The divide in America isn’t just political, it’s economic. Blue states, with their advanced tech sectors, perform well. Most red states lag. But efforts to restore a traditional manufacturing economy are fraught with roadblocks and risks.
“Make America Great Again” was the campaign slogan of President-elect Trump. And whatever messages they read into it, the words resonated with his supporters.
Others would say America never stopped being great. But from an economic standpoint, the superstar states and metropolitan areas are blue.
For example, in its new State Technology and Science Index, a gold-standard measure, the Milken Institute ranks Massachusetts, Colorado, Maryland, California and Washington as leading the nation in innovation. The only red exception among the top states was Utah, No. 8.
At the bottom of the rankings were Louisiana, Kentucky, Mississippi, Arkansas and West Virginia, all red states.
Most Read Business Stories
- Growing produce inside the grocery store? Some QFCs try a new approach WATCH
- Stainless steel, broken glass and buzz, Tesla makes a pickup WATCH
- Netflix goes down
- I found work on an Amazon website. I made 97 cents an hour.
- Decisions on future of Boeing 747 loom as storied factory shuts down
Richard Florida, the urban scholar and author of such books as The Rise of the Creative Class, recently broke down the components that make the difference. Leading states are more educated and have more workers in knowledge, professional and creative sectors. They not only score high in scientific and computer-engineering jobs, but also those in the arts and entertainment. They are more diverse and tolerant.
“Ultimately, the science and technology capabilities of states not only reflect, but underpin America’s underlying economic, political, and cultural divides,” Florida wrote just before the election. “Our most technologically advanced states are bluer, denser, more expensive, more diverse and richer, while those that lag in science and technology are redder, more working class, and falling further behind in the knowledge economy.”
Having an economy based on advanced industries and located at the headwaters of technology matters more than ever. These are the regions more likely to produce good jobs and wages.
The stark blue and red divide also carried over into the broader economy in this election, as reported in a remarkable story last week in Jeff Bezos’ Washington Post. Not only is Hillary Clinton the candidate who won the largest majority of the popular vote but still lost in the Electoral College, but she also won the counties that comprise two-thirds of the U.S. economy.
Jim Tankersley wrote, “But it’s not the case that the counties Clinton won have grown richer at the expense of the rest of the country — they represent about the same share of the economy today as they did in 2000. Instead, it appears that, compared to (Al) Gore, Clinton was much more successful in winning over the most successful counties in a geographically unbalanced economy.”
Now, to put it in Mitt Romney language, America’s maker regions will be governed by its taker hinterland.
This is hardly the way many Trump supporters see it. To them, their economic straits are a direct result of the “elites” in such cities as Seattle.
Even within states, the divisions are striking.
For example, the unemployment rates are exceptionally high in Washington counties carried by Trump, such as Ferry (9.4 percent), Pend Oreille (8 percent) and Grays Harbor (8.5 percent). By contrast, blue King County’s October jobless rate was 3.7 percent.
Changes in environmental policy might bring back some timber and mill jobs, as my colleague Hal Bernton explored last Sunday.
But the reality is that rural America has been losing population and economic power since 1920. Those regions received the biggest federal help, too, starting in the New Deal with agriculture subsidies and massive infrastructure projects.
In the Northwest, a big job killer was not only the decline of timber but also the consolidation of railroads and the massive decrease of railroad employment. Towns that were once division points or crew change and maintenance centers lost these jobs forever.
Bringing back basic factory jobs will be very difficult, not least because so much manufacturing is automated today. In 1980, generating $1 million in manufacturing output took 25 workers. Now it takes about 6.5.
The state’s red counties would also be disproportionately hurt if some of the high-profile Trump and GOP policies are enacted.
Agricultural areas would be strapped for labor if immigrant workers are deported or kept from entering the nation by a wall at the southern border. Residents in red counties tend to be older, so for them privatization of Social Security and Medicare would be risky at best. Many are on various forms of public assistance that would be in the budget crosshairs. Privatization of public lands could take away major tourist draws.
Globalization has undoubtedly hurt millions of Americans. But unwinding it would be difficult and dangerous. Mark Zandi, chief economist of Moody’s Analytics, estimated that as many as 4 million Americans would lose their jobs in a trade war with China and Mexico. An additional 3 million jobs that should have been created would also be a victim.
Trump promised to impose a 45 percent tariff against Chinese imports. An editorial in the Communist Party’s Global Times was not spouting propaganda when it stated, “China will take a tit-for-tat approach then. A batch of Boeing orders will be replaced by Airbus. U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the U.S.”
The blowback would not hurt blue America or red America but the United States of America, with worldwide repercussions.
Pain and anger in the heartland is real. For example, Montgomery County, Ohio, with Dayton as the county seat, had an unemployment rate of 4.9 percent in September, the lowest since the turn of the century. But Dayton has lost all of its headquarters crown jewels, such as NCR and Mead, as well as an airline hub and its General Motors factories.
No one person or “neoliberalism” did this to Dayton or red America. The causes are complex and stem not least from the greed of the billionaires and big corporations that red voters tend to admire.
After Jan. 20, we will be in unprecedented territory. President-elect Trump has promises to keep. None involve helping his red America develop an economy similar to the hated blue enclaves.