How Globalization Isolates Struggling Cities
Troubled post-industrial places need help building better connections with more successful cities.
Who could argue against making things better? It seems absurd. So why is it so hard to make progress? One reason is that there are often structural forces that act to suppress improvement. One force in particular is the increasing divergence in attractiveness and performance between communities.
Ball State University economist Michael Hicks, writing in Howey Politics Indiana, elaborated on the problem: “Almost all our local economic policies target business investment and masquerade as job creation efforts. We abate taxes, apply TIFs [tax increment financing] and woo businesses all over the state, but then the employees who receive middle-class wages (say $18 an hour or more) choose the nicest place to live within a 40-mile radius. So, we bring a nice factory to Muncie, and the employees all commute from Noblesville.”
This tells you everything you need to know about why Indiana’s state government has traditionally been hostile to efforts by localities to improve quality of place, whether through mass transit or through public services such as new libraries and better performing schools.
To the extent that a place like the Indianapolis suburb of Noblesville continues to improve itself, this only increases the advantages it has in luring residents and jobs away from struggling post-industrial communities like Muncie that have fewer resources to rebuild with and are further out from the urban center. This dynamic is hardly unique to Indiana.
Struggling places that surround prosperous communities may not be interested in seeing those successful towns improve any further. That’s not necessarily out of malice, nor may it even be explicitly considered. It’s simply an implicit incentive, and has a certain amount of logic. If those struggling places constitute an influential block in the state legislature, they can certainly put roadblocks in the way of community improvement efforts that would only fuel the divergence that puts their city increasingly at a disadvantage. This creates a structural barrier to change.
Removing this barrier requires a type of thinking and bridge-building that has fallen by the wayside in the contemporary economy, namely restoring connectivity between thriving cities and their broader but less-well-off hinterlands.
In the age of globalization, cities and states would rather build bridges to the world than to the town next door. Some of this is simply the way the economy works. As Richard Longworth, senior fellow at the Chicago Council on Global Affairs, wrote in his book Caught in the Middle: America’s Heartland in the Age of Globalism, “Chicago probably deals more, daily, with Frankfurt or Tokyo than it does with Indianapolis.”
He went on to identify the problem at hand, noting that “Globalization is beginning to isolate cities from their hinterlands: The hinterlands see this trend and are disinclined to do anything to speed it up. They perceive that most of these people—globalization’s winners—have never spent 30 seconds worrying about globalization’s losers.”
This is the two-tier society we see developing nationally playing out at the local level. It creates a tug of war at the state policy level, and it tears apart the whole notion that we are a commonwealth. It creates states that are, as Longworth put it, “hives of warring interests.”
There are no easy answers for many of the struggling post-industrial cities in America. Many places realistically may not recover, particularly if they are too far from a metro center or too far into decline. But we can have more successful places than we do. One obvious challenge for smaller areas is that they are cut off from global flows and economic opportunities. Building stronger links to their neighbors that are connected is critical. That’s their potential on-ramp to globalization.
What’s needed is a new bargain in our states and regions. Larger metros and thriving regions will be given the authority, tools and financing they need to improve themselves and meet the demands of today’s globalized, talent-based economy. In return, they will be expected not just to send back tax “remittances” to the rest of their state, but also to deploy some of their intellectual and policy resources toward the problems facing the left behind areas. The losers need to let the winners get on with their winning, while the winners need to remember where they came from and who brought them to the dance.
Creating those connections won’t be easy. But it starts with a conversation, with getting to know each other, building trust and creating commitment. That’s not as sexy as an overseas trade trip. But if the winners want to get the losers on board with state policies that promote civic improvement instead of fighting every step of the way or trying to steer the course toward a race to the bottom, this is something they very much need to do.