Our country is undergoing a crisis of polarization, driven primarily by severe economic anxiety. Technological advances have resulted in a massive dislocation of jobs from a large section of the country. In the 2016 election, many who felt left behind rebelled against the status quo that had led to the geographic and economic stratification of the country in recent decades.
Since it hit its post-War peak in 1979 the US economy has changed dramatically, away from manufacturing and toward more skill intensive forms of labor. With these changes in economic activity have come symbiotic changes in geography, with more of the population moving to and living in major cities. While urbanization has been a trend since the beginning of the 20th century, between 1990 and 2015 about 14% of the country migrated from smaller towns and cities (with a population under 50,000) to urban centers. Manufacturing employment declined even more dramatically—by 10% between 2010 and 2017 alone—resulting in an increase in the unemployment rates for both men and women in smaller communities across the country.
With little to no opportunity at home, many young people are leaving middle America and the Rust Belt for “coastal superstar cities” like New York City, Los Angeles, San Francisco, Seattle, and Boston. These cities and their surrounding areas have all grown wealthier over the last twenty years, while cities, like Detroit, Cincinnati, and Albany, once enriched by manufacturing have almost all gotten poorer. The middle class is shrinking while talent, money, and opportunity crowd into increasingly unaffordable coastal cities.
Though technology is one of the biggest factors that influenced the decline in opportunity across large parts of the country, I believe that technology will also provide the solution by bringing jobs BACK to those regions in the form of full time, remote employment. While many left once prosperous manufacturing centers to be closer to the offices and new job opportunities found in the major employment hubs, the requirement for physical presence in the workplace has eroded. This, combined with the prohibitive cost of expanding or opening new offices in the country’s largest cities, has driven companies such as JPMorgan Chase to open satellite offices in lower cost parts of the country, such as Columbus, Ohio. And with technological advances making it possible for remote teams to collaborate across diverse locations, even satellite offices are no longer necessary.
More and more high-skill employees and executives have been relocating outside the superstar cities to smaller cities and college towns to enjoy increased quality of life, lower levels of stress, and a huge reduction in their cost of living. Realizing the opportunity to draw people to their communities, both Maine and Vermont have begun offering people land and cash, respectively, to relocate there permanently to work remotely. Many states are also looking to further incentivize relocation from high-skill employees as well as startups by offering generous tax incentives, exemptions, or subsidies.
But increased worker mobility is only one piece of the puzzle. There is still a huge gap between employment demands for low skill and high skill labor. While today’s companies are increasingly demanding high-skill labor, areas which have suffered the most from deindustrialization tend to have lower rates of secondary and post-secondary educational achievement than the national average. Solving the educational component of this problem will be a critical component of any plan to revitalize local economies.
Correcting for over 20 years of economic and geographic stratification will not happen overnight. However, there is great hope to be found in the combination of recent technological advances, lifestyle changes in how we work, the desire to avoid the costs of superstar cities, and incentives from local governments to capitalize on the changes technology has brought.