Was it a temporary dip or a fundamental restructuring of the American economy?
As the last recession dragged on and on, that was the larger question hanging over the country. And yet it remains unanswered. The debate will likely go on for months — or even years — as the recovery slowly works its way through the nation. But from where things stand this month, Patchwork Nation believes there is strong evidence that the latter is true.
The latest county unemployment numbers from February, combined with some early findings from the Census, suggest something bigger is afoot and it is remaking the American economy.
As we have noted in previous posts, the recession did not hit everywhere the same way and the same is true with the recovery. There are winners and losers among our 12 county types.
Unemployment Is Down, But Not Uniformly
It would be wrong to say the nation’s wealthy suburban areas, places that fall into our Monied Burb county type, are “back.” Unemployment remains stubbornly high almost everywhere, at least compared to historical levels. But the February numbers showed unemployment in the Monied Burbs was down below 9 percent overall.
And that’s a good sign for the economy overall — if the numbers continue to drop. Those wealthier communities, and their higher disposable incomes, are key for the growth of the larger economy.
The numbers also look better in the collegiate Campus and Careers counties, where the unemployment rate is now around 8.5 percent. And the Military Bastions, mostly located near big armed forces installations, are also at 8.7 percent.
In fact, the news is generally good in more-populated counties, except for the big-city Industrial Metropolis counties, where unemployment sits just above 10 percent. Unemployment remains high in those counties because of the large numbers of poor who live alongside the wealthy there.
That is, the recovery — such as it is — is uneven within those places. In the poor struggling areas, there isn’t much relief, but in the downtown high-rise condos and near-in leafy burbs, the economy is starting to move.
But in other less-populated places, the hard times are more uniform. There are several of our 12 county types that still have unemployment rates above 10 percent — some far above. The three highest unemployment rates are in the Latino-heavy Immigration Nation counties, the Minority Central counties with large black populations and the small-town Service Worker Centers.
Some differences in unemployment are to be expected, of course. One of the primary points of Patchwork Nation is national numbers on unemployment or foreclosures — or most anything really — are abstractions. What actually matters is what you experience in the day-to-day life of your community.
But these numbers combined with some recent trends coming to light in the newest set of Census data raise some serious questions about the long-term prospects for some places — particularly the more far-flung locales.
The Growing Split
The three county types that are seeing the highest unemployment rates, for instance, share some common traits. They are poorer, in terms of median household income, than most places. They tend to be less educated as a whole. And they are further away from big cities.
They are, in other words, poorly set for the direction the American economy is headed — where skills and education will be key and gasoline will be expensive.
In recent weeks, several pieces have been written in the mainstream media about early trends in the Census. A story in USA Today on April 1, noted that it is increasingly likely that college-educated 25- to 34-year-olds were moving into densely populated areas around the nation’s biggest cities — even around Detroit. And a New York Times story from Tuesday noted a similar trend. Its headline: The Value of Urban Clustering. The trend, writes the author, “reflects the fact that globalization and new technologies have increased the returns to being smart and that we get smart by being around other smart people in cities.”
Patchwork Nation has certainly seen this on our trips around the country — be it in Center City Philadelphia or midtown Detroit where the upscale grocery Whole Foods is reportedly considering opening a store.
Of course, talk of an urban/rural divide is not new. More than a few essays have been written on the subject. And Patchwork Nation would note, urban/rural misses the point. There are some rural communities in America that are doing well overall.
Tractor Country and Mormon Outpost counties, the least-densely populated of all 12 county types, both have very low unemployment rates. Why? Because agriculture still sits at the heart of those economies and, as we noted often on this blog, economies based on agriculture have missed a lot of the pain of this recession. Even in a recession, food sells.
Beyond those counties though, if it is true that the areas around big cities are growing bigger and smarter, then the smaller communities already suffering in these February unemployment numbers should be prepared. The coming months will tell, but it may be that their road back to “normal” is very long and very complicated indeed.