The United States evidences a staggering economic polarization, with jobs growing at both ends of the social scale, but evaporating in the middle. Whether Wall Street speculators and New York corporate executives, Silicon Valley entrepreneurs or Hollywood entertainment creatives, they are going from strength to strength. Nor are electricians or plumbers short of work. It is the broad middle class situated in the middle, and identified with the factory industry, that has foundered.
This polarization of jobs is in turn identified with a regional polarization. While the coastal cities show great dynamism, the inland country is plunged into a spiral of deterioration. New York, Boston, San Francisco or Los Angeles prosper. However, Pittsburgh, Detroit and Cleveland have entered a phase of increasing deterioration.
As the Berkeley scholar Enrico Moretti has pointed out, structural changes in the economy favor those who are more educated and educated, that is, those who identify with knowledge-intensive industries. These industries that are located around the large coastal cities and that become attraction magnets for the most qualified. This generates a virtuous circle that reinforces the privileged character of these urban centers. Of course, as dynamic cities, these nuclei also demand more services on the lower scale of social polarization: masons, plumbers, electricians, etc.
Meanwhile, employment is languishing in the inland country. Particularly in the so-called rust belt of the Midwest, where the American manufacturing emporium was located. The social gap between the coastal cities and the most deprived areas of this rust belt is growing by leaps and bounds. According to a Harvard study, life expectancy in cities like New York, San Francisco or Boston is 15 years longer than in these depressed areas. Smoking, alcoholism, opioids or suicide, identified as epidemics in social strata overwhelmed by unemployment, hopelessness and lack of opportunities, are responsible for this gap.
Reviving the country inland has therefore become a priority on the US political agenda. During his tenure, Trump tried to do it by turning back the clock. By declaring globalization as guilty of all the social ills of his country, and trying to reverse it with tariffs and trade wars, he misdiagnosed. The problems caused by globalization not only represented the past, but were already irreversible. The problem today is not the jobs that are lost to emerging economies, since those are long gone, but those that are lost to virtual economies. That is, before digital technology and automation. In his quest to recover for his party the working-class sectors that flowed to the Republican side, Biden has also remained within the route of protectionism and economic nationalism.
Much more valid as a proposal, it is the one that has been taking shape in the face of the inevitable return of US companies that already find it cheaper to produce at home. As Finbarr Livesey pointed out, thanks to automation and digital technology, the total cost of production per hour in the developed world is 5 euros, compared to 9 represented by intensive labor in China (From Global to Local, New York, 2018). From this point of view, the factories that return should be installed in the cities and deprived localities of the interior.
It could well be argued, of course, that this move from emerging economies to virtual economies does not bring many benefits in terms of reviving jobs. The new automated factories do little to revive lost blue-collar jobs in places like Albany, Janesville or Dubuque. However, they would be able to inject new energy into these in many other ways. It is the logic of the virtuous circles that the main coastal cities show today. Indeed, much of this declining inland country is home to some of America’s most prestigious universities, which could seek to replicate Stanford’s role as promoter of technology-associated productive swarms.
In any case, the crisis of the supply chains brought by covid and the return of geopolitics brought by the war in Ukraine and the rivalry with China, have consolidated the twilight of globalization. The return to the United States of the manufacturing capacity that in the past flowed to China and to the cheaper labor economies, is already a reality. The robots are ready to welcome him. This being the new state of affairs, it would be precisely the moment to direct the implantation of this productive capacity in the inland country.