Friday, October 27, 2017

Economic Anxiety, Con't

The economists over at Indeed Hiring Lab make the argument that the areas of the country that voted for Donald Trump in 2016 are the areas facing the smallest job growth in the decade ahead, meaning that if my predictions about Trump wrecking the economy come true, then the people who voted for Trump are going to be even worse off.

The BLS occupational projections favor some places over others. We combined these projections with 2016 U.S. Census Bureau’s American Community Survey data on where specific occupations are located to see which places are blessed with faster-growing occupations.

The occupational projections suggest faster growth in urban areas than in suburbs, and slowest in rural areas. The two sectors projected to have no or negative growth — production and agriculture — are more concentrated in small towns and rural areas. Many technical, scientific, legal, financial, and healthcare jobs are clustered in big, dense cities.

Even among large metros, the occupational mix varies. Metro San Jose — that is, Silicon Valley — has the most favorable occupational mix for future growth, as do other big, coastal metros. Whether this translates into actual job growth depends on other factors, too, like the local cost of living and whether housing construction will accommodate future growth pressures.

Midsize metros in the South and Midwest tend to have a less favorable occupational mix, skewed more toward slower-growing production or administrative jobs. Again, other factors will influence whether these places end up having slower actual job growth — including their ability to attract jobs in faster-growing occupations.

The differences in projected growth among metros are small. Large metros aren’t as different in their occupational mix as you might think: many retail, sales, and service occupations are “everywhere jobs.” Plus, this calculation might understate the impact of job mix on local growth because it ignores any multiplier effect of, say, a local tech boom on local retail demand.

These geographic differences might also lead to further political polarization. Blue America has a more favorable job mix for future growth than Red America, where slower-growing manufacturing and agriculture jobs are clustered. In places that voted for President Trump by a 20-point margin, 16% of workers are in occupations projected to shrink, versus 13.2% of workers in places that voted for Hillary Clinton by a similar margin.

The risk of job loss goes in the opposite direction of other job-market indicators. Likely Trump supporters have, on average, lower unemployment and higher wages than likely Clinton supporters. But should these BLS projections come true, then the labor market could shift further toward healthcare and other high-education jobs, and away from production, middle-wage, and traditionally small-town jobs. In turn this may end up reinforcing or even increasing the economic, geographic, and political polarization of America.

Which makes you wonder, why did Red America vote for the party of policies that would specifically make this situation worse for them, only making them angrier in 2018, 2020 and beyond?

Gosh, I just don't know.

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