Transcript The Rust Belt in the New International Division of Labor

The Rust Belt in the New
International Division of Labor
Proposal for Change to Reduce
Inequity and Enhance Economic
Potential
Source: Cillizza, 2009.
The Spatial Restructuring of Deindustrialization,
or Why it's called the Rust Belt
Milwaukee:
19%
Picture Source: Hansen, Bryant, & Spencer, 2007. Data Source: Authors' analysis of U.S. Census Bureau Data.
Source: Wial
& Friedhoff,
2006
Source: TIP Strategies, 2010.
• Metropolitan areas (logical cities) in the Rust
Belt are not declining
Central Cities
1800000
Metro Areas
4500000
1600000
4000000
1400000
3500000
1200000
3000000
1000000
2500000
800000
2000000
600000
1500000
400000
1000000
200000
500000
0
1960
2007-8
Source: Author's Calculations from U.S. Census Data
0
1960
2007-8
Examples of White Flight
Baltimore Demographic Trend (1950-2007)
800,000
700,000
600,000
500,000
400,000
Whites
300,000
Blacks
Source: Author's
Calculations
based on Levine
2000 and U.S.
Census data.
200,000
100,000
0
1950
1960
1970
1980
1990
2000
2007
Source: Ostara
Publications,
2005.
Including capital gains
50%
Top 10% Income Share
45%
40%
35%
30%
Source: Saez & Piketty, 2003, with updates by Saez through 2007.
91
86
81
76
71
66
61
56
51
46
41
36
31
26
21
16
11
6
1
25%
Source:
Kruse, 2008.
and
Thompson,
2009.
Social Capital: "The
norms and social
relations embedded
in the social
structures of
societies that enable
people to coordinate action to
achieve desired
goals" (Grootaert,
1998).
Chart Source: Gini vs
Social Capital in the
USA, 2010.
Index of 14 measures including
* % attended meeting on town or school affairs
* % agreeing that "most people can be trusted,"
* mean presidential election turnout, etc.
Log of social welfare expenditures as a percent of
GDP
4.00
ln(expenditure) = 0.3289 ln(GDP)
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
0.00
2.00
4.00
6.00
8.00
10.00
Log of GDP per capita (constant 1995 US$)
Source: Smeeding, 2007.
12.00
Source: Ben-Naim, 2006
Source: Isaacs, 2008
What Should Milwaukee do?
Increase Economic Capital?
• Good:
• Addresses problem directly
• Bad:
• Limited or no political support at the local level
• Transfer payments may yield low rate of return - thus a bad investment of
scarce resources
Increase Social Capital?
• Good:
• More politically tenable
• Potentially better return on investment
• K-12 education and public health investment studies cite ROI's from
good to fantastic
• Bad:
• Less immediate poverty reduction
• Still limited political support and infrastructure
Source: Demographia, 2010
23 - Milwaukee
27 - Vienna
32 - Cleveland
34- Paris
35 - Detroit
40 - Baltimore
44 - London
46 - Cincinnati
60 - St. Louis
67 - Toronto
Political Fragmentation
Source: Razin & Rozentraub, 2000.
Proposal
• Milwaukee should work towards Regional
Cooperation in order to enhance social capital
• Expand and share local property tax bases
• Leverage economies of scale to reduce service
expenditures per person
• Access greater federal and state funding with
a larger population count
• Create positive momentum
Reasons for Optimism
• Rust Belt cities are...
– Dense
– Huge amounts of fresh water and fertile land
– Ready for expansion
– Strong Identities, histories of good government
– Positioned for manufacturing growth
– Health Care is already set to improve
Bibliography
Ben-Naim, E., Vazquez, F., & Redner, S. (2006). Parity and Predictability of Competitions. Journal of Quantitative Analysis in Sports, 2, 4, 1.
Cillizza, C. (2009, August 18). Rust Belt Revival. Washington Post [Online Version], retrieved 2 May, 2010 from
http://www.cpr.maxwell.syr.edu/faculty/smeeding/index.html
Demographia. (2010). GDP per Capita, Top 100 World Metropolitan Areas. Retrieved May 5, 2010 from
http://www.demographia.com/db-intlmetgdp2005.pdf
Garfinkel, Irv. (2009, June 23). Wealth and Welfare States: Is America a Laggard or Leader? Retrieved April 10, 2010
fromhttp://www.hks.harvard.edu/saguaro/manchester/workshop2009/Readings%20/Irv%20Garfinkel/GarfinkelSummer%
20School%20Lecture%205%2027%2009.ppt.
Gini vs social capital in USA, (2005, December 3). In Wikipedia, the free encyclopedia. Retrieved May 3, 2010, from
http://en.wikipedia.org/wiki/File: Gini_vs_social_capital_in_USA.jpg. Data used in chart is from based on U.S. Census,
1999 Income Data, Table S4: Gini Ratios by State, available from
http://www.census.gov/hhes/www/income/histinc/state/state4.html and 14 state-level measures of social capital from
Putnam, R, 2000, Bowling Alone: Collapse and Revival of American Community, New York: Simon & Schuster.
Grootaert, C. (1998). Social Capital: The Missing Link? Social Capital Initiative Working Paper #3, World Bank.
Hansen, J., Bryant, J. & Spencer, T. (2007, March 10). Which Way Forward? Birmingham News [Online Version], retrieved 2 May, 2010
from http://blog.al.com/bn/2007/03/which_way_forward.html
Holton, N. (2010, March 8). Race Matters in Milwaukee. Retrieved 4 May, 2010 from
http://themilwaukeedrum.wordpress.com/2010/03/08/race-matters-in-milwaukee-the-effects-of-milwaukeessegregation/
Isaacs, J. (2008). Getting Ahead or Losing Ground: Economic Mobility in America. Washington DC: The Brookings Institution.
Kruse, M. (2008). Social Indicators 2007. Retrieved 5 May, 2010, from
http://krusekronicle.typepad.com/kruse_kronicle/social_indicators_2007_series/
Lampman, R. (1984). Social Welfare Spending: Accounting for Change 1950-1978. Orlando, FL: Academic Press.
Levine, M. V. (2000). “A Third-World City in the First World”: Social Exclusion, Race Inequality, and Sustainable Development in Baltimore.
In Polesi, Mario and Richard Stern (Ed.), (pp. 123). Toronto: Toronto University Press.
Bibliography, cont.
Ostara Publications. (2005). Appendix 1: The Multi-racial Decline of Cities in the United States of America - A Photographic Essay.
Retrieved 5, May 2010 from http://www.white-history.com/hwrdet.html
Razin, E. & Rozentraub, M. (2000). Are Fragmentation and Sprawl Interlinked? North American Evidence. Urban Affairs Review, 35, 821836.
Saez, E. & Piketty, T. (2003). Income Inequality in the United States, 1913-1998. Quarterly Journal of Economics, 118, 1, 1-39. Updated
version with figures through 2007 retrieved 15 April, 2010 from http://elsa.berkeley.edu/~saez/
Smeeding, T., Garfinkel, I & Rainwater, L. (2007, June 5). A Re-examination of Welfare States and Inequality in Rich Nations: How In-Kind
Transfers Indirect Taxes and Income from Wealth Change the Story. Retrieved 1 May, 2010 from http://wwwcpr.maxwell.syr.edu/faculty/smeeding/index.htm
Thompson, K. (2009, December 24). Black men hit hard by unemployment in Milwaukee. Washington Post [Online Version]. Retrieved 2
May, 2010 from http://www.washingtonpost.com/wp-dyn/content/article/2009/12/23/AR2009122302550.
html?hpid=topnews
TIP Strategies. (2010, April 7). Geography of Jobs. Retrieved 1 May, 2010 from http://tipstrategies.com/archive/geography-of-jobs/.
Wial, H. & Friedhoff, A. (2006). Bearing the Brunt: Manufacturing Job Loss in the Great Lakes Region, 1995–2005, Metro Economy Series.
Washington, DC: The Brookings Institution.