Small-town America has gotten an economic jolt under Trump
March 20, 2018
"Fueled largely by rising oil prices, small town and rural America enjoyed an economic jolt in 2017 that could widen the political gap in November's midterm election between those smaller places more friendly to President Donald Trump and the big metropolitan areas sharply recoiling from him and his policies, new data shows.
"The new numbers, scheduled to be released Tuesday by the Metropolitan Policy Program at the center-left Brookings Institution, show that job growth in 2017 remained heavily concentrated in the largest cities benefiting the most from the transition to the information-age digital economy.
"But smaller communities, lifted by higher prices for oil, gas and other commodities and some gains in manufacturing, last year clawed back a significantly larger share of new job creation than in the final years of Barack Obama's presidency, the analysis found. This economic revival in Trump country could create another electoral obstacle for Democrats in smaller communities, where the President has also connected far better culturally and stylistically than in urbanized areas.
"As the communications and computing revolution has gained momentum since the 1990s, a central story of the American economy has been the increasing concentration of opportunity into the largest cities and inner suburbs. These more urban areas are the places that have attracted the most investment capital, an increasing share of highly educated workers, and a disproportionate proportion of the new jobs created by the computer and communications revolution.
"In 2010, the largest metropolitan areas with populations of at least one million accounted for almost 57% of all jobs, while metro areas with between 250,000 and one million people added nearly another 20%, for a combined 76.5% of total employment. By January 2017, those numbers had increased to nearly 59% for the very largest places, while remaining just under 20% for those in the next tier, for a combined 78.5%.
"Correspondingly, the combined share of total employment in smaller metropolitan areas (those with populations under 250,000) and non-metropolitan (or rural) areas fell from about 23% in 2010 to just over 21% by January 2017.
"Though such shifts in the geographic distribution of jobs may seem modest, experts like Muro note they represent major changes over a short period in a number so large as total employment.
"The shift reflected the dominance of the very largest places in new job creation from 2014-2016. According to the Brookings figures, the 53 largest metros of one million or more accounted for nearly 4-in-5 jobs created over that period, with the mid-sized metros accounting for about 1-in-7, and the smaller metros and rural areas combining for only about 1-in-14. Sagging oil prices and the collapse of the natural gas boom from excessive production was a major contributor to the weak small-town and rural performance over that period, Muro says.
"In 2016, the sense of being left behind economically -- along with a parallel anxiety about being eclipsed culturally and demographically -- produced a stampede toward Trump in America's smaller communities and one of the starkest geographic divides in any modern presidential contest. Hillary Clinton won 87 of the nation's 100 largest counties, by a crushing combined margin of more than 15 million votes. But Trump won everything else by a margin of about 12 million votes and carried more counties than any presidential nominee in either party since Ronald Reagan in 1984. Republicans also dominate House seats outside of the major urban centers.
"During Trump's first year, the new Brookings data show, the smaller places at the core of the contemporary Republican coalition showed a marked economic upturn. In 2017, non-metro areas accounted for almost 17% of new job creation -- nearly four times their share from 2014-2016. The smallest metros improved more modestly, from about 3% of new jobs in the earlier period to 4.5% in 2017. The mid-sized metros saw a small increase in their share over that period (from 13.7% to 14.7%), while the dominance of the largest metros somewhat eroded: They fell from creating about 4-in-5 jobs in the earlier period to just under 2-in-3 in 2017.
"Yet for 2018, there's no question these economic gains give Republicans another argument to make in smaller places where Trump's blustery personal style and polarizing cultural agenda has maintained much more support than in the largest metro areas. And while Muro says the small-town revival so far owes more to short-term economic cycles than to policy changes, Trump can plausibly argue that his agenda of promoting domestic energy production, loosening environmental regulation and protecting manufacturing with tariffs against foreign competitors, can help extend the gains in those places."
To read more, click here.
Economy Jobs, Wages and Unemployment