The "Eastern Heartland", regional economy in U.S.

Discussion in 'Economics & Trade' started by kazenatsu, Dec 13, 2022.

  1. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    In my opinion this is one of those really interesting high-quality articles you only come across once in a while. The article is about the region of the U.S. known as the "Rust Belt".
    The article draws a distinction between the eastern and western heartland regions, both of which lie between the two coastal regions.

    The author writes that the split between "east" and "west" can be conveniently defined as whether that state officially existed before the year 1840.

    There is a band of economic problems and "decay" in America's eastern heartland, running from the Mississippi Delta, Appalachia, and the Rust Belt.
    This economic dysfunction can be measured by such indicators as rising male mortality, the opioid crisis, and social-welfare dependence.

    Industries that once existed in the eastern heartland have left and been gone for decades. Some of that manufacturing has since relocated to the better-educated, more business friendly western heartland.

    The article highlights the problem of long-term joblessness in the eastern heartland, a dire social problem.

    The article points out something interesting. The rate of migration between different states has decreased in recent decades. In older times the poor were moving to places with higher wages. But in modern times, there is not as much demand for low skilled labor. And due to rising housing costs in the areas that do have higher wages, poorer workers cannot afford to relocate across country and move there.

    "America was then a country of migrants. African-Americans fled the Jim Crow South to northern cities of opportunity. Urbanites left behind their crowded apartments and embraced car-based living in the suburbs and exurbs. Industrial capital and Rust Belt capital moved to the warmer, more pro-business Sun Belt."
    The author writes that part of this migration was enabled by ample availability of living space.

    "New York permitted 100,000 units annually in the early 1920s. After World War II, mass suburbanization made abundant land available, and a white exodus freed up urban space for African-Americans coming north."

    "Since 2008, the cross-county migration rate has never risen above 3.9 percent, less than two-thirds of the pre-1992 minimum migration rate. Economists Peter Ganong and Daniel Shoag have found that while migration flowed strongly to high-wage areas between 1940 and 1960, that process stopped in 1980. Only the very skilled still move in large numbers to high-wage, high-cost areas. Contrast that to between 1950 and 1992, when more than 6 percent of Americans moved across counties every year."

    "After World War II, capital and managers, like the fictional industrialist whose murder motivates the classic 1967 film In the Heat of the Night, moved south to take advantage of low-cost, nonunionized Southern labor. Industry increasingly moved from pro-union to right-to-work states after 1947."
    The author writes that "cheap, unskilled labor has little appeal in our automated age".

    "Throughout the 1950s and 1960s, 95 percent of men between 25 and 54 were regularly employed. Since 1970, the share of non-employed men has risen steadily. For much of the past decade, more than 15 percent of these "prime-aged" men have been jobless.
    Male joblessness is highest in the eastern heartland, starting in Louisiana and Mississippi and running up through Appalachia into Ohio and Michigan."

    "While overall GDP has grown at a roughly equal rate for the coasts and the western heartland, the two regions have experienced success in different ways. Per-capita income growth has been higher on the coasts, and incomes are now much higher in coastal America than in the other two regions. But the growth in the working-age population has been much faster in the western heartland than in the other two regions. This dichotomy should be familiar. When Texas succeeds, its economy provides moderate prosperity to many. When Silicon Valley succeeds, its economy provides extreme prosperity to a few. By either measure, though, the eastern heartland has fallen behind."

    "Perhaps the most disturbing gap between the regions is in mortality. In 1970, the eastern heartland had the highest mortality rate and the western heartland the lowest. Until the early 1980s, the three regions moved in parallel, and then AIDS pushed mortality on the coasts upward. By the 1990s, mortality on the coasts was falling again and is now compatible with mortality in the western heartland. But the eastern heartland’s mortality rate is much higher than both, and slightly higher than it was in the mid-1980s. Rising death rates could reflect economic hopelessness, as Case and Deaton suggest. They certainly represent another indication of the misery that so often accompanies joblessness."
    The article also points out that the eastern heartland has higher levels of corruption than other states, singling out Mississippi, Louisiana, Illinois, Kentucky, and Tennessee.

    The article shows a map. In California, Oregon, and Washington - all states on the West Coast, the jobless rates for men were between 14 to 18 percent, as of 2017. In New York state and most of "the South", the rate was above 18 percent. Also between 14 to 18 percent in Illinois, Michigan, and Missouri.

    Mission: Revive the Rust Belt: We should subsidize employment, not joblessness, and target efforts where they are most needed. | City Journal (city-journal.org), Edward L. Glaeser, Autumn 2018

    Do you know what my personal take on this is? Of course the coastal areas are going to be richer. But the reason for the difference between the eastern and western heartlands, I think, is that the eastern heartlands were settled much earlier, and so have progressed further into "decay". In other words, the same fate that now befalls the eastern heartlands will eventually befall the western heartlands. Local state government keeps passing more regulations that impinge on the ease of economic activity, while meanwhile wealth and development eventually attract a lower level demographic element, who may not have existed in that area before.

    The article points out that cities like New York and Boston, being older, should be subject of plenty of "decay" too, but theorizes that these cities, being on the coast, hold other advantages that allow them to overcome the effects of that decay.

    I don't agree with all of the opinions in the long article, but it does examine many trade-offs.
    I think it is important to understand the differences between different regions in the U.S.

    The most important states in the "Eastern Heartland" are the upstate part of New York, Ohio, Illinois (in large part with the exception of Chicago), Michigan, and the big city areas of Missouri, but also Pennsylvania is part of this, and even the area around Baltimore in Maryland is considered part of the Rust Belt and could maybe half be included in this.

    You can see a map of the "Rust Belt" here: Where Is the Rust Belt? - Belt Magazine
     
    Last edited: Dec 13, 2022

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