Current and Future Job Growth Will Be In Cities

The Daily Escape:

Breezewood, PA – 2008 photo by Edward Burtynsky. Each year, 3.5 million passenger vehicles and 1.5 million trucks drive the half-mile Breezewood strip on Route 30. That’s because a law in the 1950s prohibited spending federal funds to connect a free road to a toll road. So, highway planners designed an interchange that routes drivers onto Route 30 for a half-mile.

An interesting article from Market Watch shows how nearly all job growth is in big cities, while rural America is being left behind:

“Since the economy began adding jobs after the Great Recession nine years ago, about 21.5 million jobs have been created in the United States, the second-best stretch of hiring in the nation’s history, second only to the 1990s. But….Most of the new jobs have been located in a just a few dozen large and dynamic cities, leaving slower-growing cities, small towns and rural areas — where about half of Americans live — far behind.”

MarketWatch cites a July 2019 study by McKinsey forecasting that 25 cities that are home to about 30% of Americans will capture about 60% of the job growth between 2017 and 2030, just as they did between 2007 and 2017. In typical McKinsey fashion, they break cities and towns into many categories. Please read the report for full details. Here are their top-line findings about where the largest growth is happening:

  • Twelve mega-cities (and their extended suburbs) top the list: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, Phoenix, San Francisco and Washington.
  • Another 13 are high-growth hubs in or around smaller cities: Austin, Charlotte, Denver, Las Vegas, Minneapolis, Nashville, Orlando, Portland (Ore.), Raleigh, San Antonio, San Jose, Seattle, and Tampa.
  • Smaller, fast-growing cities and a few privileged rural counties will also add jobs, while vast swaths of the South, Midwest and Plains will lose jobs.
  • The New York metro area, home to 20 million people, added more jobs over the past year than did all of America’s small towns and rural areas, with a population of 46 million people, combined.

McKinsey’s forecast reinforces concerns about persistent economic inequality in America. Inclusive growth is a must, or it is likely that our society will fall apart. The problem: No one, and certainly not Republicans, have a magic wand that will bring back jobs to rural and small-town America.

Anyone who’s been paying attention knows that job growth is mostly occurring in places that vote for Democrats, while the stagnation is mostly in places that vote for Republicans. In 2016, Trump was smart to tailor a pitch to those parts of America, but their situations haven’t improved since his election.

And the divide is getting larger. Over the past year, only 12% of 389 metro areas had any significant job growth, according to an analysis of Bureau of Labor Statistics data by Aaron Sojourner, a former White House economist, now an associate professor at the University of Minnesota:

So, after 17 years of significant and broadly-spread growth, fewer towns and cities are now doing so well. And, of the 47 metros that gained significant numbers of jobs over the past year, 21 were on McKinsey’s top 25 list.

Meanwhile, the regional jobs data from the BLS shows that non-metropolitan areas, which account for 18% of jobs, had just 5% of job growth over the past year.

OTOH, income inequality is greatest in those cities with the highest jobs growth. But, we can’t write off one quarter of the US population simply because they live in low-growth areas. And politically, it’s essential. Rural America is overrepresented politically — we can’t ignore them.

But, what to do? Sanders and Warren have addressed this by trying to raise tax revenues from corporations, and funding free college. They along with others, believe in some form of Medicare-for-all, which could help address the fact that rural America is older, sicker, and poorer than ever before.

Yang proposes a universal basic income of $1,000/month for everyone.

Trump proposes tax cuts for the wealthy, tariffs and weakened environmental regulations, but despite all three, the situation has gotten worse since his election.

McKinsey suggests that communities that are being left behind ought to try almost everything: improved transportation to get residents to jobs, rural broadband, and lifelong job training.

Building consensus about how to address job growth and income inequality is the key to America’s future. This is what the 2020 presidential election should be about.

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Can America Learn From France’s Yellow Vest Movement?

The Daily Escape:

Turtlehead Pond, Groton State Forest, VT – October 2018 photo by mattmacphersonphoto

The Yellow Vests have thrown France into turmoil with their protests in recent weeks. They say they want lower taxes, higher salaries, freedom from gnawing financial fear, and a better life.

It’s a uniquely French phenomenon. Every automobile in France is supposed to be equipped with a yellow vest, so that in case of car accident or breakdown, the driver can put it on to ensure visibility and avoid getting run over.

That enabled the wearing of a yellow vest to demonstrate against unpopular government measures to catch on quickly. Most people had one. The symbolism was fitting: in case of an income inequality emergency, show people that you don’t want to be run over.

What set off the protests was a rise in gasoline taxes. But it became immediately clear that much more was driving the protests, that the gasoline tax was the last straw in a long series of measures favoring the rich at the expense of the majority of the population.

That’s why the movement achieved almost instant popularity and support.

The Yellow Vests held their first demonstrations on Saturday, November 17 on the Champs-Elysées in Paris. Most French trade union demonstrations are well organized. People carry banners and listen to speeches from leaders at the end. But, the Yellow Vests showed up without any organization, and no leaders to tell them where to go, or to speak for the crowd’s demands.

They were just there in yellow vests, angry and ready to explain their anger to any listener. Their message was:

We can’t make ends meet. The cost of living keeps going up, and our incomes keep going down. We just can’t take it anymore. The government must stop what it’s doing and change course.

This is another example that income disparity between the rich and rest of us is out of control on a global basis.

The Yellow Vest protesters know that our political systems are controlled by the rich, and by their captured politicians. They are enriching themselves on the backs of the working and middle classes. Interestingly, it was the French economist, Thomas Piketty, who has researched and publicized the fact that the US has the largest income gap of any Western nation.

We should be paying closer attention both to Piketty and the Yellow Vests.

Global corporations and their fellow traveler politicians know that this sort of discontent is infectious, so politicians always try to quell it quickly. If the American 90% got the idea from France, revolution might migrate, as our revolution in 1776 migrated to France in 1789.

It is interesting that the NYT reports that in France, the Yellow Vest protests were totally unanticipated by the government.

We all know that income inequality is a growing global problem, so how can it be that the suffering of a country’s citizens and their protest against the French government’s plan to increase gas taxes would be “totally unanticipated by the parties’’?  Are the powers that be in France completely tone-deaf to the needs of their constituents?

So, are there lessons for America in the Yellow Vest movement? There should be, because the issue here is similar to the issue in France, and elsewhere in Europe. That issue is economic insecurity.

There’s no political will to deal with job insecurity. There’s no mechanism in place for those who can’t pay their bills. Soon, given automation and AI, there will not be enough work available for everyone to support themselves and their families. Underemployed people will still need food, shelter, and health care, so they might start by demonstrating in order to get them.

The sooner our corporate and political leaders decide to work on these problems, the better we all will sleep at night. But, no one in the top 10% of our economic strata has any idea what it is like to go without the necessities; it is simply inconceivable to them.

Many think that there are no consequences to the inequality that has developed in America since 1980, but there certainly will be consequences. We are in the midst of economic class warfare. The politicians, bought by the corporate plutocrats, are pushing their corporatist agenda down the throats of the middle and working classes.

We can either engage in a slow reform of Capitalism, or we can wait another generation, and participate in an urgent, rapid destruction of Capitalism as we know it today.

If we opt to go slow, let’s not kid ourselves. You don’t close a deep wound with a Band-Aid. It takes surgery.

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Distressed Communities: Another Divide In America

The Daily Escape:

“Impressions of Lijiang” Show, Yunnan Province China. Lijiang Impressions is a cultural show about the traditions and lifestyles of the minorities in Lijiang. The open-air stage is at 10,000 ft. above sea level. The Dragon Snow Mountains behind the stage are higher than 16,000 ft.

The Economic Innovation Group (EIG) has an interesting report on Distressed Communities in the US. They have surveyed changes in counties in distress, from 2000-2015, using census data. The study notes:

America’s elite zip codes are home to a spectacular degree of growth and prosperity. However, millions of Americans are stuck in places where what little economic stability exists, is quickly eroding beneath their feet.

The study found that the majority of new jobs created as the recovery began came in the 20% of American ZIP codes that were already the most prosperous. The 20% of ZIP codes in the least prosperous areas generated just 1% of jobs created between 2011 and 2015.

This isn’t a Republican or Democratic problem. Both parties represent distressed areas. But the economic fortunes of the haves and have-nots have widened the political chasm between them, and it has yet to be addressed by substantial policy proposals on either side of the aisle.

The EIG study captured 99% of the US population. It covers 26,000+ US zip codes that have a population of at least 500 people, the more than 3,000 counties with at least 500 people, and the nearly 800 cities with at least 50,000 people.

Here is a map from the study showing areas of economic advance and retreat:

Our most significant modern recession and the subsequent deeply uneven recovery has exacerbated the gap between wealthy communities and poorer areas, creating a patchwork map of economic haves and have-nots around the country.

Here is another map from the study, showing the most disadvantaged small and mid-sized cities:

 

In Hartford, CT; Newark, NJ; Stockton, CA; and Trenton, NJ, more than one in five residents are now foreign-born. In general, cities with smaller foreign-born populations are more likely to be distressed: In the average distressed city, 15% of the population is foreign-born; in all other quintiles, the average is between 18 and 19%.

In the Northeast, more than two-thirds of the population living in distressed zip codes reside in high density neighborhoods, so distress in the Northeast is predominantly an urban phenomenon. In the South, nearly 60% of the distressed population resides in low density, mainly rural zip codes.  But, all types of distressed communities can be found in all regions.

A full two-thirds of distressed zip codes contained fewer jobs in 2015 than they did in 2000, while 72% saw more businesses close than open over that same time span. In total, 55% suffered net losses in both categories

Fifty-two million Americans live in the most distressed ZIP codes across the nation. Those people are more likely not to have graduated from high school. The poverty rate in those communities is 11 points higher than the national average. And adults in those communities are twice as likely to be out of work as in the wealthiest counties.

They are also far more likely to live near sites polluted or contaminated enough that the Environmental Protection Agency is working to clean them up. There are nearly 13,000 of these brownfield sites in distressed ZIP codes, compared to 3,700 in the most prosperous ZIP codes.

Those who live in distressed areas have a life expectancy almost five years shorter than those who live in prosperous areas. Rates of cancer, suicide and violence are all markedly higher in the poorest areas, and substance abuse disorders are 64% percent more likely, the report found.

The report concludes by saying:

It is fair to wonder whether a recovery that excludes tens of millions of Americans and thousands of communities deserves to be called a recovery at all.

The days of “pull yourself up by your bootstraps” are gone forever. You can’t use trickle-down economics arguments to fool all of the people all of the time, and you can’t even fool a majority of them for very long.

And now, time’s up.

Capitalism hasn’t worked for all of the people since well, never.

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