It’s not just economic inequality, the gap between rich and poor people, that’s growing wider in America. Spatial inequality, the gap between rich and poor places, is growing too. The most obvious example of spatial inequality is the decline of rural areas and the rise of cities. Can rural America be saved? And is urban America obligated to do the saving? Journalist Eduardo Porter and author Sarah Smarsh weigh in.
Eduardo Porter is an economics reporter for the business section of The New York Times, where he was the Economic Scene columnist from 2012 to 2018. He is the author of ‘The Price of Everything’ and is working on an upcoming book called ‘American Poison’.
Sarah Smarsh is the author of ‘Heartland: A Memoir of Working Hard and Being Broke in the Richest Country on Earth’, which became an instant New York Times bestseller and was a finalist for the 2018 National Book Award. She has covered socioeconomic class, politics, and public policy for The Guardian, The New York Times, and many other publications.
The Hard Truths of Trying to ‘Save’ the Rural Economy: https://www.nytimes.com/interactive/2018/12/14/opinion/rural-america-trump-decline.html
Country pride: What I learned growing up in rural America: https://www.theguardian.com/us-news/2018/sep/06/country-pride-kansas-rural-america-sarah-smarsh
America’s Worsening Geographic Inequality: https://www.citylab.com/equity/2018/10/americas-worsening-geographic-inequality/573061/
The Contribution of National Income Inequality to Regional Economic Divergence: https://academic.oup.com/sf/advance-article-abstract/doi/10.1093/sf/soz013/5418441
The Economic Innovation Group’s 2018 Distressed Communities Index: https://eig.org/dci
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Eduardo Porter: We have places of enormous prosperity and enormous productivity growth and places that have been, so to speak, left behind.
David Goldstein: In the last couple decades, rural has become a synonym for poor.
Sarah Smarsh: I grew up helping raise the wheat and cattle and pigs that went on to be on the plates of families more well-off than mine.
Nick Hanauer: Of the nation’s 53 largest metro areas, that represents just 2% of all the places in America, but those places saw 75 to 80% of all the employment growth in the country since 2008.
Speaker 6: From the offices of Civic Ventures in Downtown Seattle, this is Pitchfork Economics with Nick Hanauer, a pointed conversation about who gets what and why, with one of America’s most provocative capitalists.
Nick Hanauer: I’m Nick Hanauer, founder of Civic Ventures.
David Goldstein: I’m David Goldstein, senior fellow at Civic Ventures. So, Nick, we talk a lot about inequality in our office, how it’s been rising over the past 40 years. And usually when people hear about economic inequality, they think about it as inequality between people, between say you at the very top and me in the middle and, I don’t know, some guy who works for Howard Schultz down at the bottom.
But in fact, there’s another kind of inequality that’s been growing in America, which goes by the kind of wonky name spatial inequality or geographic inequality, rising inequality between geographic regions, between poor states and rich states, between rural areas and urban areas. In fact, in the last couple decades, rural has become a synonym for poor. Explain what’s going on here.
Nick Hanauer: Yeah. So one of the really corrosive things that’s happened to the economy over time is that for a variety of both bad and good reasons, almost all of the wealth is concentrating into cities.
David Goldstein: Like Seattle.
Nick Hanauer: Seattle is a great example of that. And that is making rural places, places that are not cities, poorer and poorer. And there are all these really terrible feedback effects, among them that as the folks in those places get poorer, that depresses real estate values, which of course makes people poorer. But it also limits not only their economic mobility but their physical mobility because if you own a home in a rural area that’s worth $40,000, you can’t even put a down payment down on a one-bedroom apartment in Seattle today for that practically, right? It’s so expensive to move.
David Goldstein: So you’re not just saying that cities like Seattle and San Francisco and New York are booming while much of the rest of the country is being left behind. You’re saying that the economic forces that are driving the economic boom in places like Seattle, they’re actually impoverishing swaths of rural and exurban America.
Nick Hanauer: Yeah, for sure. I mean and some of it was what my brother, who runs the Seattle Sounders, would call an own goal. That is to say we shot ourselves in the foot with policy. And a great example of that was allowing unlimited amounts of corporate concentration, because in the day, there were tons of important regional companies that propped up the economic vitality of non-urban places, right? Every region in the country used to have a local retail chain that there were dozens of them, probably at some point in the past hundreds of them. And all of them got consolidated out. They all got smashed by Walmart and now Amazon or whatever it is.
But there were regional manufacturing companies. There were family farms. There were all these things. And in the pursuit of the neoliberal version of efficiency, we allowed all of that corporate concentration to take place without recognizing that it would essentially eviscerate all of these smaller places. So that was a policy choice that we made that was an own goal. And-
David Goldstein: And the other side of it’s just economics in an information economy. There are certain things about information equality that function differently than an industrial economy, which leads to this what they call the agglomeration effect in these superstar cities where these companies, employers need to be around where all the high-tech, highly educated workers are. And these highly educated workers need to be around where all the high-tech jobs are. And that sucks all of the wealth into the cities and-
Nick Hanauer: Right, leaves everybody else behind.
David Goldstein: … leaves everybody else behind. Nick, when we respond to people criticizing the $15 minimum wage in Seattle calling it a job killer, we like to point out Seattle in the metro area is number one in job growth. It’s number one in wage growth. We’re one of the fastest-growing cities in the nation. And that’s great. But it turns out it’s not just Seattle where that’s happening. All of the growth is happening in a handful of cities.
Nick Hanauer: Right. Of the nation’s 53 largest metro areas, that’s people with more than a million people, that represents just 2% of all the places in America. But those 53 places saw 75 to 80% of all the employment growth in the country since 2008, which tells you a lot about the dynamics of the economy.
David Goldstein: And in fact, most of the counties in the country still have not recovered from the Great Recession, whereas we’re going gangbusters. So that gives you that flavor of where economy looks great here. The numbers are great in the aggregate. But in much of America, people aren’t seeing it.
Nick Hanauer: Yeah, so another kind of astonishing fact about this increasing spatial inequality is that prosperous ZIP codes added more businesses since 2008 than the bottom 80% of ZIP codes combined. And it just shows you where all of the economic growth is and where it’s not.
David Goldstein: Right. And I think I saw some statistic a couple years ago that said if you took the West Coast and separated it out from the rest of the country, there would’ve been no GDP, aggregate GDP growth over the last 10 years. And that’s mostly happening in Los Angeles, San Francisco Bay Area, Portland, and Seattle.
Nick Hanauer: Yeah. And the population growth statistics reflect that. The U.S. has grown by approximately 75 million people since 1990. But virtually all of that growth has taken place in cities and suburbs. And not surprisingly, since the 1990s, problems like crime and opioid use, things associated with poverty that used to be mostly problems of urban areas are increasingly a rural phenomenon.
David Goldstein: Right. So you and I, Nick, living here in Seattle, we have a lot of experience with the upside to the current economic system, all the prosperity that’s happening in these cities. To learn a little more about what’s happening in most of the rest of America, at least geographically, I talked with Eduardo Porter of the New York Times-
Nick Hanauer: Yeah. One of our favorite writers.
David Goldstein: … right, about growing spatial inequality and its impact on rural America. Eduardo?
Eduardo Porter: Speaking.
David Goldstein: Hi. This is David Goldstein at Civic Ventures.
Eduardo Porter: Hi. How are you doing?
David Goldstein: Okay. Thanks for joining us today. Can you hear more okay?
Eduardo Porter: I can, yes.
David Goldstein: Great. So tell me about the book you’re writing.
Eduardo Porter: I have a book coming up called American Poison, about how race has distorted the American social contract and essentially defeated the American dream.
David Goldstein: Wow. I look forward to that book. So could you give us a little background on spatial inequality, what it is, and how life in rural America has changed over the past couple decades?
Eduardo Porter: Well, spatial inequality is I think something that has fairly recently come to the attention of economists and other social scientists. I mean, indeed, inequality itself was often ignored in economic research. And I would say that only maybe within the last 10 years, and even more recently, has it become kind of like a focus of economic policymaking and economic papers and research projects.
And the geographic component of it is, to my mind, one of the newest that the distribution of prosperity across the country is of course not homogeneous. We have places of enormous prosperity and enormous productivity growth and places that have been, so to speak, left behind. And to put it schematically, the parts of the country that have done well are the parts that have been able to hitch on to the new IT-based industries. And the places that have not done well are the places that have not been able to attach themselves to this.
And so this has created a big divide that is only getting starker and starker because the regions that are plugged into the IT revolution, as it were, artificial intelligence and so on, are actually just a few very large, very successful cities. And most of the rest of the country is struggling to think of a strategy about how they can play in this game. And it’s not clear what that strategy would be. Rural America in particular, which is the home of, I don’t know, 50, 60 million people, is particularly in a bad spot in this dynamic because there is really very little reason for any of this IT-heavy economy to go to rural America.
The IT economy really, really depends on high-skilled, highly-educated workers. And it finds those in big cities, not in small towns or in rural areas. In fact, if there are highly-educated people coming from smaller towns, they tend to gravitate to big cities too. So big cities are the place where this IT economy is really taking shape. And the smaller places, the less-dense places have been unable to find a way to attach themselves to the contemporary economy.
David Goldstein: In your piece, you talk about I think the quote is the inescapable reality of agglomeration. And Enrico Moretti in his book The New Geography of Jobs points out that this economy, the knowledge economy is different from traditional economies in that there’s this inherent tendency toward geographic agglomeration. Can you explain a bit why that is, what’s so special about the knowledge economy that’s different from the old industrial economy that used to benefit rural areas?
Eduardo Porter: Okay, so let’s take a step back and start with the industrial economy. Industry, manufacturing is different from tech in that it really required a lot of workers. And the cost of labor was an important variable for manufacturing businesses. So the industrial economy that was still a big employer up to say the 1970s did have a use for less-skilled workers. And so it did have a use for a lot of the people that were living in small towns and rural areas. I mean if you think about it, we consider rural America the heart of agriculture, but most of the employment in rural America has been in manufacturing.
I mean you’ll find that perhaps sectors that depend on the government have more employees, like health and social services and whatnot that rely on Medicare and Medicaid spending, they might employ more. But say the first big private-sector employer in pretty much across the board was manufacturing.
But so then what happens? I mean as more of manufacturing leaves the United States and companies outsource much of their manufacturing to places like China, well then the big source of private employment for many of these places just went away. And the new American economy found itself relying more and more on IT-based services. And IT really does not need low-skilled workers. I mean or if it does, it goes and gets them in China. You think of Apple that manufactures, assembles most of its iPhones in China with Foxconn.
So the need of the IT sector in the United States is of highly skilled workers, which means workers that at least have a bachelor’s degree. And so those [inaudible 00:15:00] in big cities because they either went to school in big cities, or if they went to school somewhere else, they are going to end up going to big cities because that’s where the jobs are. And so there’s a positive feedback cycle where the businesses come to big cities because here is where they can find the highly skilled young people that they need to become their engineers and so on. And then the highly skilled people come here too because that’s where the jobs are.
You have tons of people and tons of different types of occupations and jobs to be had, so if you’re a business, you have a much thicker, denser, more varied labor force from which to choose your workers. If you’re a worker, you have a thicker, denser set of businesses to which you could offer your labor. So on both sides, there is much more opportunity. If you go to even a decent-size city but that relies on one industry, if that industry’s in trouble, you’re pretty much dead in the water.
David Goldstein: Right. So the knowledge economy doesn’t actually hold out that much hope for rural America. For decades, we’d heard about the promise of telecommuting in the knowledge economy. But it turns out that doesn’t really work. You need people, creatives in one spot physically.
Eduardo Porter: Well, yeah. That’s another very interesting finding from Enrico Moretti’s work that when you put one engineer or one biotech person in a cluster of other engineers or biotech people, this person will be much more productive than if he or she were in a place with fewer of these equally skilled workers. So the more of them you have together, the more productive they are. I guess it’s because they talk to each other at the water cooler or whatnot. Somebody invents something, and the neighbor in the next pod can think of some variant of that that’s even more interesting.
But evidently, yeah, the clustering of talent is very valuable. And so that kind of is a really good argument against telecommuting.
David Goldstein: So if the knowledge economy isn’t going to work in small towns and rural areas, can rural America be saved?
Eduardo Porter: Well, with the tools that we have available now, my diagnosis would be not really. I mean I was traveling at the end of last year through Appalachia a little bit. And [inaudible 00:17:28] country that used to rely on coal. And it was a part of the country that has always been very poor. It’s never been usually prosperous. But it had an industry.
Now, that industry is going away. And you really can’t see what they’re going to put in its place. It’s extremely frustrating, frankly, because you have a very good number of people there that really want to work, want a job and whatnot. But you don’t know what kind of job could plug them into the broader American economy.
And so what happens there is that more than half of the income of the residents in some of these counties in Appalachia that I was traveling through, half of their personal income comes from the federal government from place like Social Security, food stamps, housing subsidies. So it’s welfare broadly understood accounts for more than half of the income of folks in these places because there’s no real private source. There is no real economy plugged into the broader American economy.
So my short answer is I don’t know what can save rural America. I am not very optimistic. But one hopes.
David Goldstein: A basic income?
Eduardo Porter: Well, that’s a transfer, yeah. I mean the way that some of these communities survive now is from federal transfers. There’s one county, I can’t remember which one it is, maybe it’s Owsley County in Kentucky, where more than 60% of personal income comes from the federal government. I mean that’s an insanely high percentage. So, yeah, I guess if you take that to the extreme, you’re talking about universal basic income. But I don’t really know that the United States is ever going to have a government of the size it can provide a UBI of significance to all of its people. And I’m not sure that that’s what people in places like Appalachia really want.
David Goldstein: We’re in Seattle. You’re in New York. These are cities that are doing very well with the knowledge economy. But our housing prices are high, and that leads to the fact that Americans are not only less economically mobile than they ever were. You point out they’re also less geographically mobile. What do we need to do to actually increase that geographic mobility so people can move to where the jobs are?
Eduardo Porter: Well, yeah, that’s the $64 million question. There has been always this kind of trite recommendation. Go to where opportunity is. Go to the city. Go to where the jobs are. But as you point out, housing prices in these places, which are constrained by all sorts of zoning restrictions and so on, have risen a ton. And so it’s impossible if you are sort of a worker without a college degree that’s coming to the city for a fairly low wage, they’re going to be very difficult for you to afford housing. And so you’re going to end up living two hours away from your job, as many people in San Francisco end up doing. And that if you’re lucky because you could get pushed even further away.
So that seems to be not really a solution. And in fact, there’s some very, very recent research by David Autor of the Massachusetts Institute of Technology, who finds that even if you don’t include housing costs, the pay premium for people without a college degree that cities used to offer has pretty much disappeared. So in 1970, if you didn’t have a college degree, if you were in a big, dense city like New York, you could probably get a job with better pay. There were clerical jobs here to be had, working as an office assistant or gathering data or some sort of clerical position that paid better than say working at a 7-Eleven.
Well, apparently, all of those jobs or the vast majority of those jobs have been automated away or outsourced away, and then at the same time, the bottom-end jobs, the guy working at the 7-Eleven or at McDonald’s or a janitor in a big building, wages in those jobs, who also used to offer a premium in big cities over smaller places, those wages have also come down. So right now, there’s no benefit, it seems, from data from David Autor’s work, there is no real benefit to come to these big, dense cities if you don’t have a college degree.
David Goldstein: So we have maybe as many as 60 million people living in rural America. And we have a electoral system designed to over-represent them in the Senate and also in the House and in the electoral college. What’s the danger in that?
Eduardo Porter: Well, you said it, man. At one point, you could say, “Well, this problem is intractable. So it’ll shake out in some way. Maybe folks in rural America will move to the cities or something.” But if you think that way, it means that you’re thinking that the Senate is going to be run by a group of really, really pissed-off people who are in a part of the country who has not experienced any sort of economic progress for very, very many years.
And that I don’t think is conducive to very good politics because as you point out, no matter what the density of a particular state, it gets two senators. And so rural states have enormous power over our politics even though they don’t have that many people. And so this idea that the whole swathe of America is falling behind and yet holding this very important lever over policy and politics is kind of scary. And to put it more starkly, rural America has gone Republican pretty much decidedly just as the South went Republican after Civil Rights.
I would say that in the last, whatever, 10 years, rural America has also gone decidedly into the Republican party’s side. And I guess the takeaway for Democrats is if they can’t think of a way to increase prosperity in these places, these places will be lost to them. And so you have to think of a very long-lasting Senate Republican majority that’s held up by these rural voters.
David Goldstein: But can they? Because it’s the Republicans who actually oppose many of the policies that would end up benefiting rural America, at least the social safety net part of it.
Eduardo Porter: It’s true that Republicans tend to oppose the safety net that is keeping many of these communities afloat. And that is one of the great paradoxes of the United States because people in these places actually vote for the Republicans that then vote against the social safety net programs that these places rely on.
But, frankly, I think it’s premature to think that the solution to the bits of America that are left behind can only be about redistribution. So the idea that the labor market, which is how most Americans made a living throughout most of our history, has failed us and we’ve got to think about some big redistribution programs of a scale that we have never experienced as a way to keep some of these people and these places afloat, I don’t think we have to go there quite yet.
I think that even though I’m not very optimistic that there are obvious solutions, I do think that we have to hold on to the idea of productive work as the solution or as a first-order solution as the first place that we go and then look for ways to make productive work pay and to make work productive, so minimum wage increases, some combat against the monopoly power of companies. Some economists have suggested going to sector-wide wage setting as in many other industrialized countries where [inaudible 00:26:12] have a union that represents an entire sector negotiating wages that will apply across the country for many, many workers, so even if you have a low union penetration, it can work as an important floor under wages.
There’s other ideas about trying to, working to connect sort of medium-sized hubs to the big hubs. So you’re talking about not trying to revitalize Harlan, Kentucky, but maybe Columbus, Ohio, or something like that, and trying to plug that into the network of superstar cities. They have a fairly highly educated workforce. They have broadband internet. They have decent IT infrastructure that maybe could be … And if you get to these second-tier places and manage to connect them to the first-tier places, as it were, they might create an ecosystem of their own that could serve their local areas.
David Goldstein: Right. Well, re-regulating the airline industry so that these mid-size cities have service again might help.
Eduardo Porter: That could help too, exactly. Forcing your airlines to serve some of these places would certainly help. But, yes, I mean I think the idea, the high-level thought is about plugging into places that are left behind to the places that are successful. It’s about building networks.
David Goldstein: Right. Okay. Thank you.
Eduardo Porter: All right. Take it easy. Bye.
David Goldstein: Have a good day.
Nick Hanauer: I’m going to just take a little bit of an issue with Eduardo saying that we probably can’t save rural areas because I think we have to find a way to save rural areas. The problem with living in the United States of America, which is a country of vast geographic spaces, is that that creates a different political problem than they have, for instance, in a place like Germany, where you’re never farther than 30 minutes away from some big city. But the United States is not like that. There actually are places where it is impossible to commute to the city because it’s just so far away.
And the underlying dynamics of an increasingly technological economy that are driving spatial inequality, those dynamics are not an own goal. Those are things that are intrinsic to the way in which economies work. And I think it’s important to remember that, first, all prosperity and increases in welfare are a consequence of innovation but that innovation, in turn, is a consequence of combining old things in new ways, which, in turn, is a consequence of the number of people you have doing it and how different they are from one another and the ways that they do it. So it’s an evolutionary system.
And the reason that cities matter so much to prosperity is that’s where density and diversity is. And we now know that there’s a super linear effect that comes from increasing density. That is to say it’s not just that the more people there are in a city, the more innovation you get. It’s the more innovation you get per person.
David Goldstein: Right. It’s exponential.
Nick Hanauer: Yeah, it’s exponential. And that’s why big cities so massively economically outperform small places. In fact, it goes up by a factor of 1.15 times for every doubling in size. And so you end up in a circumstance where a big city is actually not different in degree but different in kind from a small place, which is just a super-hard problem to crack.
David Goldstein: Right. So Eduardo Porter says that rural America can’t be saved. The scaling effect within big cities seems to reinforce that idea largely because you can’t give rural America the density and diversity and increasing returns that you get in a city. But let’s make a distinction here. That doesn’t mean you can’t share the benefits that come from that sort of prosperity.
Nick Hanauer: Exactly. And we can find ways to recycle the prosperity that we create in cities to places that are not cities.
David Goldstein: Wow. That’s an odd idea. You mean like spending money raised in cities to, like the Tennessee Valley Authority and the Bonneville Power Authority and all of that New Deal spending that irrigated and electrified and built roads through rural America to help bring prosperity to it in the ’30s and ’40s and ’50s and ’60s and ’70s, right? That’s what we used to do.
Nick Hanauer: Yeah. And you can open universities and hospitals and all sorts of other things. But there’s this other incredibly simple thing you can do, which is you can require the giant corporations that are headquartered in all the cities to pay people that they employ in non-cities, in rural areas, decent wages, right? There’s no earthly reason why Walmart cannot afford to pay people even in rural Kansas $20 an hour. And if they did, those places would not be poor, because the truth is most people in these small towns today are not self-employed, and they are not working for small businesses. They’re working for giant multinational corporations.
David Goldstein: Right. So Eduardo Porter gave us a lot of the facts and theory about what’s going on in rural America. But to learn a little more about the lived experience, I’m really excited, Nick, to talk to Sarah Smarsh. She wrote the book Heartland: A Memoir of Working Hard and Being Broke in the Richest Country on Earth. And it was a New York Times Bestseller and a National Book Award Finalist. But more importantly, it was just one of my favorite books of the past couple years.
Nick Hanauer: Well, that’s enough for me.
Sarah Smarsh: Hey there. This is Sarah.
Nick Hanauer: Hey, Sarah. It’s Nick Hanauer.
Sarah Smarsh: Hey, Nick. [crosstalk 00:32:39]-
Nick Hanauer: Thank you so much for taking the time to chat with us. I hear you’ve taken a hiatus from interviews. So we’re very grateful.
Sarah Smarsh: Oh, thanks. I was stoked to receive the invitation. Been looking forward to it. And I was long ago an admirer of your viral Politico piece. So happy to connect.
Nick Hanauer: Thank you. Thank you so much. So, Sarah, you said in one of your interviews that you sort of began to understand the dynamics of inequality when you went to college, that you started figuring that out. Can you tell us a little bit of your story about how that happened, what unfolded?
Sarah Smarsh: Sure. So I am a first-generation college graduate. Actually I was the first person from my farm house to finish high school. I was largely raised by my grandparents on their farm. My mother did get her GED, but she was 17 when she became pregnant with me, a brilliant woman, but being a poor female meant limited possibilities, unfortunately for her in that regard.
My dad did finish high school, but he’s been a construction worker for decades since leaving farming life. And so that moment of packing up my beater car and driving to the University of Kansas three hours away from the farm I had grown up on was really kind of the initial bridge moment of my life. And I understood that at the time that I was doing something no one from my family had done. And in fact, I had set out very specifically with that goal as a kid even having that in mind.
When you come from a background like mine, you can’t necessarily dream the biggest possible dream for yourself because you don’t even have the language to articulate the possibilities. So I was a straight-A student on the KU campus, and I literally didn’t know what graduate school was. So class is more than just income. It of course is all sorts of types of social and cultural capital and even just a vocabulary to navigate say finance or higher education.
And so it was a hard road to hoe, my family would say. I was always good in the classroom, but the real challenge for me was brushing up against systems and even just some middle-class iterations of American life that were utterly foreign to me. So it was a very lonely time. And where some students were having carefree spring breaks, those were the hardest years of my life in terms of just raw work and psychological wherewithal.
Nick Hanauer: How did you pay for college?
Sarah Smarsh: I did earn quite a few scholarships, just academic scholarships when I graduated from my tiny rural high school. There were about I think maybe 65 kids in my graduating class. And then I also held at any given moment one to three jobs to pay my living expenses. And what I had coming in didn’t always cover just even basic necessities. So one of the wild ironies I’ve sometimes contemplated about inequality in this country is I grew up helping raise the wheat and cattle and pigs that went on to be on the plates of families more well-off than mine. And when I was a college student, I myself experienced food insecurity by way of lack of funds.
So I at times was a 19- or 20-year-old kid literally stealing food out of grocery stores. And I had grown up doing the back-breaking work that helped grow that food.
Nick Hanauer: Yeah. Interesting. So we think that your life’s work, this sort of mission and journey that you’re on is so important because it’s a direct assault on the dominant narrative of our time, which is neoliberalism, which basically teaches people in our country that the reason you’re poor is because you’re lazy, you’re stupid, and you deserve it, more or less, right-
Sarah Smarsh: Sure.
Nick Hanauer: … that your poverty, your difficulty, your challenges are a product of your individual deficiencies, not the consequence of a set of cultural and institutional forces, which have I mean shaped a lot of that outcome. And your story is sort of about awakening to the fact that that’s kind of a lie.
Sarah Smarsh: Mm-hmm (affirmative). Indeed. So first of all, let me say that I never in a million years would’ve thought of myself as poor when I was a kid. And there’s some beautiful things about that, but more importantly, I think it’s kind of a commentary on the lies that we tell ourselves about the class structure in this country that I was so unaware of the extent to which my own family was being screwed.
Now, when I started waking up to that, whether it was on a college campus or in professional environments to beyond, it was, as you say, kind of a revelation to understand those big systems that we kind of hopelessly couldn’t understand when we were just being ground down at what we might think of as the bottom of the economic chain by day-to-day labor, lack of information sources. There are myriad reasons why the people on whose backs the wealth is created often have the least agency to effect change about it.
But one piece of that essential awakening process is, as you say, understanding that the shame that you might carry somewhere deep down, even if you walk with great pride, as my family does, any person who’s grown up in poverty has experienced at least a keen awareness of the way that they’re perceived by middle-class or upper-middle-class America. And you see that being portrayed in popular culture as bucktooth, backwards buffoons or even in the news media, just a disconnect between the very language that they are using while interviewing policymakers to pontificate about your reality. And you don’t even know the words that they’re using because you haven’t had a chance to learn them.
When you realize that the shame’s being put on you as opposed to it being deserved or somehow just that your economic outcomes somehow relate to the hard work that you put in, it [inaudible 00:39:04] hard to see that the majority of people living in poverty in this country are damn hardworking and creative people. The vast majority of people who are on public benefits are also working as much as they can. And the people who I know would much rather be just paid a dignified wage than have to apply for some program.
So, yeah, that sort of teasing out, where does the line of the individual story, which the United States historically loves to put its emphasis on, and where the bigger picture of policy and culture and narratives begins, that’s where an awakening is possible.
Nick Hanauer: Yeah. And it is complicated, right, because on the one hand, the narrative of individual effort and personal responsibility is legit and valid and valuable and something we want to treasure and encourage.
Sarah Smarsh: Yes.
Nick Hanauer: And it is useful for people to feel like, “No, I should work hard and try and make stuff happen for myself.” On the other hand, we are prisoners of dominant cultural narratives and products of giant institutional arrangements. And I think one of the really cool things, interesting and powerful things that you teased out was the Hobbesian choice that our political parties give people. On the one hand, the Republicans are all like, “Hey, pull yourself up by your bootstraps,” and, “Oh, it’s those immigrants that are taking your jobs.” And on the other hand, the best Democrats have been able to offer is, “We’re America’s vending machine, and you deserve our pity, and we will help you.” And neither of those narratives are very appealing to sensible people who come from that place, right?
Sarah Smarsh: Yeah. Well said. I was raised in what I would call a moderately conservative environment, which also had some socially liberal views mixed in. While I now identify as just an absolute, across-the-board, unapologetic progressive, there are aspects of what we might think of as old-school conservatism that I still carry with me and treasure and think are valuable and would be wrong to dismiss. And one of those is a sense of liberty that is for in particular someone growing up in a rural area well-earned to have a sense of healthy suspicion about a system so large as the federal government or programs that would have you pee in a cup to qualify to be a deserving recipient of welfare benefits.
So while I am for robust programs for the social good, I think that sometimes liberals who are well-meaning don’t realize they’ve never walked in the shoes of someone that would have to go ask for the help. And in the richest country on the planet, why can’t we have a system where you don’t have to ask?
David Goldstein: Again, I’m not super crazy stupid wealthy like Nick, but I’ve never been poor. But most importantly, I think neither Nick or I have ever spent much time in rural America. And I think there are obviously a lot of ways in which urban poverty and rural poverty are very similar. But I’m wondering if you could speak a little bit to how they’re different.
Sarah Smarsh: Sure. So I think a lot about place and where we kind of plant ourselves. And I think that there are a couple main differences between rural and urban poverty. One is rural folks tend to … This is a rather general statement. It’s not true across the board. But mostly they’re people whose families have been there a long time. Now, by long time, I’m speaking to a version of rural America that arose after our federal governments essentially sanctioned genocide of indigenous peoples. But I am a fifth-generation Kansas farmer descended from poor European immigrants.
And I guess what I’m saying is that the families that you will find at least historically speaking over the last century who are in rural America have been there for a long time, and, thus, their lack of proximity to various kinds of resources that have increasingly been urbanized is one of the unique challenges that they face. And then the story about them is, well, why don’t they just leave? Which is an incredibly condescending question that is probably a topic for a-whole-‘nother podcast.
Now, I will note that increasingly, rural America is being filled by immigrant families. That’s certainly true here in Kansas. In Western Kansas, we have a robust industrialized agriculture workforce in the meat packing plants. And that tends to be brown folks who have only been in that area for a generation or two.
Now, in urban environments, poverty is much more transient. Matthew Desmond, the sociologist, wrote an amazing book called Evicted about something that I see on my mom’s side of the family, who are a couple generations off the farm. They moved around just by out of necessity when they couldn’t make the rent payment or they were fleeing an abusive husband or … There’s something about urban poverty where you’re a little less tethered. And that comes with its own problems.
Now, I talked about proximity to resources and how these things relate. You can be transient in the city and that detaches you from community in some damaging ways. But at least there is greater opportunity to get some help from the local YMCA or various or a food bank or a shelter. Those sorts of resources do exist in rural America but are stretched much thinner. We like to think of ourself as kind of post-place in this digital era that we’re living in, in particular folks of a certain class, where you can just feel this sense of, “I work remotely, and I hop on a plane from point A to point B,” and place feels less like a reality.
But for people who are rooted in rural America, that’s the literal location where they reside is the difference between being able to access a hospital or not when you cut your foot on the farm or being able to apply for a job via the internet, which you can’t access in so many places.
David Goldstein: What should we do, in particular not just for inequality but for the kind of poverty that you’re really interested in, the poverty of non-urban places?
Sarah Smarsh: Yeah. Well, first, let me say that on that point about the reasons that people can’t get out, for some folks, they might feel trapped by those reasons. But for some people, even if they could leave, they wouldn’t want to because they love where they live. And the greater problem is not how to get them to a place with the resources but rather to renew the resources in the place that they’ve been tending for a long time. There are a lot of reasons that that’s in the best interest of everyone in this country. And some of those reasons are environmental.
So I live in a part of the country where mineral companies would love to get a hold of every inch of land that’s currently being held on to by small family farms, which have been going under for decades. But there’s natural gas to be fracked, and there’s … This is a vast swath of Earth, the United States. It is just geographically a large piece of land. And the majority of it isn’t urban space. It’s rural space. And I like to think of the people who are kind of holding on as potential stewards.
And one way that that could happen that excites me is if we thought about the Green New Deal as specifically an economic opportunity in rural America. There’s no part of the population more well-poised to kind of lead that mission statement with a born wisdom about the Earth that I don’t see why job investments and the long-overdue attention to climate change and other environmental concerns couldn’t overlap in some exciting ways.
So that’s specific to rural, but across the board, just to paint a bigger picture … And I should point out of course farmers and people who are directly connected to the Earth or the land in terms of their, let’s just say folks in agricultural industries don’t account for all of rural America by any means. And increasingly, the folks who live in small towns across this country are employed by major corporations. So my first job as somebody paying taxes … I was working long before age 16 on the farm of course, but my first job on the federal rolls was as a server at Pizza Hut on a rural highway going through the small town I grew up in. That town now has what is like an infamous symbol of rural America takeover, Dollar General.
There’s no Walmart there. It’s not big enough. But they’ve certainly made inroads in those places. So corporate America definitely has long had its claws into those environments. And for that reason, the policy shift that would help everyone urban and rural alike that I would most like to see is just pay people more damn money.
Nick Hanauer: Yeah, exactly.
Sarah Smarsh: Pay people more money. That’s about as simple as it gets. And the consternation over how to fix poverty, whether rural or urban, just strikes me as laughable and more of a sign of people truly being unwilling to fix it as opposed to it being said so vexing [crosstalk 00:49:14]-
Nick Hanauer: It’s not complicated. Pay people more. So what’s your next project? What’s your next thing?
Sarah Smarsh: I have more lately been developing a podcast on the same themes. It’s called The Homecomers. And this is the first time I’m sharing that publicly actually. And it’ll be out later this summer.
Nick Hanauer: That’s super fun.
David Goldstein: Congratulations.
Nick Hanauer: Good for you. That’s awesome.
Sarah Smarsh: It’s about the wellness of rural communities. And it’s really amplifying the voices of people who are doing the work and have lived that rural life firsthand. And I’m also just happily taking a break from writing. Believe it or not, Heartland, my book, was not contrived for this political moment. I began it in the year 2002 with a tiny research grant. It took me over a decade to write it because I was poor most of those years. And so I’m just tired from writing, you all. And so I’m not going to probably be doing any writing projects anytime soon, but just enjoying dabbling in other media.
David Goldstein: I want to personally thank you for doing that writing project. It was a beautifully written book.
Sarah Smarsh: Thanks so much.
Nick Hanauer: So cool. Well, listen, we’ve taken a lot of your time. And we are so pleased to have gotten to chat with you, Sarah.
Sarah Smarsh: This has been awesome.
Nick Hanauer: Okay. Thank you so much.
Sarah Smarsh: Okay. Best of luck. Bye-bye.
Nick Hanauer: Take care. Bye.
David Goldstein: Thank you. Bye-bye. One of the great privileges of doing this podcast is that we get to talk to the authors of the books we read. Well, this was really fun because I actually listened to the audiobook recording of Sarah’s book that she narrates. So it was like getting to talk back to the book itself.
Nick Hanauer: That’s [inaudible 00:50:54]. Yeah, it’s such an interesting story, and so big part of the economic story of the last 40 years is the way that the rural areas have become increasingly impoverished. But, Goldy, one of the really important challenges that the country faces is that there are some underlying dynamics to how an increasingly technological economy work that make this rural, urban divide, spatial inequality a very tough challenge.
David Goldstein: Right, because it’s not just a policy challenge. There are different policies we can do. Part of what’s happening today is the result of decisions we made in D.C. and in state capitals around the country.
Nick Hanauer: And that’s what we said earlier. Some of those decisions were stupid, and we shouldn’t have made them, and we can make better ones in the future.
David Goldstein: Right. So we can address issues like market concentration through law. But part of it is just the changing nature of the economy. And I think the important takeaway here is that you can’t fix a systemic problem with place-based solutions like worker retraining. You can’t ask a city or a rural county to pull itself up by its own bootstraps by offering retraining programs when it doesn’t address the larger national problem that is sucking jobs and wealth into a handful of big cities.
Nick Hanauer: Right. Yeah. There’s no getting around requiring big, profitable companies to pay people enough to get by.
David Goldstein: I think one of the more painful things that Sarah talked about was how she spent much of her youth working on a farm growing food, and she goes to college, and she’s so poor, at times, she couldn’t afford to eat. This is not about feeling sorry for people in poverty and rural America. We actually want people to live dignified lives.
Nick Hanauer: Yeah. And again, there’s no reason why we can’t do that. Again, the giant [inaudible 00:53:05] businesses that dominate the economic landscape could absolutely afford to pay people decent wages. And we could go back to a regime of preventing corporate concentration rather than encouraging it. We could have family farms. There’s no reason that we couldn’t have those again.
David Goldstein: And we could go back to a public college and university system where 80% of tuition was subsidized by the state instead of it being 80% tuition so that those kids in rural America that want to get an education don’t have to be scared away by the cost of it.
Nick Hanauer: Yeah, right. All of these are policy choices. So I do think that we can save rural America. And I think for the country’s sake, we need to find ways to do it. And if that requires making policy decisions that some people in cities think are inefficient or ineffective or-
David Goldstein: Or unfair.
Nick Hanauer: … unfair, we’re going to have to do that because for the country to function well politically, culturally, and economically, we’re all going to have to find a way to be in this together.
David Goldstein: Thanks to everyone for leaving your questions on our voicemail. Next week on Pitchfork Economics, comedian Trae Crowder will be joining Nick to answer all your questions. So this is your last chance. Leave us a question at 731-388-9334.
Annie Fadely: Pitchfork Economics is produced by Civic Ventures. The magic happens in Seattle in partnership with Larj Media, that’s L-A-R-J Media, and The Young Turks Network. Find us on Twitter and Facebook @CivicAction. Follow our writing on Medium @CivicSkunkworks. And peek behind the podcast scenes on Instagram @PitchforkEconomics.
And one more, you should definitely follow Nick on Twitter @NickHanauer. As always, a big thank you to our guests. And thanks to you for listening from our team at Civic Ventures, Nick Hanauer, Zach Silk, Jessyn Farrell, Jasmin Weaver, Stephanie Ervin, David Goldstein, Paul Constant, Stephen Paolini, and Annie Fadely. See you next week.