Big Tech vs. Flyover Country

An update last week at the Real Time Economics Blog (The Wall Street Journal), stated that, “ and Google’s decisions to add tens of thousands of jobs to New York and the Washington area reflect a growing divide in the U.S. A few big cities, particularly on the coasts, are soaking up high-tech talent and are also becoming wealthier, more liberal and more ethnically diverse—shifting the economic, political and cultural landscape of the nation, Shayndi Raice and Janet Adamy write.

Smaller cities are also pulling in educated workers, but are having trouble competing for the nation’s most prized jobs and biggest projects, while rural areas are falling behind.”

The Journal indicated that, “As global competition dried up manufacturing jobs in small towns, the U.S. became more dependent on the growth of knowledge and service jobs that tend to proliferate in dense places. Five cities—New York, Chicago, Dallas, Houston, San Francisco—accounted for a third of all Fortune 500 headquarters and half of Fortune 500 firms’ profits last year, according to the University of Toronto’s Richard Florida. The Washington area, which had just four corporate headquarters in 1975, was home to 17 last year. New York had 70, more than any other U.S. city.

“In the past 10 years, employment in U.S. cities has grown 7% and the number of businesses has grown 11%, while employment has contracted in nonmetro areas and the number of businesses there has barely changed.”

In its annual Rural America at a Glance publication, the USDA’s Economic Research Service (ERS) pointed out that, “Since peaking at 10.3 percent in 2010, the rural unemployment rate steadily declined to 4.4 percent in 2017; urban areas followed suit, with unemployment dropping from 9.9 to 4.1 percent.”

However, ERS also pointed out that, “Although urban (metro) and rural (nonmetro) unemployment rates have declined at a similar pace since their peak in 2010, and both are now below their pre-recession levels, growth in employment has been slower in rural areas. Urban employment has grown steadily at about 1.6 percent per year since the fourth quarter of 2009 and had risen 8.2 percent above its pre-recession level by the second quarter of 2018. Rural employment has grown at about 0.5 percent per year, with periods of stagnation (2012-13 and 2016). Estimated rural employment in the second quarter of 2018 was still 1.8 percent below its pre-recession level. Rural America includes 14 percent of the Nation’s population but has accounted for only 4 percent of employment growth since 2013.”

This entry was posted in Start-up Company Law. Bookmark the permalink. Both comments and trackbacks are currently closed.