Regional Misery Distribution  

Posted by Big Gav

Early Warning has a look at the legacy of the Bush-Cheney era, with the oil price spike and the real estate boom and bust wreaking havoc across much of the US (with the notable exception of Texas) - Regional Misery Distribution. The ongoing impact of globalisation on the rust belt is pretty obvious too.

Apropos of the latest Archdruid report, I went in search of some data on the geographic distribution of long-term income growth in the US. So far, the most useful thing I found is this Brookings Institute interactive map. It's not exactly what I'm looking for but the above shows the change in median household income 2000-2010 by metropolitan area.

That's a pretty bleak looking map isn't it? There's hardly anywhere in the country that ordinary folks improved their lot over the last decade. Still - some places are worse than others with the midwest and upper south and Florida being hardest hit. Across these areas, median income declined 15-25%: that's a really dramatic change in material standard of living. It's also worth noting that it's even worse than it looks in the sense that the blue circles are on a quite different scale than the red circles. ...

The Archdruid puts the end of progress down to the end of cheap energy. I'm inclined to give a minor role to the end of cheap oil since 2005 (coal is still incredibly cheap) but think that most of the red on the map is due to the effects of globalization on the US industrial regions, and on income inequality generally - globalization benefits the managers and owners of global corporations while hurting ordinary US workers (and benefitting Asian workers). It's also worth noting that the reference year (2000) was the height of the tech bubble.

Where I agree with the Archdruid is that it's rather hard to see how this turns around in the next decade.


Isn't there a valid point to redistributing income away from the US and Europe to Asia?

Globalisation has meant less poverty worldwide and is now coming full circle to the US as Japanese and European car companies invest back into the US because it's cheaper.

This decline in wealth in the US isn't just caused by cheap Asian labour, the US education results have been abysmal for 20 years and hence this income redistribution could reflect the loss of this comparative advantage.

Hi Mark,

I've never said that this argument for globalisation (gradually equalising income across the globe) is a bad thing.

I do find it troublesome that this has never really been debated seriously in western politics - it seems to be have been imposed from the top via both "sides" of politics with little to no public debate or clear explanation that this is what will happen - so it appears rather undemocratic to me.

The other troublesome aspect is that the elites who have made this decision aren't suffering at all themselves - they have prospered from it while first the working class and now the middle class in the developed world are dealing with the impacts on their standard of living.

I really don't think the average US auto worker has anywhere close the real level of income they did 20 to 30 years ago (and there are far less of them) so that line of argument seems a bit weak.

As for the US education system, you could argue that it's downgrading has been a deliberate policy by those advocating globalisation (and you'll find plenty of people on the left and right fringes who have argued exactly that over the years).


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