Why your mental map of the US economy is probably wrong
Sign up to receive breaking news alerts from the Globe http://bos.gl/2RQPbTu
If you think of America as a divided nation, with the coastal cities thriving and the vast middle struggling, it might be time to stop.
The heartland has its own high-performing hubs of economic growth. In fact, since 1980, the counties with the biggest income gains lie mostly in the vast middle, including a spring of success across the South and another running up the central corridor, from Texas to the Dakotas.
What’s behind the gains of interior America? Oil, gas, and the fracking boom have played a part, but not the only part. Just as important are geographic shifts that have brought manufacturing jobs to the plains and service jobs to the Gulf of Mexico.
And there’s a political implication as well. Once you recognize the forgotten economic strength of flyover country, it’s harder to accept the conventional wisdom that ties President Trump’s electoral appeal to long-term economic stagnation. County by county, there is no meaningful relationship between income growth and Trump support.
To get a fuller sense of what’s going on, it helps to look at a map, one that shows the increase in per capita income in each US county between 1980 and 2015.
Growth is clustered in regions, rather than dotted across individual spots. The highest gains are in the eastern plains, making Minnesota, Iowa, Nebraska, and the Dakotas the surprise economic champions of the last generation. Close behind are Western Texas, New England, and a ring of counties in the South.
The secret to heartland success
No one force can explain this pattern, particularly as we’re looking across multiple business cycles spanning three and half decades.
The fracking boom, and the roaring natural gas industry, certainly played a role across the plains. But even if you exclude the fracking years and focus on the period from 1980-2005, the pattern looks quite similar.
Before oil rigs came to North Dakota, the state was already enjoying a manufacturing renaissance, including a huge increase in jobs making durable goods.
Across the South, the big story is the exploding service sector, which saw job growth of approximately 250 percent. This was led by business-to-business jobs like consulting, advertising, or computer work. At the same time, there were rapid increases in the number of health service and engineering jobs.
Here in New England, the galvanizing force has been a similar boom in high-skill service jobs and other professional fields like accounting, architecture, and legal services.
One cliche that really does seem to match the data is the flagging Midwest, which shows limited growth from Michigan to Illinois. Still, the Midwest can’t be taken as a stand-in for all of middle America. It is not the face of a broader tragedy but rather the struggling exception in a sea of unacknowledged success.
It’s worth noting that these results hold up even for alternate measures of economic success. Swap median household earnings for these per capita numbers, and the pattern doesn’t change much. Switching to GDP is trickier because county-level numbers aren’t available, but from a broader view the Plains still emerge as the fastest-growing US region.
Also, the effect doesn’t seem to be a mere statistical fluke. You might think, for instance, that long-term income growth would be greater in counties that start out with lower incomes — or just ones that are small. But there’s no meaningful correlation between county growth and county size, or initial income levels.
The economic map doesn’t match the political one
Perhaps the most striking thing about this map of economic growth is that it looks nothing like the familiar red-and-blue political quilt. On election nights, the big divide is outside vs. inside, East and West against the middle. Not so when it comes to long-term income growth, where Mississippi can match up with Massachusetts, and Ohio with Oregon.
A more rigorous county-level analysis shows the same thing. There is simply no correlation between Trump’s vote share and the long-term change in per capita income. Knowing one tells you virtually nothing about the other.
Which might be a reason to connect Trump’s appeal with other things: cultural concerns, resistance to immigration, and a powerful antielite ethos.
The more general takeaway is that it’s probably time to update our mental maps when it comes to thinking about winners and losers in the US economy. Recent decades have not produced an irrevocable divide between thriving blue states and struggling red ones. Most of the fastest-growing counties lie far from the coasts, in the resource-rich plains and the diversifying South.