The prosperity paradox is dividing the country in two

While President Donald Trump relentlessly claims credit for the strengthening economy, the nation's economic growth i...

Posted: Jan 23, 2018 12:36 PM
Updated: Jan 23, 2018 12:36 PM

While President Donald Trump relentlessly claims credit for the strengthening economy, the nation's economic growth is being driven overwhelmingly by the places that are most resistant to him.

Counties that voted for Hillary Clinton against Trump in 2016 accounted for nearly three-fourths of the nation's increased economic output and almost two-thirds of its new jobs in the years leading up to his election, according to previously unpublished findings provided to CNN by the Metropolitan Policy Program at the Brookings Institution.

That imbalance looks even starker when considering that Clinton won less than one-sixth of the nation's counties. Trump carried more counties than any candidate in either party since Ronald Reagan in 1984.

Yet it is the diverse major metropolitan areas that voted in preponderant numbers against Trump that have clearly emerged as the nation's engines of growth. In the process, the big blue metros have pulled further away from the small town and rural communities that provide the foundation of Trump's support.

The key to this divergence has been the large metro areas' dominance of the job opportunities created by the diffusion of digital technologies, largely in white-collar industries from business consulting to software development. Meanwhile, smaller places remain much more reliant on resource extraction (like oil and gas production), manufacturing and agriculture, which have not grown nearly as reliably, or explosively, as the digital economy.

"We have two quite different economies, and what is happening in recent years is growth is largely emanating from these big county metros," says Mark Muro, director of policy at the Metropolitan Policy Program. "These are not political trends. They are deep economic and technological long waves. And while we are in the midst of this long wave, we are not near the end of it."

These trends long predate Trump's presidency. But the President's policy agenda, which prioritizes reviving manufacturing and promoting energy development, generally favors the smaller places over the large metros -- many of which feel threatened by his initiatives, from restricting immigration and trade to limiting the deductibility of state and local taxes.

Muro, like many economic analysts, is dubious that anything Trump does can meaningfully unwind the consolidation of economic opportunity into the largest metropolitan areas. If anything, Muro says, the tilt toward the big blue metros has intensified in recent years. "We think this is a fundamental sea change," he says.

This pattern creates what could be called the prosperity paradox. Even as economic growth is concentrating in Democratic-leaning metropolitan areas thriving in the information economy, Republicans rooted in non-urban communities largely excluded from those opportunities now control all the levers of power in Washington and in most states. That disjuncture raises a pointed long-term question: How long can the places that are mostly lagging in the economy dictate the terms of politics and policy to the places that are mostly succeeding?

Generally through American history, political power has followed economic power. From the Civil War through the Great Depression, Republicans controlled the White House for 56 of 72 years as the party of the rapidly industrializing and urbanizing Northeast and Midwest. During that era, Democrats were marginalized politically as the champions of the agricultural and resource-producing South and West that felt sublimated by the Northern-based industrial and financial economic order.

In the decades just before and after World War II, Franklin Roosevelt built an impregnable New Deal Democratic coalition that married support from traditionally internationalist Eastern business and finance interests with new efforts to integrate the South and West into the national economy (through mechanisms ranging from the Tennessee Valley Authority to the World War II defense buildup). Similarly, the shift of economic clout to the Sun Belt after World War II prefigured the conservative movement's resurgence from the 1960s through the 1990s around Republicans Barry Goldwater of Arizona and Ronald Reagan of California.

Today the nation's core economic divide is less between regions than within them. After mostly declining through the late 20th century, the large metropolitan areas have restored their position as the locus of growth across the country by emerging as the epicenter of the information economy.

That advantage has allowed many metropolitan areas to achieve booming levels of growth and investment unmatched for decades: Tim Burgess, who served as acting Seattle mayor last fall, for instance, recently told me that the city is now enjoying its best economy since the Klondike gold rush in the 1890s. The intense nationwide competition for the second Amazon headquarters -- which produced finalists located solely in large metropolitan areas -- underscores how digital technologies are concentrating economic opportunity into the nation's biggest places.

Data from Muro and Brookings research assistant Jacob Whiton quantify the dramatic extent of that shift.

In 2016, Clinton won fewer than 500 counties and Trump won more than 2,600. But the counties that Clinton carried accounted for 72% of the nation's increased economic output from 2014 through 2016, the most recent years for which figures are available, according to Brookings. The Clinton counties accounted for 66% of the new job growth over that period as well.

In both output and employment the Clinton counties over that recent period accounted for an even higher percentage of the new growth than they did from 2010 through 2016, the full period of recovery from the financial crash of 2008.

The tilt away from Trump is even more pronounced at the very top of the economic pyramid. Of the 30 counties that generated the largest share of new jobs from 2014 through 2016, Trump carried only two: Collin County (north of Dallas) and Maricopa (Arizona), where Republican-leaning suburbs slightly outvoted a strongly Democratic metro core in Phoenix.

Clinton carried all the other places leading the employment growth list. That included not only such blue state behemoths as Los Angeles, Chicago, New York and Seattle, but also the economic hubs in purple and even Republican-leaning states, from Miami, Oakland County (outside Detroit), to Mecklenburg (Charlotte) and Wake (Raleigh) counties in North Carolina, and Dallas, Bexar (San Antonio) and Travis counties (Austin) in Texas.

In all, Brookings calculated, Clinton won 79 of the 100 counties that contributed the most to economic growth from 2014 to 2016, and 76 of the 100 that generated the most job growth.

Trump's struggles even in the metro areas of red states underscore how virtually every region of the country is experiencing the same consolidation of economic opportunity into Democratic-leaning urban areas also typically marked by increasing racial diversity.

Clinton won a majority of the counties in only four states. Yet from 2014 through 2016, the counties she carried accounted for a majority of the job growth in 29 states, Brookings found. Her counties accounted for a majority of the growth in economic output in 30 states.

The Clinton counties accounted for a majority of the growth in output and jobs in every state she carried, except for New Hampshire and New Mexico. Her counties also provided a majority of the output and employment growth in nine states that Trump carried.

That list starts with traditional swing states including North Carolina (where Clinton counties accounted for two-thirds of both jobs and output growth), Pennsylvania (three-fifths of output and almost three-fourths of jobs) and Florida (just over half of each).

Clinton counties also provided most of the economic gains even in places that are now considered much more reliably Republican, including Nebraska (just over half of both output and growth), Georgia (just over two-thirds of output and just under two-thirds of jobs) and even Texas (just over three-fifths of both output and growth.)

In competitive states, the biggest exception to this pattern is the swing states of the upper Midwest: Trump counties accounted for a majority of the jobs in Michigan, Wisconsin and Ohio, and a majority of the output growth in the later two. And Trump counties provided most of the job and output growth in most Southern, Plains and Mountain states, where Clinton won shockingly few counties, from Alabama and Tennessee to South Dakota and Idaho.

Yet even across that ruby red terrain, there are striking exceptions: Clinton counties generated most of the output growth in Kansas and Utah, and most of the job growth in Montana.

In the near term, experts agree, this economic realignment has fueled the GOP's political resurgence. Observers in both parties agree that the sense of economic displacement in recent years has intensified the long-standing movement toward the GOP among small-town and rural communities initially rooted in unease over cultural and demographic change.

"Unhappy people vote," says Mitchell Moss, a professor of urban policy at New York University. "The great irony is that as the economy has had growth in industries that are driven by technology or information, that's led to vast declines in traditional manufacturing and even traditional agriculture. Those areas declining economically have not been depopulated yet, and the economy has devastated them, so their only recourse is to vote for somebody who was different [Trump]."

Yet with economic success, the blue-leaning metro areas are also inexorably gaining population, in particular among the younger, diverse and college-educated voters increasingly central to the Democratic electoral coalition. Many public and private sector leaders in the big blue metros believe their economic success is threatened by the Trump agenda of hostility to immigration and free trade, the prioritization of tax cuts over investments in education and scientific research, the stoking of racial tensions, resistance to cultural change on issues such as gay and transgender rights, and the GOP move to limit the federal deductibility of state and local taxes.

Support for Trump's tax cut and deregulatory agenda among metropolitan business leaders, particularly in finance, may moderate some of that opposition, but it is unlikely to reverse the overall tilt toward resistance.

Nor is the trend toward greater concentration of economic opportunity likely to reverse, Muro says. Boom periods in the energy industry may temporarily tilt the growth and jobs numbers slightly back toward the non-urban areas where Trump is strongest, he says. But as long as the computer and communications revolution is propelling growth, he says, the big metropolitan areas will not only remain economically pre-eminent but also likely increase their dominance over time.

"It looks to me that there are more technologies out there that will augment ... the blue county economy," Muro says. "This is not a temporary thing. This is more akin to the industrial revolution: The information technology, innovation, artificial intelligence economy is going to be a 100-year cycle. We are now getting deeper into that period and we are seeing greater regional variations ... and greater blue metro centrality to the economy."

And that means the nation is poised for even greater tension between an economic order that increasingly favors the largest places -- and a political dynamic that, for now, sublimates them to the smaller places that are economically falling behind.

Indiana Coronavirus Cases

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Cases: 667262

Reported Deaths: 12737
CountyCasesDeaths
Marion913541660
Lake48729891
Allen36175646
Hamilton32489398
St. Joseph30361514
Elkhart25536420
Vanderburgh21343382
Tippecanoe20240205
Johnson16485363
Porter16077281
Hendricks15955302
Clark12079182
Madison11810323
Vigo11699234
Monroe10440164
Delaware9899179
LaPorte9838201
Howard9127203
Kosciusko8600111
Bartholomew7531147
Hancock7471134
Warrick7456153
Floyd7269173
Wayne6661192
Grant6465158
Boone618691
Morgan6135129
Dubois5942112
Dearborn551570
Cass5489100
Marshall5456105
Henry544395
Noble513878
Jackson465967
Shelby463591
Lawrence4197113
Gibson405585
Harrison404065
Clinton397653
Montgomery391984
DeKalb388278
Miami358463
Knox357886
Whitley352438
Huntington350877
Steuben340455
Putnam334660
Wabash333976
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Jasper319343
White298553
Jefferson296574
Daviess286196
Fayette272756
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Posey261732
Wells259175
Scott252150
LaGrange242670
Clay241644
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Spencer219630
Jennings216944
Washington213327
Sullivan203839
Fountain202842
Starke190051
Owen184254
Fulton179937
Jay178828
Carroll176919
Perry174136
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Rush165722
Vermillion161543
Franklin160135
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Parke140216
Pike128633
Blackford120727
Pulaski107844
Newton96832
Brown95340
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Martin80314
Warren76014
Switzerland7568
Union67510
Ohio54211
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Ohio Coronavirus Cases

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Cases: 978471

Reported Deaths: 17501
CountyCasesDeaths
Franklin1130371251
Cuyahoga969331881
Hamilton739231067
Montgomery47536923
Summit40720831
Butler35859531
Lucas35802720
Stark29602826
Warren22593275
Lorain22218424
Mahoning19586551
Lake18564332
Clermont18541205
Delaware16614121
Licking15096194
Fairfield14653188
Trumbull14437424
Greene13664221
Medina13531237
Clark12394256
Wood11670170
Portage11140172
Allen10822216
Richland10376188
Miami10065194
Muskingum8244117
Columbiana8174210
Pickaway8096111
Tuscarawas8083232
Marion8021127
Wayne7939199
Erie6972146
Ross6178132
Geauga6118142
Hancock6032121
Scioto600988
Ashtabula6002154
Lawrence527886
Union516741
Darke5052116
Belmont5000137
Huron4862108
Jefferson4843137
Sandusky4800112
Washington475596
Seneca4738111
Athens466449
Mercer459781
Auglaize456682
Shelby442679
Knox4056105
Putnam400593
Madison395755
Fulton383461
Ashland383083
Brown375252
Defiance374088
Crawford360198
Logan357673
Preble354187
Clinton342755
Highland328551
Ottawa325471
Williams303568
Jackson292046
Champaign291149
Guernsey288945
Perry271348
Fayette270143
Morrow261637
Henry247961
Hardin247359
Holmes244497
Coshocton241156
Van Wert230357
Gallia223938
Adams218339
Pike217328
Wyandot212450
Hocking195154
Carroll182143
Paulding161134
Meigs136031
Noble129233
Monroe117637
Morgan102220
Harrison100731
Vinton76713
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