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Metropolitan Areas versus Rural: Job Growth is Concentrated in Metropolitan Areas

Rural Areas See No Job Growth Since 2007

I read an article in the New York Times, about a week or so ago, about how the rural areas saw a devastating collapse of job growth since the Great Recession (but I would almost think it began around 2000 when wages started flattening out). The author, Thomas Edsall, usually writes about psychological insights into people and overlay that with statistics and charts. This article is an interesting read on what could have been driving the Trump supporters.

While there were undoubtedly some “deplorables” voting for Trump, quite a few, if not a lot, must have been voting in the hope for a better life. All non-metropolitan areas and metropolitan areas with population less than 1 million saw little to no job growth since the Great Recession. In the ’90’s and earlier, most of the job creation occurred in the rural areas or smaller metropolitans but sometime in the early part of the 21st century, the job creation started to shift toward the larger metropolitan areas, namely those with population greater than 1 million. There are some really good charts in the articles that you should take a look at.

I decided to do some research to get a better understanding of what constitutes a metropolitan area with greater than 1 million and what kind of percentage of Americans living in such large metropolitan areas.

In the section below, I’ve uploaded a spreadsheet that contains data pulled from the web, namely from Wikipedia. There are 3 tabs: one for cities with largest population, one for statistical metropolitan areas, and one for the world’s metropolitan areas just for curiosity’s sake. Right away I realized that the New York Times was not talking about cities because there are only 10 U.S. cities with population over 1 million. Those 10 cities constitute about roughly 28% of the U.S. population. So the article is talking about the statistical metropolitan areas which basically means the cities and their surrounding environs that are closely allied with the cities. So New York becomes New York/Newark/Jersey City or NY/NJ/PA area. Wikipedia lists 53 such areas as being greater than 1 million. Those metropolitan areas constitute a little over half of the U.S. population.

So about half of the U.S. population are living in areas with little to no new job creation. If you live in an area that suffers great job losses, then are little to no chance of finding new jobs because there are no job creation.

Now the article talks about counties and I used statistical metropolitan areas so there may be some critical differences. I decided to focus on cities and their surrounding environs because first, data on counties did not pop up quickly – statistical metropolitan areas showed up instead. Secondly, it’s possible that a city and its environs could cross two counties so a county might not be a proper container for economic activity.

Anyway, just think, about 50% of the population face little prospect of finding good jobs. Instead they face a prospect of no improvement in their life because of lack of opportunities. It will not matter whether they get education or not because there are a dearth of opportunities where they live. So if a major employer decides to move elsewhere, then it’s really hard on the remaining population.

How do we resolve this? Well, the article did not provide much hope. Instead, one of the researchers who has been studying the prospect of future loss of jobs due to inroads made by software or robots has this to say:

We’ll continue to see the middle class hollowed out and will see growth at the low and high ends. Really good executives, entrepreneurs, investors, and novelists — they will all reap rewards. Yo-Yo Ma won’t be replaced by a robot anytime soon, but financially, I wouldn’t want to be the world’s 100th-best cellist.

This is pretty distressing. We will have to find something that we are really, really, really good at and we will have to live in one of those large metropolitan areas.

 

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