Sounds like a recipe for right-wing populism in a federal system like the US, where less populous areas are having the terms of their local economies dictated by unchecked market concentration of players in urban centers.
You’re not going to convince rural America that their rents should be driven up because an east coast private equity firm needs greater returns or that Amazon warehouse work is a good job because it enables high-paid tech salaries in Seattle. It’s a problem that has to be addressed because of the particularities of our politics and economy.
Then they will be welcome to not receive subsidies from the urban areas either. It is an adjustment that needs to happen. For work that must be done in rural areas, compensation needs to be greatly increased to offset the lack of conveniences.
These are fine sentiments, but wages have been stagnant for most low-paid workers for some time, and over half of the US falls into that category. They’re certainly not meaningfully rising in relation to the costs of housing and healthcare. The “lack of conveniences” you describe include things like access to grocery stores and medical care. The subsidies they receive from urban centers aren’t translating to material improvement for the vast majority of them, so you still have to square the circle of American geography, politics, and wealth concentration in its economy.
The wages are stagnant because the demand for labor is not sufficiently high. So either the supply of labor needs to go down (which it is slowly as population is decreasing in rural areas), or the demand for labor needs to go up. There is no other long term solution. One can argue for subsidies to ease the transition, but a permanent subsidy situation is not ideal.
I don't think you realize how cheap rural areas are. For instance, I grew up in a small town in Missouri and you can buy a house there for less than $20,000[0]. It needs a lot of work but still. Compensation does need to be greatly increased in these areas, people just need to stop trying to compare two radically different areas. Each area should only be compared to its older self. If the area is constantly making more money per person year over year, the peoples lives there will get better and better.
Why would the rents in rural Montana increase due to COL in Seattle? They're separate markets. If you're within a commutable distance, they're not. Remote work skews this a little bit, but until it's widespread it's not a measurable impact on real estate prices or broader COL.
Because Capital seeking ever greater returns knows no geographic boundaries nor is it especially considerate of the local viability of its arrangements. Just look at what Buffet-owned Clayton Homes is doing with trailer park mortgages in rural areas:
Not sure why you are getting down voted other than what you are saying is an unpopular truth. In general, rent seeking is at all-time highs and something will break because a large number of Americans are making $15/hr or less and that's just not sustainable in a nation where health care costs have skyrocketed, education costs have skyrocketed, food, fuel and basic necessities are seeing price inflation, all the while these billionaires are throwing around dollar figures with 8, 9, 10 zeros at the end. The rest of us still count our change for a lunch that used to cost $6.39 but now costs $12.98.
I just personally feel like pitchforks and torches aren't that far off for real.
I think it's interesting that in your previous post you harp on East Coast PE firms and Amazon ('coastal elites') and then in this example Buffet is based in Nebraska and Clayton Homes is based in Tennessee.
When you say unchecked market concentration it sounds like you want some sort of governmental solution to check that market concentration - what's the proposal.
Yes, a lot of these sorts of measurements tend to just be population heat maps. Going down the list of most populous metro areas in the U.S. [1] or the most populous counties [2], all the top places are represented in the list. Although there are a few outliers at the edges (e.g. Charlotte, NC seems to punch above its weight).
Lowe's, Duke Energy... I'd probably have expected Wake County in that general area but that's something of a bias because of tech--and because it's the capital.
As the article notes, this isn't purely explained by population--but a lot of it is. It's maybe also worth noting that, for a lot of those metros, a decent chunk of the working population lives far enough outside of the metro area to be in another county. (Some businesses are too of course but probably less than the number of people.)
I work for an office in the RDU aka the Research Triangle.
We're mostly or entirely remote. Lots of long commutes for the people who are obligated to come in.
Big names and decent salaries for the COL, though.
They do display that comparison—that the counties they identify represent 32% of the GDP, but only 22% of the population. Still, they also show that it's been pretty constant, so I don't know if it's a meaningful grouping.
And that delta is cut in about half if you look at share of employment as opposed to total population (which includes retired people, etc.)
By the time you take into account commuters from outside the metro county, I wonder how much difference there is at all.
And clearly the two numbers have to be highly correlated. Most people live near where their jobs are and the combination of their consumption and the money they're paid are big components of GDP.
So while employment concentration and GDP concentration may be interesting, they're pretty much different measures of more or less the same thing.
On the flip side, the counties containing Orlando and Tampa aren't in the top 31 by GDP although they're in the top 31 by population. Similarly for Nassau and Suffolk counties (Long Island) in New York, I think, although I'm just working from the map in the OP so it's hard to be sure - I guess the money made by people living in those counties gets attributed to jobs in the city.
> And 2/3rds of the US population lives in 3.5% of the land area, what do you expect?
Per the article, it's more than just that, unsurprisingly.
"A large population and workforce is only part of the story. Last year, these counties represented $1.3 trillion more of nationwide GDP than the share of workers alone would account for. Looking at population, their combined share of GDP rose even as their share of overall population fell. The difference may stem from other aspects of a city, such as clusters of activity or networks, that improve productivity."
Guess it's a slow news week. A large chunk of the country's GDP is concentrated where a large chunk of the population lives?? Riveting reporting, Bloomberg.
Except if you look at the actual political discussion, that's not the idea you will get.
The vast majority of American political discussion is centered around the idea that "real Americans" are those living in rural areas, when in fact a few years ago the majority of Americans live in urban zones.
But further, there is a pervasive belief that it's those rural areas that are keeping the US economy going, and pretty much all political economic discussion is based on the idea of catering to rural areas economic needs, when in reality, as this article shows, the overwhelming majority of the US's economic output comes from urban areas.
Bad rhetoric like this is why rural people hate coastal elites. Monopoly pricing power and financial engineering for capture of economy profit does not equal value created. Video games and food are not equally important.
And why would you need to cater to the economic needs of the least needy part of the economy?
“Urban” is a broadly defined term. According to the Census Bureau, Sibley Iowa (pop. 2,800) is an “urban” area. So are the suburbs and exurbs of Des Moines. Most Americans don’t live in what you’d usually think of as an “urban area.”
I also disagree with your characterization of our political narratives. There is probably a disproportionate focus on rural areas. (Although, that accounts for 20% of the population, which is pretty remarkable when you consider that the small towns in rural areas are classified as “urban.”) There is also a big media focus on rust belt cities and the like. (The famous “Cuyahoga County”). That encompasses secondary cities like Cleveland and their suburbs. That is where most Americans live.
As I've said before, the census definition of "urban" makes sense in the context of the vast areas of the US that are truly middle of nowhere rural. But most places that are classified as urban have very little in common with a city core where you can walk out of your apartment to the corner store. I live in an urban area between an apple orchard and a Christmas tree farm.
Rural America accounts for a significant portion of global crops and livestock. As someone who enjoys having cheap and available food, please do not disparage the hardworking Americans who make that possible
There's a lot of rural America that's not in agriculture[0]. I mean yes many of the other rural folks provide services to farmers but I wouldn't say the assistant manager of a McDonalds in Small Town America is involved in farming just as I wouldn't say the assistant manager of a Starbucks on Wall Street is involved in investment banking.
I can't find data on it but I would not be surprised if public sector (all levels) employment and employment with companies that mostly contract for government, as a percentage of total employment, is pretty high in rural areas and small towns, actually.
[0] Looks like that's around 1.41% of the US population from World Bank data, fairly flat since the early '00s; stat includes forestry, fishing, and hunting jobs, so is likely more inclusive than what most people usually think of as "agriculture" as in mass food production, though I can't suss out whether it includes stuff like farm equipment sales & servicing, or people running grain elevators, stuff like that.
Since cities are centers of consumption (C) and government spending (G), and those that are ports do exporting (NX=net exports), the concentration seems reasonable.
Government spending doesn't add to GDP because government doesn't create the money it spends. All the money government has to spend and create value is a byproduct of what actually goes into GDP.
You’re not quite correct but not entirely wrong either. You can measure GDP by measuring production, or measuring consumption plus investment and exports. (Everything that is produced must be either consumed, saved, or exported.) Government spending is one type of consumption that’s included in the GDP calculation.
Obviously, however, a dollar of government spending will typically replace a dollar that would otherwise be consumed or invested.
> Obviously, however, a dollar of government spending will typically replace a dollar that would otherwise be consumed or invested.
It may be "obvious", but is it true? There's quite a bit of economics suggesting that it isn't, ranging from multiplier effects and orthodox Keynsianism ("reserve army of the unemployed") to more surprising claims from the MMT wing.
The core flaw is that GDP is a national calculation and so cannot be used for county analysis. You'd need to compute Gross County Product separately for every county, to avoid cancelling out one county's exports against a different county's imports.
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[ 2.6 ms ] story [ 106 ms ] threadThe correction here is not to spread things out again but to adapt to the concentration.
You’re not going to convince rural America that their rents should be driven up because an east coast private equity firm needs greater returns or that Amazon warehouse work is a good job because it enables high-paid tech salaries in Seattle. It’s a problem that has to be addressed because of the particularities of our politics and economy.
[0]https://www.zillow.com/homedetails/724-Fisk-Ave-Moberly-MO-6...
https://www.seattletimes.com/business/real-estate/the-mobile...
Or how private equity has been buying up real estate in the rust belt.
https://www.journals.uchicago.edu/doi/abs/10.1086/701697
I just personally feel like pitchforks and torches aren't that far off for real.
https://www.wsj.com/articles/blackstone-moves-out-of-rental-...
[1] https://en.wikipedia.org/wiki/List_of_metropolitan_statistic... [2] https://en.wikipedia.org/wiki/List_of_the_most_populous_coun...
As the article notes, this isn't purely explained by population--but a lot of it is. It's maybe also worth noting that, for a lot of those metros, a decent chunk of the working population lives far enough outside of the metro area to be in another county. (Some businesses are too of course but probably less than the number of people.)
Big names and decent salaries for the COL, though.
By the time you take into account commuters from outside the metro county, I wonder how much difference there is at all.
And clearly the two numbers have to be highly correlated. Most people live near where their jobs are and the combination of their consumption and the money they're paid are big components of GDP.
So while employment concentration and GDP concentration may be interesting, they're pretty much different measures of more or less the same thing.
oh wow! really?! very interesting
Per the article, it's more than just that, unsurprisingly.
"A large population and workforce is only part of the story. Last year, these counties represented $1.3 trillion more of nationwide GDP than the share of workers alone would account for. Looking at population, their combined share of GDP rose even as their share of overall population fell. The difference may stem from other aspects of a city, such as clusters of activity or networks, that improve productivity."
The vast majority of American political discussion is centered around the idea that "real Americans" are those living in rural areas, when in fact a few years ago the majority of Americans live in urban zones.
But further, there is a pervasive belief that it's those rural areas that are keeping the US economy going, and pretty much all political economic discussion is based on the idea of catering to rural areas economic needs, when in reality, as this article shows, the overwhelming majority of the US's economic output comes from urban areas.
And why would you need to cater to the economic needs of the least needy part of the economy?
I also disagree with your characterization of our political narratives. There is probably a disproportionate focus on rural areas. (Although, that accounts for 20% of the population, which is pretty remarkable when you consider that the small towns in rural areas are classified as “urban.”) There is also a big media focus on rust belt cities and the like. (The famous “Cuyahoga County”). That encompasses secondary cities like Cleveland and their suburbs. That is where most Americans live.
I can't find data on it but I would not be surprised if public sector (all levels) employment and employment with companies that mostly contract for government, as a percentage of total employment, is pretty high in rural areas and small towns, actually.
[0] Looks like that's around 1.41% of the US population from World Bank data, fairly flat since the early '00s; stat includes forestry, fishing, and hunting jobs, so is likely more inclusive than what most people usually think of as "agriculture" as in mass food production, though I can't suss out whether it includes stuff like farm equipment sales & servicing, or people running grain elevators, stuff like that.
Since cities are centers of consumption (C) and government spending (G), and those that are ports do exporting (NX=net exports), the concentration seems reasonable.
Obviously, however, a dollar of government spending will typically replace a dollar that would otherwise be consumed or invested.
It may be "obvious", but is it true? There's quite a bit of economics suggesting that it isn't, ranging from multiplier effects and orthodox Keynsianism ("reserve army of the unemployed") to more surprising claims from the MMT wing.
Among other things, you can predict the average walking speed in a city with some accuracy.