is that Loudoun County is probably about half as white as Jefferson County, WV.
That said there isn't much more opportunity in the rural border part of VA then there is over the line in WV. That is why the working class folks in the rural area commute to factories in Winchester while the white collar folks drive to Leesburg or Harper's Ferry and take a train into their government (or gov contractor) job in the greater D.C. Area.
20
Now, Go to the Washington Post....and read the article about the TWO collocated boarding cities, Bristol VA & TN.....it’s the totally opposite conclusion
5
I live in a beautiful, economically depressed county in NE NC. I moved here for the civility, low crime rate, natural beauty, and low real estate prices. I telecommute to a high paying job 1000 miles away. I am 40 minutes from gorgeous beaches and 40 minutes to metropolitan Virginia Beach. Counties around me are progressing while mine is stagnant. It should be considered an attractive bedroom community for the Chesapeake/Norfolk/Virginia Beach urban areas, yet it is not. Why? Poor management on the local level - the worst USPS service in the US, staggeringly high utilities, inept city and county officials, a medical monopoly, and sub-standard public schools. We have the largest Coast Guard base in the nation and most newcomers are warned to move to an adjacent county and commute. There are plenty of jobs here - in fast food service - and even there, employees can't manage to place the correct order in a bag. Young people who are intelligent leave here for better opportunities, leaving the laggards whose acquired helplessness allows the the city and county governments to make backward decisions.
15
The US is one of the only nations in the world (perhaps the only) that pays for schools through local taxes, a practice ultimately rooted in racism. This educational divide is a key part of the problem that is rarely noted. Suburban Virginia has the wherewithal to pay far more on its students' educations since it has rising real estate values whereas rural West Virginia (or urban Detroit) has the opposite challenge. Rising real estate values mean better funded schools which loops back to further rising real estate values, giving us the greatest educational gap on the planet. Until we attack this fundamental injustice, these divides will remain. Education is a national good, and must be viewed as such.
54
Anytime we're talking about farm country, we need to remember a long term trend that is not reversible: the average farm size has been increasing for at least 100 years.
As farming gets more efficient, crop prices stay low, and it takes more and more acreage to support a farm family. So, any given county has fewer farms in it today than 100 years ago, fewer farm families than 100 years ago, and the families that are there are smaller. So, most rural counties are shrinking.
In the old days, a larger population, distributed around a state, used to support a lot of small towns and each of these towns had businesses that provided non farm employment. Now that the farm population has dropped, the scattered small towns have dried up, taking the jobs with them. In some states, the only viable towns left are the county seats.
What might turn this around? Nothing. You can't entice employers to set up shop in a lot of these areas. There is no work force. And do we really want to engage in national policy that's like dropping bales of hay to snowbound deer to create some sort of dependencies?
16
Connecticut seriously has this problem. It is the Tale of Two Cities in that state. Compare Fairfield County with Hartford County. Massachusetts is also similar. Compare Bristol County with Barnstable. Night and day.
5
Third Way proposals have been around forever. It is just another corporate think-tank for the Democratic Party, funded entirely by corporations and wealthy individuals. Instead of tax cuts and small business loans that indirectly target regions, you could have a federal jobs guarantee along with tuition free college or trade school available to everyone. If people don’t have opportunities or skills then offer them work or a way to develop a skill set. Targeted tax credits and small business loans and the rest are the same thing recycled over and over again. They never seem to work. And usually are a backdoor way for companies to do little but take tax advantages.
The whole thing is a ruse to give tax cuts. The tax cuts are supposed to incentivize businesses to create jobs and raise wages. But there is any evidence that that has ever happened. One thing would be convert unemployment offices into employment offices.
5
An inequality in opportunity... Hmm, seems like an issue the historical Republican Party would address with gusto. But now they just blame it on others while simultaneously making the disparity worse.
11
I think everyone should be encouraged to leave their childhood place. If the outside world is better, then stay. If they decide the childhood place is better, then return.
On the flip side, I am puzzled by people who remain in economically stagnant towns and complain immigrants are taking their jobs. They can move to where the immigrants are going to pursue the same opportunities and they have the advantage of citizenship.
22
In Suffolk County, NY (where the Hamptons summer colony is located), the median household income according to the Census Bureau was over $90,000, which is higher than NY County (Manhattan). This county also went for Trump.
4
Why am I not surprised that this reporter relies entirely upon economists for this not news news. Well, when such a one as Summers opines that places ought to start being considered by economists, we have a clue. Any geographer of standing could have told these folks (yes, my Ph.D etc. qualifies me), and decades, many decades ago.
This piece is just another of the immense numbers of data points documenting the dissociated state of the so-called "discipline" of economics, dissociated from other disciplines even where there are no nasty ideological conflicts with them.
The worsening crisis in the economics profession is all about anti-realistic (disproven) assumptions, many of which have been notoriously known for many years. But sectarian ideological beliefs held at the most intense levels of emotion have caused the supposedly "canonical" or would-be "orthodox" versions of economics to just pretend that things are different than they are. (So when are economics reporters going to cover THAT story?)
Meanwhile, adherents of these anti-scientific (anti-empirical) economics are especially prone to denigrate the other behavioral sciences (eg., psychology) for their difficulties in replicating their findings.
In other words: all sorts of prevailing beliefs about "economics" are dead-wrong, reporters are not doing their job, other related disciplines are not so badly off-base (because at least they are acknowledging their errors), and so forth. Hear me Mr. Irwin?
4
There's a reason it's called "the dismal science"
3
"But it is clearer than ever that this divergence explains much of what ails the United States’ economy, and just maybe its politics, too."
If one were to expand this idea to an international scale then the reason behind the current migrant situation would become obvious. Foreign aid used to help but no longer seems to be fashionable among those in power. Let's face it, there's no shortage of money out there, it just needs to be spread around more evenly and the people at the top probably wouldn't even notice the difference unless their accountants told them.
17
The impression I get is that Republican voters want their guns, and that's why they vote Republican. It's not that they don't want to be unarmed while the police are armed. They just like guns a lot. I can even understand that maybe firing a gun is exhilarating. I love accelerating fast cars. Maybe a gun feels like a hand motorcycle. I don't know. I've never held or fired one. But I can't understand just liking guns and reading about guns and attending gun shows. I can't understand gun people. If voting Republican IS about gun ownership, then it's hopeless. Gun people and non gun people are almost different species.
13
Tech companies want a dynamic, educated workforce. They’re not going to find it in towns where everyone is a conservative in their 60s.
39
I spent the weekend in the Hamptons (Southampton and East Hampton). It's not a rich part of the country (I mean the locals), but the towns are clean and pretty and massively efficient (in terms of tourism), the beaches are clean and nice, and the local businesses (stores and restaurants) operate with great efficiency. Vacationing in the Hamptons is a joy, in part, due to the fact that the towns are so well kept and the businesses are so well staffed and operated. I know it's not coal country, but the locals are not a whole lot wealthier. I don't really have a point. I'm commenting on the service industry, mostly. Anyhow, that's South Fork. North Fork is all wineries, which attract tourists and furnish much of the wine imbibed in the Hamptons. My hunch is that Napa Valley is similar. Maybe the mistake is trying to get $$$ from the government or from the rich through the government (taxes). Get money straight from the rich through wineries and casinos. If VA increased the speed limit to 95mph, out-of-staters would visit just to drive, pay tolls, and pay higher gas prices. Get creative. The government isn't going to help. Vermont has mountains. What do you have?
2
The average sales price for a Hamptons pad hit $1.6 million in the second quarter—on par with Manhattan and way above San Francisco.
The most expensive home in America just sold in East Hampton, for $147 million.
3
sure, but those are mostly second homes. there's a population there who doesn't have money. i'm not overlooking the presence of the uber wealthy. I was talking about the working class people who seem to thrive on the income imported by the uber wealthy.
Look carefully and you’ll see that a lot of the summer help in Montauk - part of the Hamptons - is foreign students here on temporary visas. Eastern European and also Aussies and New Zealanders.
8
For these two counties, geographically similar, a high tech company would surely choose the Virginia one for many reasons, from infrastructure to that it would be hard to attract enough first rate workers in West Virginia. And when a few students do excel in the not so good West Virginia schools, many of the ambitious grads will seek better jobs where jobs are - which is not in the West Virginia county!
Partly, there's a cumulative effect. I am a nurse in home care and hospice in Indiana. The most Republican county I travel doesn't spend much on roads and bridges so they are in disrepair. I remember when that county only had two trucks that could mount snowplows. And they only had two drivers licensed to drive them, one of whom was the county highway department director who had other duties. The county next door DEPLOYED over a hundred snowplows each snowstorm, as did one city in the county, and a small city deployed over two dozen more. Guess in which county business got done during the winter, and which county's large tax base kept expanding, and which county's citizens would not allow the tax rate to increase to care for the highways.
Had the Republican county's people wanted to, they at significant cost could have brought their highways up to local standards in about a decade. Bringing their school system up to the standards of the Democratic county? That would take a generation, or more.
33
Poor rural counties, like poor urban neighborhoods, lack the political power, infrastructure, educated workforce, cultural attractions, and social stability to attract major corporations to invest in them. Poor counties are currently losing clinics, hospitals, and public elementary schools, and housing for the working class and poor is deteriorating. They are increasingly isolated not only from the global economy of the coastal cities, but from the gig economy of health care aides and hospitality work. Only a massive Tennessee Valley Authority type investment, paid for by an increase in the federal business tax, can turn rural America around—Trump isn’t going to do that.
16
The difference of course is something no one wants to touch with a ten-foot pole... it's the difference between the predominance of smart and the predominance of stupid. If you want to understand the difference between the two counties, just understand the difference between areas that have populations which are primarily critical thinking and those which have populations which are primarily non critically thinking.
It's interesting to note that San Mateo County California, which is Silicon Valley, has a larger GDP than many red states. Another interesting indicator, the state of California this year has a 9 billion dollar budget surplus which is larger than the state budget of most red States.
You can talk around this issue all you want but that really is the bottom line. In the way of clarity I'll relate an anecdote. On Facebook I engaged the coal miner from the Appalachians who said that the president could order all the coal fired electric plants reopened. I pointed out that he couldn't do that and the minor said but he can and that's how he's going to bring back our jobs. I said what would be the economic basis for your jobs? He asked me what is an economic basis.
50
In regards to California's surplus, of course if you tax people enough the state will end up with a surplus.
you are the man..Calif has a trillion in unfunded pensions so you may want to recalculate that surplus. Also Calif is driven by people not educated in the US K-12 system with emphasis on sports etc. In any event the volume of "stupid" people will outvote the "smart" people as evidenced by the past election(I know electoral votes). Even though as a career IT person with advanced degree recently retired I could side with "smart", I would rather side with the people who do the "working and paying and living and dying" (to paraphrase George Bailey)
4
A quote from FDR seems appropriate at this point “Mr. Justice Holmes said “Taxes are what we pay for civilized society.” Too many individuals, however, want the civilization at a discount.”
"The paper says targeted tax subsidies in those areas could create broad benefits."
But "those areas" supported Trump in large numbers, giving us the worst, most dishonest and most embarrassing president in American history. People who live in those areas tend to be against "redistribution." This is what they've learned from Fox News, right-wing talk radio and right-wing websites like Breitbart and Drudge.
Moreover, blue states already subsidize red states to a great extent, a situation made even worse by the new tax law. If they can't learn by example from the counties that voted for Hillary in the last election, which accounted for 64% of the country's GDP, then they should move to areas that are more liberal. If you can't beat 'em, join 'em.
14
The only good thing about the tax cut is that the blue states will have much less to send to the red states. Once the reduced redistribution hits home, perhaps the red states will take a new view of the concept.
8
As someone who has recruited for multiple high-tech companies: In as much that high-tech is driving much of the growth (viz google, apple, facebook, etc.), it's pretty obvious (to put it mildly) which county a recent college grad, or a 25-year-old, will go to. They come from institutions that preach (and to some extent practice) diversity. The students have friends and instructors from around the world. Their first workplaces, if they work at say Microsoft, will also have a worldwide, proactively diversity seeking context. They also often want good public services (e.g. rapid transit) and at least the option of a good public education for their kids. Trying to recruit them to a place where color, gender identity or national origin might cause "pushback" is absurd. It's clear they are willing to vote with their checkbooks; they will rent or buy in San Fran, Boulder, Seattle, Silicon Valley, in order to find this environment. High tech companies go where the talent it is; it remains in these higher-priced "hoods."
19
Do any of you really believe that the wealthy elites and corporations care about "struggling" areas of the country?
Today's economic environment is driven completely by shareholder value. There is no other objective.
Therefore, don't expect any help for struggling areas of the country in any way, shape or form. No new infrastructures. No new schools. No new training programs. No new jobs. Nothing.
Just wait until the last of the New Deal programs are dismantled by the current criminals running the country? Then we will see exactly how much Americans really care about each other.
34
Nobody expects business to be charities. Those struggling areas could tax (fairly and not deal breakers) those extractive industries they have, provide the infrastructure etc., and attract more industries and build their economies. Instead they give it all away to the big businesses that throw them (the local politicians) a few bones in the form of campaign contributions and basically get away with murder. They the locals wonder why they live in depressed areas, aka Red States.
Sure it's all very complex, but it's also true that the high income high growth areas also have some of the highest local taxes. People there have learned that it's not how high the taxes are, it's what comes back from the taxes paid. The Progressive places have figured it out; the backward red places haven't.
20
Even if we assume that, say, pacifica (the west coast) really doesn't care about anyone or anything but their own checkbooks. the idea of a dude waving a Dixie flag, a crucifix and an AR-15 bashing open the front door should make it plain that something needs to be done. Remember - half of all people score below 100 on standardized IQ tests (. That's an awful lot of people. I think it would be a good idea to try and keep them busy doing SOMETHING that gives them some spending money and makes them feel good about themselves.
14
Thanks for your comment. Other's have pointed out that the higher income, growth areas are also the very "identity politics" (diverse) places that the backward, red areas love to hate.
1
Do democrats have any other ideas besides taxation and subsidies?
2
Do you?
10
it's called investing.
you invest in people, in transportation, in infrastructure, in underlying science, and in businesses too.
if you don't, we fall behind to other countries that are prepared to handle future demands.
23
It's a little hard to take the "Third Way" think tank seriously.
This is set up to destroy things like Social Security.
Also a bit hard to take seriously analysis that fails to mention that the purchasing power of the US federal minimum wage has decreased enormously since the 1970s.
So highly typical blinkered NY Times economic analysis.
6
According to Wikipedia, “From 2017 to 2018, Loudoun County saw an increase of 18.5% of households experiencing homelessness, a 21% increase for single adults, and a 36% increase for families.” So, homelessness is the opportunity cost of living in Loudoun County.
9
That's interesting. You'd never guess it driving through there. I'm wondering 18% of what number. I'm guessing a very small number since Loudon is the single wealthiest county in the US. You should come see for yourself and compare the raw numbers of homeless here as % of population to those where you are in Chicago. Then report back and let us know!
1
More of the same that's been printed before. These people will be moved to more prosperous areas. And given the high costs of housing in those areas, they will live where? The country doesn't invest in infrastructure, especially transportation, so they will get to those low wage jobs how? Better yet, they can get low cost business loans. Who is going to be their customers in these depressed areas. It's amazing the contortions the connected think tank people will go to not find fault with the political economy.
10
"People trying to shape national policy" are the problem, not the solution. Most of the problem of low wages for the lower economic classes comes directly from globalism, which is a national policy pushed by sometime both parties. These "people" decided that raising the living standard of third world countries was more important then maintaining the living standard of American workers. That and open borders had created a stagnant wage growth for workers but skyrocketing compensation for executives.
7
I don't know... There are tariffs in place now. We've pulled out of some major trade agreements and are renegotiating others. A major tax cut was passed in December. The stock market is at record levels. Illegal immigration is way down. And, most significantly, unemployment is lower than at any other time during the last 50 years. Some companies are complaining about an inability to find qualified workers fast enough. All these should propel higher wages.
But 18 months into the Trump restructuring of our economy, with varying progress on all these key Trumpian programs, the words most often used to characterize wage appreciation in the US are "anemic" and "puny."
(https://www.bloomberg.com/view/articles/2018-06-11/a-tight-u-s-job-marke...
The Bureau of Labor Statistics says, "Real average hourly earnings were unchanged, seasonally adjusted, from May 2017 to May 2018."
(https://www.bls.gov/news.release/pdf/realer.pdf)
So why aren't wages going up? Nobody in the Trump administration believes--- as you put it--- that "the living standard of third world countries [is] more important then maintaining the living standard of American workers," do they?
Maybe the problem isn't the simplistic "Globalism is bad" mantra that underlies Trump's agenda.
Anyway, over the next year, as tariffs take hold and cover more industries, we'll see if wages go up. I predict that we will see another recession and many workers' wages going to zero.
14
Globalization is not driven by some national policy experts, it is driven by corporations seeking profit. You seem to be arguing FOR national policy, like Trump's tariffs, that would thwart free trade by throwing up barriers. To me, that seems artificial and ultimately self-defeating. It is inevitable that, as the global economy evolves, a much larger percentage of countries in the second and third worlds will achieve upward wage mobility. You just can't keep the economic tiger in a cage by politics alone - the markets will prevail. The larger question is how well world leaders will cooperate to ease worldwide hardship and avoid warring over diminishing resources. Economic policies based on nationalism will only lead to more conflict and more strife.
5
Globalization is also a product of other countries getting smarter. If you want to set-up shop in another country, one of the first conversations is about what you are going to bring to that country. No longer can the US just for other countries to purchase our products. Those countries want to get something if their citizens are going to purchase your products. They don't just want money flowing to the US. They want some of that money to stay in their country through jobs, taxes, etc.
In the 1930s and ’40s, the public sentiment was that we would be better off as a nation if everyone had comparable electricity and telephone service. In our own time, we haven’t made the same social or financial commitment to high-speed internet with the result that service in rural parts of the country has always lagged far behind city standards. That’s a powerful disincentive for companies that might otherwise start up or relocate in outlying communities.
16
For those commenters who say West Va. is too far to commute, and that's the real reason for the problem, Ashburn Va which is at the center of the tech development in Loudoun County is less than 35 miles from Charles Town W. Va., the main town in Jefferson County (Leesburg Va is even closer). Getting to high-paying jobs would involve a commute of under an hour most days, which is a very reasonable commute by Metro DC standards -- hundreds of thousands of folks have longer commutes than that in Metro DC. Take it from me -- I lived there for 35 years until retirement.
In short, geography doesn't explain the problem.
7
Obama was keyed into community needs---aided and made aware by the work he did as a community organizer in realizing access to important services, small businesses, rural manufacturers---and investments that needed for areas to thrive.
He worked in partnership with rancher/farmers/ forest owners to improve conservation of lands. Keyed into cities.
Had blueprints and accelerators in rural and urban areas.
Job search resources. All of it. In detail.
Does Trump do anything but tweet, eat, golf, whine, repeat himself, and hide out? Cause controversy, hire and fire lawyers, go to campaign rallies, and give opinions on useless subjects?
What a waste as infrastructure crumbles. What's he done lately to expand broadband? To modernize towns and invest in people?? This is a destructive yet useless presidency.
21
As the Supreme Court becomes increasingly conservative, and knocks down most federal laws attempting to address the environment, economy, labor markets, education, etc., this trend will only intensify. Red states, like Kansas, will undercut education and healthcare, and see their pool of educated workers and professionals shrink. Blue states, seeing that the Supreme Court will block common sense regulation, will be empowered to pass their own laws addressing commonsense interventions of local needs. Businesses with a national presence will have to meet the requirements of the larger market in blue states, without a strong federal government that can affect commonsense compromises.
11
Third Way is a Wall Street funded Republican-Lite think tank that pretends to be non-partisan. A stalking horse for policies favored by the same people who brought you the Grand Bargain.
They want nothing less than the full adoption of the neo-liberal political agenda. They are anathema to anyone who is Progressive or in the traditional left of center political mold.
One should also be aware that journalist Molly Ball, reporting for the Atlantic, saw them falsifying the results of meetings she attended after the 2016 elections when feedback from the meeting did not match their pre-conceived notions and desired outcome.
“The report surprised me when I read it. Despite the great variety of views the researchers and I had heard on our tour, the report had somehow reached the conclusion that Wisconsinites wanted consensus, moderation, and pragmatism—just like Third Way. “
https://www.theatlantic.com/politics/archive/2017/10/on-safari-in-trumps...
If they cannot deal with facts accurately why should we trust anything they say?
8
So what became of all the money we spent on the Appalachian Regional Commission?
1
This article is based on ignoring the demand side of economics. Where there are well paying jobs there are customers for small and large businesses. Where people are struggling customers buy essentials. The distribution of companies that pay well is patchy, just as you'd expect.
Most of the huge rise in the GDP in the last couple of decades came from cheap labor via offshoring, and importing cheap labor using the much abused H1-B Visa program at the higher end and immigrants, including undocumented immigrants at the lower end. The profits went straight to the top and were augmented by tax rewards. Corporations were and are subsidized, at the expense of labor.
Americans aren't stupider than when Big Tech was staffed with well paid Americans but schools have been badly damaged by being politicized and the War on Teachers and their unions and the workforce has been badly damaged by the load of debt on students trying to get a college education.
19
There is a divide I see my community college students repeatedly. These are adult students and twenty-somethings being pushed and prodded into adding to their technology skills by an outside force. The one term I find myself explain over and over again during class conversations about education and future training isn't technology based. It is financial. Over half of these rural area students do not understand the fundamental relationship and distinctions between debt and investment.
Decades of having the idea hammered from media, politicians, talking heads, etc. about how education doesn't really pay off... how education is a "Liberal" thing or a "rich" thing--has taken its toll on people without sophisticated economic lives or without a network of family and friends that have one. Investment overwhelmingly=debt.
This translates into voting. Voting for local politicians, voting for national politicians, voting for school bonds, and signing up for expensive classes when you live on less than a living wage.
During local elections the debate gets fired-up between groups of students. Too often it ends with the "...and this is why I want to move" phrase. Changes aren't coming anytime soon when the other half of the class thinks a dollar spent is "evil" debt and being marked for being poor they'd be stupid to spend one. The only greater "stupid" is the idea of free community college education--because it is government spending a dollar!
6
Income inequality has many causes, but the major cause is the greed of the rich and powerful, who have the money and power to keep the rich richer and the poor poorer. We are living in a new Gilded Age.
Look at all the people in areas of opportunity who can't afford to live there anymore. If you've only been able to rent, and can barely get by, let alone invest for retirement, you've missed the two best ways to keep up with cost of living.
Everyone is so mystified by wage stagnation and even decreases. Look at who's paying most of the wages: The rich and powerful who pay less taxes than wage earners, and influence policy in their favor. There are plenty of solutions, but the millionaires who run OUR government "believe" in trickle down economics and that the poor and working class are lazy.
12
Yeah, local differences are important especially since are voting system is so screwed up, but local differences are influenced by global, national ones. For example let's look at worker productivity vs worker wages.
From 1948 to 1979, worker productivity rose 108%, and hourly worker compensation increased 93%.
From 1979 to 2013, worker productivity rose 64%, and hourly compensation rose just 8%.
Now when the national results are skewed, you can't expect every county to have similar results. That would be an extremely low probability event. So you have to expect that in some countries workers would have done better than in others. But overall, workers have done worse so you have to expect there are more counties with workers in trouble than those with workers doing well.
Rather than just trying to go after the countries in trouble, if we can change the numbers over the country, this has to help
them also.
For example, if we had a guaranteed job program supported by the feeral government that would help the counties that need it more since they would have more people in it. The federal gov would become the employer of last resort. It would guarantee a decent job or paid training for such a job to everyone able to work.
There are plenty of things that need to be done--fixing roads & bridges, education, research etc.
And the administration of such a program would be much simpler and cheaper than any county by county program.
4
“Income inequality is a moral issue, but this is a different type of inequality — it’s inequality of opportunity,” Mr. Kessler said. “The question is how do you make sure that more people who do not have a college degree or come from the right place are able to have opportunity.”
That is takes Economics experts, policy wonks and professors to finally have their proverbial light-bulb-moment to connect the dots, just reveals how disconnected those we rely on to shape economic thought (and policy)- really
are.
Any one living in a rural (or even urban center) with high concentrations of poverty- can relate their own experiences with lack of opportunity:
City and County councils without meaningful inducements to attract new business; that is, tax incentives; or as developers and businesses call it; "Rooftops"; lack of transportation systems or poor mass transit systems that run infrequently and/or do not connect city-to-city. Lack of or abolished vocational/ apprentice training programs...
Even cities within the same country vary wildly relative to opportunity and economic bounty.
The little-picture of "things" are often lost in the often-unwieldy discipline of macroeconomics. Whether intentional or not; the net result is often the same; over generalized and stereotyped conclusions impacting policy and politics; Hopefully, these questions (or concerns) posed will fall on receptive ears.
1
The reason for the rather clean binary rift into places of prosperity and those of depressed conditions is a reflection of our culture that has promoted a binary vision of the world, be it in the good vs bad in movies or our long standing fascination with the ultra rich and powerful. There is very little differentiation nor interest or appreciation for the many shades of grey between the extremes.
On the eduction side this means the only viable cultural goal is to aim for an Ivy League degree, and little if any attention is given to the process of making, to crafts, to apprenticeships, pride of manual labor, and where better to do that than in the heartland. And exactly those areas could be the balancing regions to the thriving tech-industry along the coasts and ease the concern about our dependency on other manufacturing countries or the trade deficits associated with them. A good ecxample of where that works is Germany with its strong mid size producing industries and well esteemed craftsmanship.
Unless America discovers that Made in America is the answer to not just its standing in a global market place but to its internal ills, it will remain on this trajectory of national division.
Does this sound familiar to Trump’s agenda? You bet it does.
I am a ferocious Trump opponent, but this is where his efforts really worked, regardless how honest and truthful, but this is also where Democrats need to regain trust with the heartland to win it back.
10
Economists have a tendency to assume far too much rationality in their models of human behavior. Macro models may work well when analyzing issues from a "distance", but fail to provide a more richly nuanced understanding of issues. Regional or local cultures are powerful forces in human behavior. Culture anchors people to a place - place is a much more flexible concept than location - making change difficult. People resist doing things differently, even when it is in their social and economic interests to do so. For people in counties like this and thousands of other counties in the U.S., the necessity of embracing a highly competitive, economically dynamic, demographically shifting and educationally demanding world is simply scary. The problem with this kind of economic model is that it looses sight of the "irrationality" of human behavior. Until people's fear are dealt with, the problem noted in this article will continue. Fear has a tendency to make us nostalgic, not excited about tomorrow. The political implications of this are obvious.
1
It is the high cost of nostalgia versus the future promise of hope.
2
The West Virginia county is not commutable to DC and therefore is not booming.
The eastern half of the Virginia county, which is close to DC is booming, while the western half is not booming because it is also not commutable to DC.
The article should have been about geography. Instead it's about everything other than geography.
Fail
5
Commuting distance to DC has nothing to do with it. Loudoun is booming because so many tech jobs are being created in Loudoun, and that includes areas to the western part of the county. Loudoun can be reached by folks in Jefferson county.
1
It’s worth noting the the large building on the right of the photo houses “Raytheon”, for those uninitiated Raytheon is the purveyor of choice for goodies involved in blowing up nations that we or our allies don’t care for, that is an industry seemingly impervious to downturns, administration after administration, and when or our ideological partners run out of viable enemies we can be counted on to manufacture one justvas we have been doing since the Eisenhower years.
7
A more interesting comparison would be two counties in NJ. Genuinely major disparities in wealth in communities five miles apart.
West Virginia has been economically depressed literally for over 100 years. That state has more problems that just loving Trump in 2018
2
The GOP convinced tens of millions of Americans that, "Taxes are bad!" - Well you get the government you pay for and deservedly so.
14
This is a bad comparison. The development in Loudon is due to being in commutable distance to DC and Tyson’s Corner. The airport also helps.
7
Just a quick look at Google Maps demonstrates just what I expected - the article is totally nonsensical.
The development in Loudon County is taking placing in its eastern half, which is commutable to Washington DC. The western half remains rural and largely undeveloped.
Beyond the western half of Loudon County is Jefferson County, which is even more remote than the western half of Loudon County.
Not sure why the author chose these two counties. There are dozens of examples from which to choose - county close to the city is booming, the county bordering the booming county is moribund.
11
Give everyone in WV a stipend to relocate and turn it into a protected wildlife area.
12
Much like the fine state of Texas
The counties that favored the GOP are not smart . Look at how Wall Street said a few days ago Trump is heading for a major recession. Since 1945 there has been a major GOP recession in every administration. People in the poor counties need to purchase the NYT's and learn all this info before voting for the failures. Instead they voted for false promises from the GOP and another 4 years of hopelessness. Plus the GOP now want to stop reporting how much Green house gasses are in our atmosphere. They are in denial about the seriousness of climate change and by voting them in we may be a wilderness sooner than later according to our Pope Francis recently talking to oil men. President Obama had the longest sustained economic growth ever after Bushes nightmare economic recession where he gave everything to the rich also.
8
Blue cities and counties are the economic engines....
13
I'll take a different tack. IQ is supposed to be a bell-shaped curve centering on 100. That means there are a lot of Americans with IQs of 85-100 that are not suited to highly technical jobs, and the problem is not "lack of education" or "lack of technical jobs in my area". The question is, how do we ensure that those people have meaningful employment so that they are not a welfare burden? Although I am a Democrat, I must say that illegal immigrants do threaten the ability of the market to employ existing Americans from these categories, and if immigration were limited, then market forces would move the wage offerings for basic support labor up into a more livable range where legal Americans would be more willing to work these jobs. I am not trying to minimize the plight of foreign Central Americans, just highlight the plight of US workers without technical aptitude.
13
If your ideas are correct, then we should find that county lines are sharp demarcators of IQ, by which you seem to mean an innate ability in human individuals that is either genetic or acquired early in childhood. I don't think that is true. I have spent a significant part of my life living in rural areas, and I don't see such a difference. Quite frankly, some of the most innately smart people I have ever met have been farmers, auto mechanics, carpenters, and hvac technicians in rural areas. When you're working by yourself in an area with little backup if something goes wrong, a harsh climate, and a lot of customers who might or might not be able to pay you, you have to be technologically adept and highly creative just to survive.
Frankly, you would have a very difficult time convincing me that people in the less-successful counties of the US CANT be educated to do highly productive work. If you are talking about hurting our overall economy in order to artificially raise the cost of providing low-skilled jobs then you are talking about a double taxation on the economy as a whole in order to provide make-work. Personally, I think that raising the pay for certain jobs by creating artificial scarcities of workers will result in the wealthy using a small part of the unspent cash they are sitting on to invest in robots.
4
Grin, your point about, for example, the two counties in the article having similar vs different technical aptitude, may be true, and it would be informative to see some real data on this. If indeed the innate intelligence is the same, then of course education and opportunity are sorely needed in, for example, West Virginia. Data will guide policy on this.
Regarding market forces for basic labor, I beg to differ that this is an "artificial" shortage, and would instead suggest that filling these jobs with illegal workers from other countries is an "artificial" surplus. As long as most upper middle class and upper class Americans are unwilling to provide food, shelter and medical care for poorer Americans unable to afford it, then we need to make sure that these poorer Americans have the opportunity to provide for themselves, and that means protecting labor markets from artificial wage and benefit depression due to abundant illegal workers.
1
The problem with your argument, Will, is that right now any likely problem is with legal, not illegal immigrants. There have long been bipartisan efforts to reform immigration law to reduce the amount of illegal border crossings. In fact, the Obama administration was so effective at tightening the borders that some people were calling him the "deporter in chief". As usual, there is a lot of corporate money involved. Especially in the 1960's and 1970's, many businesses massively recruited illegal immigration to reduce their labor costs. As usual, money talks and the government largely looked away. Although the Great Recession had a lot to do with it, the total number of undocumented residents is smaller today than it was in, say, the times of the Reagan and Clinton administrations.
Also, most economists agree that it is the continued legal immigration to this country is a large reason that the US has not suffered the stagnation, high public debt, and deflation of Japan. Both nations have a rapidly-aging native population, but immigration in the US has meant that there are new, educated, and dynamic workers to provide a tax base for the needs of the elderly.
1
As often happens, the comments are more interesting and astute than the original essay. Our elite, expert class aren't holding up their end of the bargain.
Here's a thought: Much of W. Virginia is still quite beautiful, rural and mountainous. Why not help some of it return to a more original state (re-wilding) using the local expertise and the elbow grease of the locals. These local people could decide for themselves whether to allow hunting or not, whether to harvest wood or not, whether to stock the trout streams etc. and how to make some money from their own resources. The carbon capture of all the new forest growth should make the idea very popular with the rich folks in Loudoun Co. The tourist trade, whether it's giant RVs or skinny adventure-campers or birders or hunters etc. might just make it into an economically viable, and heart-breakingly beautiful, place.
12
Not a near-term option, with mountains shaved off, acid mine drainage, denuded slopes everywhere. With all the damage mining has done, it would take decades and billions of $ to make that wrecked country into a place people would want to go for a wildland experience.
8
To paraphrase Tip O'Neill: all economics are local.
5
One, the most important one, of these factors is education. Help the rising and right side of the bell curve of IQ. The base 'base' which owns the left side, cannot be helped as successfully.
5
Haas’s Iron Law of Borders states that commerce, populations and culture congregate on the side of the line of the state having fewer taxes and regulations, We just drove past the Michigan-Ohio border on M23/I475.
There are abandoned fields, woods and no houses or exits for the last three miles on the Michigan side but that changes immediately to homes nestled in pleasant neighborhoods and an interchange with gas stations and stores 500 yards south into Ohio.
Michigan has been dominated by the teacher’s and auto workers unions, and an anti-business, redistributive political animus for years. The same phenomenon occurs with our borders with Wisconsin in the upper peninsula and with Indiana on the southern edge.
I wrote this up on on a conservative website called American Thinker, On I10 going north from El Paso, a 105 store outlet mall, and two major truck stops prosper on the Texas side. They grow alfalfa out in a desert to 7200 Holsteins; the cowflop scent made the first five miles of I10 of NM almost impassible.
My contribution was seconded by a horde of truck drivers.Google Earth” state borders to see which side of the border has building and other signs of economic liberty.
My point is that counties do not make oppressive economic rules. States do.
Google-Earth is simple and cheap to out states with ambitions to “help” their people but that discourage enterprise. We should ignore voting patterns and welfare policies designed to correct state induced dysfunction.
1
Poppy cock! I live in Indiana, a state that has lowered taxes and rolled back regulations. Most of the state, outside a few pockets of prosperity, is struggling. Roads are crumbling, health metrics are among some of the worst in the country. Turns out that businesses don't want to come to places with lousy schools, crumbling roads, and unhealthy people.
71
Erwin, your comment is hilarious. Thanks for today's chuckle.
12
The Great Kansas Tax Cut Experiment Crashes and Burns. Forbes, 6/7/17
All that tax cutting was supposed to encourage all sorts of new enterprise. Utter failure.
Try again.
22
The answer is political leadership and a educated population,the largest employer in Jefferson County is Hollywood Casino. The school system is dysfunctional,the opiate empidic is overwhelming resources.West Virginia is still waiting on those coal mines to reopen!
19
When you don't believe in evolution, think the planet is just short of 6000 years old, and your favorite books are the Bible, and "God, Guns, Grits and Gravy", things don't tend to go well.
When your mindset is to vote in overwhelming numbers for Donald Trump, things will go down the tubes.
Some backward places are responsible for their own backwardness.
70
That's gold, Matt....GOLD !
I'm surprised the article does not compare education levels between advancing and lagging counties. My guess is that has a lot do to with it. High tech companies are going to locate where they can find educated workers and the people they bring in from elsewhere will want good schools. Education and school quality is likely the key.
The question then becomes how you equalize that; no doubt a difficult problem.
28
This is an interesting article that apparently garnered little attention given the volume of comments. But is tells the story of what drives the polarization in politics today: the massive loss of manufacturing jobs in the last 15 years - something on the order of 5 million. The disparity in job availability isn't so much a function of a growing tech sector with certain special jobs in small rural areas. Its a function of manufacturing jobs completely disappearing. The Republicans tapped into "China-hate" very well. The Democrats, bought and paid for by International Finance, refuse to acknowledge the problem.
15
Considering how tech industries claim their great need for H1-B visa holders, how about basing those visas on geography? If there is an untapped quota of H1-B visas allocated to West Virginia, might that help firms there and/or encourage outside firms to add a presence there? All tech work does not to happen in Silicon Valley or Boston.
It might also be fun seeing how seeing the benefits of immigrants would mess with the minds of people in insular places like WV.
11
I am encouraged that Larry Summers and other economists and analysts are starting to put two and two together about how some areas of our country are suffering greatly while others thrive. Just looking at national metrics and averages camouflages the fact that these pockets of economic desperation need HELP asap. We need good ideas, entrepreneurship, attention from policy-makers, educational partnerships with business so our young people and older people can be trained for new industries, and did I say good ideas. I refuse to believe that our great nation can't find solutions to help people who just want to work.
And no, I don't think everyone in America should have to move to a huge city to find a job. I don't really think you want that either.
13
Let see here, WVA is run by coal companies and their lackies and VA is governed by Democrats who support progressive policies. Could that have something to do it? Quick, find an economist to run a regression analysis.
92
I recommended your comment with a caveat. Northern VA (around DC), the areas around Richmond, Charlottesville and Virginia Beach skew Democratic, but we're a big state. Lots of space between and it is filled with Republicans, including those who chose Stewart to run against Kaine.
8
The article does little to explain the gap. It has long been noted that blue states are subsidizing red states. As Thomas Frank points out, the Democratic party decided to go after the professional class. These folks want good medical care, education and tend to be healthier in general. They also start businesses in places where they want lower medical costs, a well educated work force, and public transportation (and bike lanes, etc.).
Meanwhile, Republican policies have tended to degrade public education with for-profit proposals that do not result in real education. They are essentially schemes to funnel state tax money into private corporations (often political supporters). The blue states / red state divide was made even worse by Obamacare, where blue states took up the Medicaid proposal and created a healthier population. Better health doesn't just save cost - it enables smart poor people a better chance to survive and succeed. No one works harder than a smart poor person.
The economic divide between red state and blue state is growing because Republicans are creating more destructive policies, and they are selling them to poor people through bribery (it will lower your taxes and put more money in your pocket).
The common wisdom associated with policies than improve education and health care is "we can't afford it". This is as true for "Medicare for all" as for "free state universities".
81
I live in Indiana. Republican policies have nearly run the state into the ground. A new organization recently conducted a series of town hall meetings around the state--where little discussion was allowed--to bemoan the poor state of Indiana's health.
Many of the same people who belong to the organization stood by while a succession of Republican governors slashed taxes, cut funding to public schools, promoted charter schools, rolled back environmental regulations, encouraged explosive growth of industrial farming, cut tobacco prevention and cessation funding, etc.
Now, they are in a panic because it turns out that businesses don't want to come to a state with a relatively high percentage of smokers, high infant mortality, obese people, uneducated people, and so on.
60
You for got that Republicans also seek their destructive polices with anti abortion and pro gun rhetoric.
2
I think is should be pointed out that one of the reason California became an economic powerhouse is the system of public education they build. Its not what it once was, but it educated generations of smart, skilled workers. That is why business flocked to CA.
8
The fundamental issue is class (or geographic) mobility. America no longer ranks high in economic or social mobility - where / to whom you are born is the largest determinant of where you'll be when you die. Corey Booker just wrote a nice essay at Brookings Institute that describes his perspective to fix this. It's worth a read.
History is filled with revolutions caused by the friction between the have's and the have nots. So far, America has eluded this because we continue to be able to work it out within the system (ex: Bernie Sanders, Donald Trump). I fear that this will soon end as the very things people wanted economically from a Trump administration are the things the administration is ending. The recent tax bill will further exasperate the gulf and make upward mobility harder.
We will succeed as a nation when we move away from Republican and Democratic labels and move to address the regional issues described in the article (at a local level, not federal).
10
At some point, one will need to address the question of whether it continues to make sense to invest economic, human and intellectual capital in areas with poor to no chance of becoming economically viable in our emerging post-industrial world. Extractive and manufacturing industries are becoming even less dependent on manual labor; the major growth industries will be in intellectually and educationally demanding technologies.
Provide incentives for those who wish to migrate from the economically unviable areas to migrate to those that are viable; leave the others to 'rust in place.' In effect, this is already occurring as shown by the differences between red and blue states.
While this strategy is likely to exacerbate inequality, at some point the inequality will come to a head with some sort of revolution/civil war--red vs blue with the potential for the US to split into two countries. The affluent, progressive, technically sophisticated blue country and the poor, regressive, uneducated and unemployable red country.
11
No, absolutely not. The solution is not to abandon rural America. The solution is for smart people to figure out ways to BRING economic opportunities to those areas that you are talking about. America's think tanks should be buzzing with people figuring out how to capitalize on the people and open space available in "economically unviable areas"--look at those features as resources, not weaknesses.
10
That sounds nice, but the people in a position to change things in red states are not open to different ideas. At least, I've not seen that they want to learn anything.
I'm educated. Most of my friends are educated and almost all of us have moved multiple times in pursuit of better opportunities. All of us in the US are decended from people that moved a better life. But people in failing areas deserve for opportunities to come to them?
I question any policy that consigns lagging counties to endless oblivion, such as by encouraging residents to move to counties offering better opportunities. This will relieve the suffering of a few, but not the many who remain stuck.
The situation is dire in places. A nearby north Fla county recently went to a charter school district. That's right. It didn't merely replace a few failing public schools with charter schools; it outsourced the operation of the entire school district. And too often the only growth industry in rural north Fla is the prison industry.
A set of solutions will be difficult to find and then agree upon, but we must not let the areas and their residents languish while we pat ourselves on the back because, on average, "we" are flourishing.
3
Or perhaps more to the point, what kind of people would you expect to be living in a county won handily by Trump. Is the vote differential between the two counties driven by a difference in economics; or is it that the economic difference is a reflection of a population of people with an intellectual level so unsophisticated that they readily succumb to a con man.
48
Are you crazy? Intellectual level? Should poor people, long dependent on extractive industrial giants for work, and deprived of education, adequate housing and medical care be considered imbeciles? These people have been deprived of education, deprived of ambition, deprived of opportunity outside the boundaries of their counties, deprived of dreams of better lives! Take "these people", put them in urban areas with good schools, decent housing, and fair government and -- guess what!
Sophistication is not an inherited trait. It's been shown time and time again, that when poor people get access to education, knowledge of the world, skills preparing them for good jobs -- their "intellectual level", suddenly becomes "sophisticated" and their contribution to the American community soars. Shame on you!
6
In 1998, I was a college educated professional consulting in Marketing Communications for Fortune 500 companies. I was doing very well indeed.
At 58 years old, my personal foundation began to crumble as I encountered Ageism for the first time in my life.
I had a hefty bank account, excellent health, and a valuable skill. Still, I was worried about my finances.
A year later, I received an email from a "widow" in Nigeria whose high-placed husband had been "assassinated." He'd left millions of dollars in various hidden accounts. Could I help her gain access to the money, in exchange for a hefty percentage of it?
Trust me, I thought long and hard about it.
Unless you've faced similar circumstances, you're in no position to judge.
2
Sacques, you are right. But what can you do when people constantly work against their own interests? Who vote against good school and public health? Who vote repeatably for candidates who do everything they can to keep the people poor, dumb, and hopeless? What can you do?
Robert Byrd was a West Virginia Senator for over 50 years. He was adroit at using appropriations for projects in his state, including a major federal center in Martinsburg, which provides decent paying jobs, plus benefits. Byrd also funneled money for major interstate highways (i.e. I64 through Buckley).
That said, I think the comparison suffers from it being two different states, even though the counties border each other. WV has been stagnant since 1950, in fact there are 200,000 fewer residents today. The state has been ruined by decades of horrible environmental practices. I grew up in DC and used to kayak, backpack and rock climb in WV. I wouldn't consider doing so today as the state is wrecked. The state has focused on extractive industries, which benefit few people, rather than it's formerly attractive beauty ("Wild Wonderful WV"- its slogan, is a misnomer today).
VA has benefitted from being closer to DC (SW VA is little different from WV in some aspects). But VA has had better planning and thought about development, and it's more attractive to live there.
There are many factors influencing economic development. I see this in Okanogan County, WA (a county the size of Connecticut with 40,000 people). The Methow Valley sells its natural beauty and recreation, attracting year-round benefits. While, meth and opiods impact towns to the east like Omak and Okanogan.
47
I suspect that the prime element in the divergent economic paths of the 2 counties is that one needs to drive through Loudon to get toe Jefferson from DC. And it is a very hilly drive at that. Loudon is in the DC milieu, and can attract the best from both sides.
And Loudon is closer to the I-95 corridor. Jefferson probably provided lumber and other resources as efficiently as it could, which dampened the urgency of developing new technologies.
The article appears to be only that the there are amazing economic divides over short distances. But actually diving into some details as to the offered example would be welcome.
13
It's not just location, it is time, natural processes, human health, weather, climate --- all substantial economic factors that economics appears to completely ignore in modeling the supply and demand for all kinds of resources. That means important constraints to resource distribution are not accurately or realistically understood by economics. In the present example, it boils down to basic regional economic development, which needs to be a more major focus of local and government, imho.
4
Maybe, just maybe the support for Trump in the troubled county is a sign, not that the world has been unfair to them, but that the residents caused the economic distress with their own set of policies and attitudes. If they failed to vote for school funding, are hostile to immigrants, minorities, and outsiders, and reject innovations then they may have chased away businesses perhaps without realizing it.
Young, college educated people flock to areas that welcome them and move from areas that do not support them. Sometimes attitude is everything.
190
I'm not sure why poor people ever vote for Republicans. I grew up with the understanding that unless you're wealthy, there's little reason to vote Republican. I truly believe that racism-powered resentment drives them to vote for people who convinced them that every tough break they've ever caught is some brown or black person's fault, even if there are none living in their communities. Loser is a tough label to wear, but that word is what immediately comes to mind when you blame most of your problems on the people who have historically had the hardest time in this country.
47
Yup, it's their fault
Yep. Proposals can be helpful. But how about Votes ? Didn't
Loudon and Jefferson also vote differently?
In 2016, Hillary won Loudoun by 55%-38% or 17 points, vs Obama's 51.5% vs 47.0% or 4.5-point vote margin in 2012.
In 2016, Trump won Jefferson by 54%-39% or 15 points, vs Romney's 51%-47%, or 4 points.
The two counties only diverged by 8.5 percentage points in 2012, but diverged by 32 points in 2016.
Guess what? That happened all over the country -- much more polarized neighbors and neighborhoods.
This pattern is not an incentive for Democrats to try to gain votes by using ugly talk and extreme behaviors. We'd be smarter to try to see how the people who have missed the economic recovery view our message.
7
It wouldn't hurt to organize community centers that support education (while giving out food, toys, clothing, books, etc.) and job preparation. It wouldn't hurt for Democrats to link up with small industries that might find homes in undeveloped and neglected areas, where labor can be relatively cheap, but even a minimum wage can also be a step up from abject poverty. Berea, KY is a good example of supporting native crafts through community cooperatives. The poorer the community, the more people have skills like quilting, toy-making, instrument-making, cooking, potting, sewing, honey making, canning, etc. that can be exploited through cooperatives, to earn money. These can provide the first step up from abject poverty. Sale of home-made "folk" items can pave the way to better futures, if organized properly. Poverty isn't a choice, nor a sign of inferior intelligence or laziness. Poverty results from being barred from education, and opportunity. This can be fixed. There are plenty of examples, in America. Shame on anyone who blames poverty on the poor! And shame on political parties who don't get involved in community development, creating votes while they redeem lives.
2
Not much need to talk with people captured in "Cult 45". They need to be marginalized so that those of us who pay for their benefits can keep doing so without the Republicans they vote for driving us off the cliff at every opportunity. Like every responsible adult should do with children, we need to take the keys to the car away until they can prove they're responsible enough to get them back, which should be a very long time from now.
10
Another article in today's paper reports GM's threat of shedding jobs as the new tariffs reduce the benefits it enjoys from its off-shored supply chain. That off-shoring is what killed the jobs in Jefferson County (and those in Flint, St. Louis, the Virginia furniture belt, and Camden, N.J.).
Rebuilding the tariff wall that allowed the Industrial Revolution to take place will take time, and there will be disruptions. But filling stores and showrooms with domestically made products is exactly what has created generalized prosperity in Germany and Japan.
And it's the only way we'll ever have it here.
8
"Rebuilding the tariff wall that allowed the Industrial Revolution to take place will take time, and there will be disruptions."
19th century economic policies cannot address 21st century economic realities anymore than you can put a square peg in a round hole.
4
Look at what people make working at Walmart. Pitiful money, barely above minimum wage. And, the only thing that is currently encouraging Walmart to raise wages is the prospect that food stamp programs are probably soon to be cut. They've reviewed the numbers. They know full well their workers can't survive on their wages without food stamps.
Stuff will cost more with your idea. Unless decent wages are going into the hands of Americans at lower levels of wealth, only the rich will buy our expensive American made goods.
The better idea has always been to let developing countries do the low-level work, and retrain our people to do jobs requiring a higher skill level. Those people who simply don't have the aptitude should still be paid a living wage, not a poverty wage. We're not all born with genius level IQ's, but we still all deserve to live dignified lives.
The Germans and the Japanese can afford German and Japanese goods. They have far less income inequality than us, and far better social programs like education and health care.
6
"from 1940 to 1980 the wage gap between poorer and richer cities in the United States converged at an annual rate of 1.4 percent — but that on average there has been no such convergence since then." What changed in 1980 and since then? Republican macroeconomic policies? It is certainly true in the rural urban divide as well. A core issue nationwide is a lack of opportunity for an equal quality education for every child. When will Republicans and their party supporters start valuing education? Education is not just college but trade schools and apprenticeships (unions used to be the biggest provider but the union busters have succeeded), technical and two year colleges and even public private partnerships at high schools. Alas, Republican policy for the past 35 years seems aimed directly and indirectly at reducing those opportunities and have inflicted the most damage on their own supporters.
62
Can I put myself forward as an example of what education and opportunity can provide. As the son of a carpenter I got good schooling in Scotland. I became an engineering apprentice and studied at free night school to qualify as a member of both the Institution of Mechanical Engineers and the Institution of Electrical Engineers. After a varied and interesting career I retired from the important post of engineering adviser to the the National Gallery in London.
9
I'm sure this phenomenon occurs at in other geographic comparisons as well. I fear Trump's ham-handed policies will only make the situation worse, since he doesn't understand economics or the value of free trade. And most of his advisors (those who are left, anyway) only take a macro view of what goes on in this country, with no concern for the effect of their policies.
6
Dulles Airport is in Loudoun County. The bulk of its population surely lives in that eastern area, which is nothing more than suburban DC. That almost surely accounts for the difference in the economic trajectories of the two counties, with no need to beg for fancier explanations.
A more interesting comparison is that of New Hampshire and Rhode Island. Several generations ago both were manufacturing states. Both are roughly equidistant from Boston (the large mass of New Hampshire lying in and north of the White Mountains is quite thinly populated; most of the state's population lives in the flatter land near the Massachusetts border). New Hampshire has done much better since. Is their tax policy the reason? Or are there other factors at work?
Another interesting comparison is Hawaii and Puerto Rico.Two tropical places acquired by the U.S. in 1898; both were then poor rural. One difference is that Puerto Rico is much closer to the mainland. Hawaii is today affluent, while we all know of Puerto Rico's problems. Is the difference in legal status (statehood vs. commonwealth) important? Is it because historically so much military spending flowed into Hawaii? Is it language? On taxes, Hawaii may be higher (Income earned in Puerto Rico is exempt from U.S. personal and corporate taxes).
26
The income taxes of Puerto Rico are steeply graduated with high income individuals paying high rates. This encourages employers to offer (and employees to seek) prerequisites (housing, cars, school tuition fees) rather than monetary income.
1
Culture may play a role. RI and PR are more Hispanic (and Italian and other Catholics). HI and NH are mixed Japan/other East/native/military and just plain ole white.
If you think about it, the 30 year mortgage is one of the most disruptive forces in preventing economic mobility. It forces people to stay in communities that aren’t prosperous as it binds them to homes when it might be better for people to move.
Instead of giving a tax credit for mortgage interest, how about giving renters a tax credit of up to $5,000 per year?
37
One thing missing from this analysis is the differences between Virginia and West Virginia in so-called business friendly laws and regulations.
Virginia enjoys a certain convenience that West Virginia does not: anyone living in Virginia, Maryland, or the District of Columbia and working in one of the other two, pays state income taxes only in their state of residence. This especially helps Virginia because it has a lower tax rate than the other two.
But, back to regulations, Virginia has long been noted as a place very unfriendly to working people. Labor laws are weak and enforcement lacks from little effort from the state. This makes Virginia VERY attractive to businesses but at the expense of the working people.
To address this specific problem, perhaps West Virginia should be integrated into the state income tax system that Virginia shares with Maryland and the District of Columbia. That would allow Jefferson County residents to easily seek jobs in Loudoun County. This would also help the other West Virginia counties that border on Virginia.
(I know about these issues because, for several years, I lived on Maryland and worked in Virginia.)
2
People can't "seek jobs" if they don't have the education and skills to perform in the modern economy. Before we seek jobs, let's make sure everyone is well nourished, educated in literacy and skills necessary for "job seekers". Let's have community organization to support education and skill acquisition. Let's have educational opportunity, so kids have access to high-performing middle and high schools, and community colleges or trade schools. Let's make sure that money is available to attract excellent educators, community development, etc. Without these things, you're not going to get rural, small town, ill educated and prepared people, finding jobs in more affluent places.
8
Looking for new places to visit in China we've recently traveled to Tibet and and just got back from Gansu (northwest at start of silk road). The striking thing about these places is that even in the more rural and out of the way areas, Chinese infrastructure is well maintained with dams, and wind and solar farms stretching as far as you can see. Houses are solidly built and people seem prosperous under a government that has chosen to invest across the country to improve people's lives rather than leaving the decision to an invisible hand. The contrast with West Virginia is humbling and unnerving.
106
With centralized and nondemocratic decision making, integrated planning is possible at national-state-local levels. With the USA's federalized model of governance, not so much, but overall we have more freedom. It's a trade off clearly.
6
M, Seriously? China is notorious for shoddy infrastructure that is built too fast and built poorly. Google for news items about it, etc. The USA is fumbling terribly at infrastructure like bridges and roads but geez China is the worst large country to compare that with. Your better bet is Norway or Germany. Everything is immaculate and carefully planned.
3
I've been to China several times the pollution is unbelievable there are sharp differences between rich and poor and it's all based on Stolen intellectual property.
This essay suggests that we shift our focus from 'us' to 'we'. With the 2020 census looming, our communities might well broaden our perspectives. I live in a suburban area of about 40 communities that have struggled to define themselves, especially as we live near and realize the impact of the muscular economic engine known as Chicago. In the 40 years we have lived here, we have seen the transition from corn field to concrete and back again as we face a rapid disinvestment. As the author/poet Robert Fulgham noted:when you go out into the world, watch out for traffic, hold hands and stick together.
8
Your idea that location plays a significant part in the economic health of an area is right, but US statistical areas downplay rural areas, partly because their outlines are determined by counties and partly because they have urban centers.
to get location-specific economic data, you need at least three kinds of statistical areas--rural, suburban and urban, classified on some population per unit area (square kilometer?) basis; and you need complete coverage of the country. Inevitably, the three kinds of areas will overlap and double count people. For example, Combined Statistical Areas are combinations of related Metropolitan Statistical Areas and Micropolitan Statistical Areas, which are themselves combinations of smaller demographic areas.
The existing statistical areas are not good enough, but defining appropriate statistical areas will be hard.
7
With all the conjecture "would it be better to help people stay, or to help them go?" , I wonder what "people" want. Are candidates for office, local and national, asking the citizens for their ideas?
8
I would hazard a guess that "the people" want jobs to come to them so they don't have to move. Moving is hard and uncomfortable on a lot of different levels, and humans, in general, do not like discomfort.
In general, I think that the people know that change is happening, and at an uncomfortable, accelerating pace. If the people are suggesting anything to their politicians, it is what they know, understand, and already have so that they do not lose their current status. Think incrementalism. The challenge in many areas is that incrementalism doesn't always work.
6
I think we’re coming to realize that people of lower income levels depend on family/social networks more than those pulling in higher wages, and can’t move for jobs in their wage range b/c they can’t get by their networks for help with child/elder care. That’s been a problem with a great enthusiasm for globalization.
8
Most of the people who want to go have gone.
It's worth repeating: most of the people who want to go have gone.
And they tend to be the younger, more striving, more adaptable.
Those who stayed want jobs to come to them. They care not about economics, business, productivity, technology, supply chains, you-name-it. They have it tough, no doubt about it. But "bring coal back" ain't gonna help them. Lots of them are just plain lost. The question coming from this column is, who can do what for them without just wasting the money and the effort?
15
The notion of a county needs to be re-defined, based not on the agrarian mentality (or early political boundaries), rather based on the metro-centricness of economic demography.
If a political economic region is defined relative to its metro hub, then property taxes and business taxes collected by the regional government can be more appropriate to the geography of the region, and be more easily applied to developing margins for affordable houseing, infrastructure, community college job [re]training, excellent K-12 education, etc.
But this implies major redrawing of political boundaries.
Globally, the notion of a nation is being annulled by the organization of the world into metropolitan centers with smaller meto satellites. Look at an image of the Earth at night: You see the greater to lesser constellational nature of regional demography.
In an important sense Boston is “closer” to New York than a small city or county 50 miles from New York. The state of Chicago is closer to the state of St. Louis than Springfield, IL is to Chicago. An economic region is centripetally, demographically defined, not defined by clasical political boundaries.
Regional development must be oriented to working outward from metopolitan centers in governmental structures that cross classical agrarian boundaries. Unfortuntely, it’s a Constitutional issue.
Even the notion of national states is becoming outdated. Political geography is being antiquated by metropolitan evolution.
8
On the other hand, if economic development were able to create more disteibuted economic regions, without such concentration in large metropoli, but also promoted growth and investment in peripheral regions, that would seem to improve the lot of the rural areas.
2
While the divides can be seen as geographic, the most serious divides are in education and skills. All around the globe the story is pretty clear. High education and skills create areas of prosperity while areas of low education and skills are not prosperous.
Yes, America and both political parties need to address the root-causes of our problems - in this case pockets where education and skills aren't consistent with the way the world is moving. Unfortunately, both parties have either ignored or manipulated the pockets of less prosperity.
We may need federal/state job creation that contains skill development and education for the next generation. We also have to stop manipulation of people just to achieve a political agenda.
Both parties made and allowed this to happen now it is time to fix the root-causes of these problems. These areas and people are our fellow citizens and their government owes them more that lip-service and manipulation. That we have these pockets in this nation still points to the failure of government while trying to satisfy the agenda of ultra-wealthy campaign funders.
19
While the gap in education and skills is there, this article specifically addressed opportunities for people without a college education.
5
No one is owed anything in a free country. When you place a floor in the economy, you effectively create a ceiling as well. That will eventually eliminate the motivation to excel and innovate.
2
Why? Why do you think that? I have never understood this sort of statement.
A ‘floor’ will give people a foundation to build on. In fact it may even inspire them to take risks since they know they will have a floor.
And the people who aspire for ‘more’ will work for it. People like Elon Musk will build great things even if they have a floor.
6
The author says that in Loudon County the number of businesses rose 49% from 2005 to 2015 while in Jefferson County the number of businesses fell 11%. Interesting (especially to a statistics chaser like myself) but what do they mean? What might they mean?
If we are trying to understand the prosperity or standard of living economic goodnesss and the change in these things we need to measure these things not growth or decline in the number of businesses.
What were average and median employment rates; how did they change? What were average and median wages; how did they change. What were average and median cost of living; how did they change. What were the outflows and inflows of persons...
I think that counting the change in the number of businesses in a county is modestly interesting, maybe as interesting as the number of times the bobber on a fishing line goes up and down, but it doesn't really tell us how well off the people are. Isn't that the objective of the economy, to make people well off?
9
I would add that this phenomena of regional divergence is not limited to the US but is happened globally as more of the world moves to cities. There are core cities and their surrounding areas around the world that are leading growth in their countries where as many of the other regions fall behind.
Current technologies favor the clustering of economic activity even more than before.
8
Irwin asks: "Would it be better, for example, to help people stay, or to help them go? Invest in transportation infrastructure or better schools, or ease relocation to more dynamic places?"
Investment of public funds has always helped places thrive, so yes, let's have federal and state government invest in areas that have fallen behind economically. Build them the transportation networks (not just roads, but mass transport systems) that allow people to get to work conveniently and cheaply, and to move between these less affluent places and their thriving neighbors. Make it easier for people to work in thriving areas even while living in areas that are not as affluent.
But let's recognize that much of the problem in areas lagging behind is that, because they don't have a strong tax base, they have starved their school systems and the cultural institutions which make for productive and pleasurable lives. Many people turn down transfers to places which lag because they fear their children will not get a good education and that they will miss the cultural amenities -- art, music, public parks -- that economically wealthier areas support.
Finally -- shifts in cultural and political attitudes are critical. Areas which have traditionally refused to spend on improving education or supporting a decent mass transportation system aren't going to see growth unless they have the political will to change.
11
Population density matters. You can't have a mass transportation system in semi-rural areas.
14
If the BLS statistics are to be believed Jefferson county WV has lost jobs since Trump took office, yet I would be willing to bet his support now is even higher than when he was elected.
138
"Elisa Giannone, a Princeton economist, found in a recent working paper that from 1940 to 1980 the wage gap between poorer and richer cities in the United States converged at an annual rate of 1.4 percent — but that on average there has been no such convergence since then."
In the not too distant past the minimum wage paid for housing, food, education and there was still money left to enjoy life. Now the minimum wage no longer keeps up with inflation. Union power is so decreased and membership levels are so low that unions can no longer force non-union employers to pay decent wages. Employers no longer offer a pension (many have looted their employees’ pensions as a part of unforced bankruptcies…) and they're passing the higher healthcare costs onto their employees.
Historians, economists and sociologists will point to the period from 1945 to 1979 as being the high water mark of the American middle and working classes as well as being an aberration in America’s social and economic history. Unions were strong, work was plentiful and well paid, and people moved in droves to the cities.
Then, in 1980 the US elected a president who would make eviscerating unions politically and socially acceptable and who would unabashedly appeal to the baser sentiments of those most impacted by his policies.
175
The minimum wage never paid enough to support an entire family including housing, food, education plus discretionary spending.
9
Perhaps what is needed is more than economic forecasts and predictions. Why not create a working group that includes social scientists, local historians and futurists along with the econs? for instance, what is the impact of different choices by local and state governments in statnation? no dollars for schools, infrastructure ignored; money for growth and added business going to the 'in crowd' rather than new and untried concepts. What in the history and social constructs of local entices them to stay at home even as jobs and public services wane? Are "the ties that bind" stronger than the need for a better standard of living.
It's not always all about the money, even when sometimes it should be, and if the pros don't have insight into what makes people tick, the rest is speculation.
7
It is quite possible that the main point has been missed, that being the world-wide lack of employment. There are one billion, five hundred million people without regular employment. That's right, 1,500,000,000. There aren't enough jobs. Period.
I own a business, and the most critical thing is demand. If there is plenty of demand, I'll produce more, etc. Demand has been weak of late. So I'll cut back. The people in W.Va. are probably going to remain unemployed for a long time. No demand for their services. Not enough jobs. Maybe we need work programs, or guaranteed income, or something. There are too many of them, and I think it's getting worse. We have been trying to fix W.Va. since both Kennedys- JFK and RFK ran there. 68 years. Any signs of progress? I think we've decided to cut our losses. They, Congress, The President, just haven't told anyone.
92
Real tough for the Democratic party to respond to this. Suppose it were to advance measures to help the recent victims of these forces -- largely white working men, as the article says, who tend to harbor animosity to women and minorities, which it does not.
First thing, a good many of the victims of much more profound, more entrenched historical forces such as residential redlining would rise up to say, hey, what about channeling investment and inspiring hope in my community?
We saw this come into play once already. The need for spending to relieve the crisis of 2008 could have been met far faster and more effectively by the immediate federal hiring of workers for infrastructure projects. But the Obama administration (wisely imho) knew these workers would largely be WWC, and foresaw the inevitable reaction from other parts of the Democratic constituency.
A huge political problem: how to convince all workers they have a lot more in common than they don't. An answer arose 100 years ago, and the results were not pretty.
10
Robert, I did not see any reference in the story to "white working men". And where in the world did you get your information to allege that white working men "tend to harbor animosity to women and minorities"??? How can you even begin to try and convince anyone of your viewpoint, when you spout out completely fabricated information like that? I would wager my life savings that a scientific poll would reveal the vast majority of we "WWM's" love and adore the women in our lives, respect all women, and harbor no animosity toward other races.
I do not understand the war on white men that you and so many on the left have instigated. But propagating false and negative characterizations of a huge portion of our citizenry is not good for ANYONE. It is a shame, because some otherwise meaningful dialogue that might have taken place, based on your potentially valid points, is lost from the start. Please rethink your biases, and consider leaving them out of future attempts at conversation. Thanks.
14
Thank you laying out the issue without resorting to inflamed rhetoric. I wonder though whether the Obama administration was wise to avoid broadening its coalition to include White Americans who are at the lower end of the income spectrum. As you point out, that would have been perceived as taking away resources from other Democratic Party constituencies who would have fought the move. But ignoring - in fact, actively disparaging - lower-income White Americans drove them to Trump. And the fight over which demographic group has the first claim on the Democratic Party's policies has occurred anyway. The same constituencies that would have resisted a more centrist move prior to 2016 are resisting it now as well, perhaps even more vociferously. Witness the DiBlasio administration's proposal on the beacon schools in NYC, which is pitting Asians against Blacks and Latinos. Moves like this will likely cause some shift of the allegiance of affluent Whites and Asians to the Republican Party. Whether other historically important Democratic Party groups will be sufficiently energized to offset that loss remains to be seen. In either case, the Democratic Party is likely going to surge more left for the foreseeable future.
15
No mystery here. The photo shows Raytheon a large "defense" contractor;the US does military spending worldwide. How does promoting small business in another area have anything to do with this? Low income people can't be expected to move to areas where real estate investors have made it too expensive to live in for anyone but high income people.
21
Where does the issue of home ownership and lagging values/inability to sell a family home come into play? Homeowners unable to sell, and whose homes are their single largest asset, may be reluctant or unable to move. Ideas?
22
Sometimes people get lucky and have their house gain in value, but houses should be seen has housing, not good investments guaranteed to grow.
4
Raytheon is chosen as a visual symbol of prosperity? Gee, I couldn't imagine that dumping pallets of Federal government money into a local economy would lead to prosperity. Weaponized Keynesianism works, it appears.
18
The Republican party is going to block all government solutions to problems such as those described here because their ideology is a far-right branching off from Reagan's pernicious "government is the problem." When he said that, the G.O.P. was still interested in government policy solutions. The E.P.A. was created under Nixon, for example. No more. They want government to be non-functional so that people losing out stay angry and remain uneducated know-nothing voters against their own interests. Why would anyone not rich vote for a Republican who will destroy their unions and give tax breaks to the rich? Go back to West Virginia and ask them how it's working out.
117
Leadership is identifying and meeting the needs of people. Democrats who identify and meet the needs of the individuals and families in struggling counties, no matter the political party of those folks.... will win.
17
West Virginia's best kept economic success reinforces the deflections of economic messaging: using old paradigms of rich and poor--rather than new paradigms of templates for success. But wealth demands a tightly controlled media (per Lewis Powell’s famous 1971 memo), denied but evident in status quo reporting!
The West Virginia Chemical Alliance Zone, a 5 county region in the heart of the state leads the US in polymer and related exports--over a billion dollars a year. It is home to top 5 US and foreign chemical manufacturers, has generated 100s of ancillary businesses, from medical devices to building products, and generated over 15,000 jobs paying above $70,000 annually. Its spectacular success is met with silence! (Coal is woe.)
The Alliance's success is built on development's template for best practices:
1. Infrastructure in housing, transportation, public services (talk to anybody who has landed a site contract, community infrastructure is vital);
2. Business clusters, infrastructure, supply chains, and training (synergies from knowledge institutes, suppliers, warehouses and shipping routes being close);
3. Financing and regulation (West Virginia grants tax breaks, but mandated matched amounts go into research),
4. Economies of scale (a powerful tool of global relations Trump overlooks that China engages).
More: West Virginia and China have signed a memorandum of understanding to develop natural gas businesses worth more than WV's GDP!
22
Important observations - difficult top down solutions and ideas.
However, there are stories of success for rural or former industrial areas.
An important factor that needs analysis is the level of effort by local and state, private and public players looking forward and taking action. To what extent do the leadership in these areas actually tackle the challenge? Do they think the solutions are only from the 'marketplace' or from the federal government?
Quality leadership, willing to work on hard problems is critical to long-term economic success.
5
Because I live in Fairfax County, next to Loudoun County, it is no mystery to me why Loudoun County has done well. Starting in the 1940s and 1950s, a few residents of Fairfax County, most notably Til Hazel, watched change as a youth and saw that while change is inevitable, its course can be influenced. This influence can seek to enable (1) many people to gain (2) just a few people to enrich themselves and a small circle of family and associates. Til Hazel and his co-conspirators set out to help themselves by advancing the greater good in many ways (e.g., development of George Mason University as a source of people with technical and management skills). My family also lived in Youngstown, Ohio, and has passed down through family stores how Youngstown's corporations and government sought to invest as little as possible believing or hoping that the world would stay the same. Members of my family saw the coming troubles and left Youngstown in the 1920s and 30s. The answer seems to be that we need to simultaneously make it easier for (1) people to leave economically depressed areas and (2) would-be leaders who understand what needs to be done to lead in these areas. Playing with taxes seems irrelevant when compared to leadership and determination.
24
It would be good to have more information on the VA/WV counties. Since they share a border, why are WV residents shut out of jobs created by the thriving adjacent county? Are the schools worse in WV so that residents don't have the required skills/education? Is there no public transportation to get them to these new jobs? Are there more health issues in the WV county that prevents people from working?
4
Skills and attitude. Attitude being the biggest problem. They want physical iron red state jobs to come back, and they won't. They see learning as 'elitist' and learning is critical. Folks in rural areas didn't used to act this way,but they do now. I know Jefferson County well, and spent much of my teenage time there. Same with Loudoun. Skills matter. It doesn;t mean you can't live a more simple life.
71
I would bet you answered your own question; lack of public transportation, which, IMHO, is a major factor for the economic lag between rural and urban America.
6
Because the West Virginia County is remote, while the eastern half of the Virginia County is close to DC. There is no other reason.
2
Ouch! Aaarrggh!! The Undead rise again.
Since World War II -- that is, about six or seven decades; maybe three generations -- the US and the world as a whole has seen a gazillion attempts to fix poorer regions -- be they parts of cities, parts of states, Appalachia, southern Italy, northeastern Brazil, or now maybe Jefferson County VA.
THEY ALMOST NEVER WORK.
These programs never cease to arise because our politics are rooted in places. The Congress does not have representatives from, say, a certain income level or a certain profession, but rather from a certain county or group of counties. So the multi-decade, otherwise undistinguished Representative Daniel J. Flood gets a Veterans Administration hospital for Wilkes Barre PA, and Senator John Stennis gets navy bases galore for Mississippi.
Help the people, not the places. It's not a perfect strategy but it's way better than trying to resuscitate the places that, for the most part, are poor for good reasons.
11
About 2/3 of the Counties voted for Mr. Trump. Yet they represent only 1/3 of US GDP. The 1/3 voting for Ms. Clinton account for 2/3 of GDP. Aside from the symmetry what are we to make of this? The most obvious, to me, is the wasted potential and political dysfunction. As Mr. Irwin shows, there is no lack of ideas as to what to do. Somehow we must find the will.
21
Just because you live in a city with many high GDP producers, does not make you one. NY City, via continual stories in NY Times, shows the wide disparities. I would expect most of the Hillary Clinton supporters in high GDP cities do not look much different in occupation future than the areas for which you have disdain.