There’s nothing inevitable about the degree of spatial inequality in the United States and policymakers have failed to deliver solutions to meaningfully address it.
Some gaps between places are natural, but the scale of the disparities, speed of the collapse in some places, and longevity of distress in others are phenomena that have been exacerbated by policy myopia and neglect. Decision-makers have broadly overlooked the geographic ramifications of trade, competition, and deregulation policies.5 Prevailing economic models have blithely assumed that local economic transitions could proceed seamlessly. As a result, domestic economic development has been underfunded, its work an afterthought. The established toolkit has largely failed to help large swathes of the country successfully navigate technological disruptions and economic change. It has also failed to incubate growth in deeply distressed areas over decades.
The United States must learn from the past 20 years of economic disruptions—from the China trade shock to digitalization and the pandemic—to fortify local economies to better withstand whatever lies ahead. Achieving the Biden administration’s climate goals, for example, will require disruption, perhaps on an unprecedented scale. The nation cannot afford to confront that transition with the same hands-off approach of the recent past that had the federal government largely stand by as the country’s manufacturing belt hollowed out, for example. The federal policy stance vis-à-vis regional economic transitions must shift from too little, too late (e.g., Trade Adjustment Assistance) to a more proactive, anticipatory stance that helps communities adapt before they decline and find opportunity in economic change.