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2016: A Year Defined by America's Diverging Economies

In many ways, 2016 has been the strongest year, economically, since the mid-2000s, or even the late 1990s. Unemployment was low. Wages were increasing. The markets hit new highs. Consumer confidence rose. Yet Donald Trump unseated the incumbent party and won the presidential election promoting economic pessimism and promising restoration: He swore to Make America Great Again, describing the country as falling behind, workers as jilted, growth as anemic, and the current period of expansion as a sham.

How could a message like Trump’s take hold in an economy like that? The answer is that it did not take hold with everyone—or, more to the point, everywhere. In ways that have been overlooked and under-appreciated for years, the strength of the post-recession recovery has varied dramatically not just from income bracket to income bracket, but from place to place as well. And it so happens that the places left behind are also places that wield outsized political power—enough power to vault the loser of the popular vote to the presidency and to make the economic story of 2016 more about stagnation, failure, and the dissolution of the American dream than it was about the headline economic numbers…

Race and ethnicity play into the geography of the recovery too: Black and Hispanic families are more likely to live in urban areas than white families, and their representation in the workforce has grown through the recovery.  As of 2015, there were 66 million white prime-age workers with full-time jobs, down from 72 million in 2007 . In contrast, according to Department of Labor data, the number of black prime-age workers with full-time jobs remained roughly the same; for Hispanic and Latino workers, it grew to 15 million from 13.6 million. More than half of the job gains since late 2007 have gone to Hispanics, who make up 14 percent of the labor force; 29 percent of the job gains went to Asians, who make up 5 percent of the labor force; and 25 percent of the job gains went to blacks, who make up 11 percent of the labor force, according to an analysis from the Economic Cycle Research Institute, a nonpartisan think tank. Demographic changes—specifically, the workforce becoming less white—explain much of the shift. But “part of the reason may be that these jobs, predominantly in [the service sector], were created in metropolitan areas, rather than in rural areas and small towns where factories were shuttered and the manufacturing jobs disappeared,” the report concluded...


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