Krugman: What former industrial heartlands have in common

 

the time is coming soon to take apart this almost pathetic analysis of why feeling "left behind" is caused by everything except "being left behind". This is a pernicious thread in much liberal literature, Along with "poverty would not feel so bad if everyone got therapy", IMO.

But now is not the time. All hands on deck to stop Trump --

What former industrial heartlands have in common

Paul Krugman

There were local elections in several German states a few days ago, and the results — a strong showing by the Alliance for Germany or AfD, a right-wing extremist party — were shocking but not surprising. Shocking because, given their history, Germans more than anyone else should fear the rise of anti-democratic right-wing forces. Not surprising because the AfD has been rising for a while, especially in the former East Germany, where the elections were held.

I am not any kind of an expert on Germany, and I won’t speculate about what these results mean for the Bundesrepublik’s future. What I can say as an American is that despite the vast differences in our nations’ modern histories, the rise of Germany’s modern far right — and especially its concentration of support in economically depressed areas — looks remarkably familiar.

Put it this way: In some important respects Thuringia, the German state where the AfD won more votes than any other party, resembles West Virginia. Like West Virginia, it’s a place the 21st-century economy seems to have left behind, whose population is in decline, with younger people in particular leaving for opportunities elsewhere. And West Virginia strongly supports Donald Trump and his party, whose doctrines bear considerable resemblance to those of the AfD.

After Donald Trump won the 2016 election, there was a lot of facile talk about voters driven by economic anxiety. Voters’ real motivations are more complex than that.

But MAGA’s rise does seem connected to the economic decline of much of rural and small-town America. This decline has happened in many parts of the country, including, for example, much of upstate New York, but it is concentrated in what Benjamin Austin, Edward Glaeser and Lawrence Summers have called the “eastern heartland.” In what follows I’ll focus on numbers for West Virginia, which is arguably the heart of that heartland, and epitomizes both the economic and political problems of left-behind regions.

So what stands out when you compare West Virginia with other parts of America is the number of men not working. I say “men” because even now, despite the rise in the percentage of women in the paid labor force since 1970, our expectation that adults of working age will, in fact, have jobs is stronger for men than for women.

Here’s a comparison between West Virginia and New Jersey. Why New Jersey? I’ll explain in a moment. The chart shows the percentage of adults ages 20 to 64 who didn’t have jobs in 2019 (before the pandemic):

American Community Survey

Adults of both sexes were much more likely not to be working in West Virginia, although the gap was larger for men (67 versus 43 percent).

Why is not working a problem? Obviously, it means you aren’t earning wages, but it goes deeper than that. Jobs are a source of dignity, a sense of self-worth; people who aren’t working when they feel they should be — a problem that, like it or not, is even now bigger for men than women — feel shame, which all too easily turns into anger, a desire to blame someone else and lash out.

So the lack of jobs for men helps extremist political movements that appeal to angry men. In Germany, the AfD has much stronger support among men than women. Polls show a large advantage for Kamala Harris among women in the United States, while Trump leads among men. Places where there are many men without jobs are fertile ground for MAGA, which is trying to court the “manoverse.”

Why are jobs, especially for men, so hard to get in West Virginia?

Despite what you may hear from the likes of JD Vance, native-born West Virginians aren’t losing jobs to immigrants because the state hardly has any immigrants — only 1.8 percent of the population is foreign-born, the lowest in the nation, while the corresponding number for New Jersey is 23.5 percent, close to the top.

The parallel between economic and political developments in the United States and Germany also rules out the idea that the heartland is suffering because trade deficits are undermining our manufacturing sector. For while America has indeed been running trade deficits, Germany has been running huge surpluses — yet is experiencing similar discontent and anger:

World Bank

So what’s the matter with the heartland? The most likely story is that the 21st-century economy is driven by knowledge-intensive industries that flourish in metropolitan areas with highly educated work forces. This has led to a self-reinforcing process in which jobs migrate to places with lots of college graduates, and college graduates migrate to the same places, leaving less-educated places like West Virginia stranded.

Is the solution, then, for the regions that have benefited from this process to provide aid to those on the losing end? The answer, in America at least, is that they actually do in effect provide such aid, although until recently it was the result of aid to individuals rather than reflecting a deliberate “place-based” policy.

Here’s what I mean: The federal government provides a lot of support to U.S. citizens via Social Security, Medicare and Medicaid; even poor states receive the full benefit of these programs. But poor states pay relatively little in federal taxes, which support these programs. So the result is huge implicit aid to lower-income states. Here, for 2022, are federal spending and tax receipts from West Virginia (excluding Covid-related programs), as percentages of the state’s gross domestic product:

Rockefeller Institute, Bureau of Economic Analysis

In effect, the state received “foreign aid” from wealthier states of almost 12 percent of G.D.P., which is huge.

West Virginia also benefited immensely from the Affordable Care Act, which greatly reduced the number of its residents without health insurance:

KFF

You might say that the federal social safety net increases people’s incomes but doesn’t create jobs. But that’s not true. Social Security supports consumer spending, which creates jobs in retail and more. Medicare and Medicaid support jobs in hospitals, doctors’ offices, and so on. West Virginia may still think of itself as a coal-mining state, but by the numbers it has long been more accurately described as a health care state, with much of its employment ultimately driven by those federal dollars:

FRED

I guess that there are some people who don’t think of employment in hospitals, or in the service sector more generally, as “real” jobs; I don’t think nurses and schoolteachers would agree.

What is true, and may partially explain political rage in left-behind regions, is that many of the jobs federal aid creates tend to be female-coded, certainly more so than coal mining — which may in turn explain why the problem of adults without jobs appears to be worse, at least in terms of its political weight, for men than for women.

That said, the Biden-Harris administration has been making a serious effort to promote manufacturing as part of its industrial policies — an effort that seems to be disproportionately helping heartland states.

The odd thing is that the politicians angry heartland voters support — Trump received more than twice as many votes in West Virginia as Joe Biden in 2020 — oppose the very programs that aid these depressed areas. Trump tried, in effect, to kill the Affordable Care Act. Not a single Republican voted for the Inflation Reduction Act, which is helping to create manufacturing jobs in the heartland.

But then Adam Tooze, who does know something about German political economy, tells us that while the AfD talks a lot about “social distress” in lagging regions, this “does not translate into a platform that supports greater state spending.”

In Germany as in America, then, voters in left-behind regions are, understandably, angry — and they channel this anger into support for politicians who will make their plight worse.