Thoughts on rural decline, wage stagnation, white working class backlash, etc.

By Spencer Slagowitz || April 10th, 2017

We at Popular Discourse have not posted in a while, due to the demands of college and work, so to our one reader, we apologize (sorry mom!). Instead of the long formal articles we usually write, I decided to write down some of my current thinking vis a vis rural economic decline, its causes, and its consequences.

  1. Economic activity has shifted from rural america to urban population centers. (Urban population centers have higher productivity rates, urban Americans are beneficiaries of numerous external economies of scale and network externalities as a result of population density (attracts economic opportunity away from rural areas) cities were able to maintain steady growth during recession while rural areas floundered, economic activity of rural towns were centered around participation in a single industry—often those which the US either no longer has a comparative advantage in or those which have become heavily automized.
  2. However, labor mobility (especially amongst aging rural populations) is lower than expected. Migration is an automatic fiscal stabilizer, labor moves to adjust to asymmetric (regional) shocks. But instead of moving when times got rough, inhabitants of rural areas have seen economic activity slowly drown.
  3. Leading to the persistent wage stagnation we see in these areas and (speculatively) the symptoms such a decline in economic activity has produced.
    1. Opioid Abuse
    2. High-rates of suicide (See: Case-Deaton)
    3. Populist/demographic backlash
    4. Lack of dignity
    5. Feelings of being “left behind”
  4. Also see these books/resources as evidence of the symptomatic expression of rural decline…
  5. It is not controversial to assert that we and our government bears some sort of moral obligation towards our fellow Americans. Nor is it controversial to suggest that when our nation’s economy leaves behind or ignores rural America, leaving growth to stagnate in those regions and devastating communities for reasons exogenous or out of the control of those very same communities, that there is an imperative to address this arrangement.
  6. Moreover (or perhaps, necessarily), the economic imperative to bring back economic activity to rural areas or to aid rural Americans to move to cities or other areas of high economic activity is incredibly powerful. The health of the macroeconomy as a whole would be improved by higher average wage rates for all americans, by increased aggregate demand, by increased productivity, by linking up rural workers with few opportunities with an increased variety of job and work opportunities. I don’t think this point needs further justification, moreover I think it is quite intuitive that increased economic growth in rural areas or increased economic growth generated by interregional migration helps the United States as a whole.
  7. This discussion has, in the news media and the pundit class, mostly focused on economic decline in rural areas and it’s consequences for the region and for the United States as a whole. But arguably, this same sort of decline and economic stagnation has been experienced by African-American communities in America for decades and to a much higher degree as a consequence of racism, the persistent poverty & mass-incarceration that has resulted from it, and the complex and pernicious interaction between economic and sociological factors that has trapped these communities in a vicious and repugnant cycle. The same moral and economic imperatives, that, according to the commentators and public intellectuals, compel us to address rural economic decline must also compel us towards addressing the persistent poverty and economic decline that has been driven by racism.