Rust-Belt Cities and Moving to Opportunity: It's Time to Get Back on the 'Hillbilly Highway'

But making it easier to move to more prosperous places will help some people improve their lives, just as moving did for previous generations.

One of the most discussed events this presidential election has been the emergence of the white, blue-collar voter and its connection to Donald Trump’s political success. Several people have commented on this phenomenon, including J.D. Vance, author of the New York Times bestseller Hillbilly Elegy, a memoir about Mr. Vance’s life growing up in the Rust Belt city of Middletown, OH and his family’s eastern Kentucky, ‘hillbilly’ roots. Mr. Vance’s story presents Middletown as a city that is not only struggling economically, but socially and culturally as well.

Middletown is located in southwestern Ohio, south of Dayton and north of Cincinnati near the middle of the once navigable portion of the Great Miami River. It is primarily located in Butler County, with the remainder lying within Warren County. Both counties are part of the Cincinnati Metropolitan Area (MSA), which delineates a common labor market. Like other cities in the region, Middletown’s economy has historically been based on manufacturing. One of its largest employers is AK Steel, which still has a mill in the city.

Throughout the latter half of the 20th century, manufacturing declined in the area. The figure on the left shows manufacturing employment in the Cincinnati MSA from 1969 to 2014. During this period manufacturing employment fell from over 206,000 workers to 113,000 workers, a 45% decline.

I share Mr. Vance’s hillbilly roots: My paternal grandfather was from rural Putnam County, Tennessee. And like Mr. Vance I grew up in southwestern Ohio, originally in Dayton and later in Beavercreek. One summer during college I worked at one of the area’s factories: General Motors’ Moraine Assembly Plant.

Located just south of Dayton, the plant was originally a Frigidaire appliance factory. When I was there in the early 2000s we produced GM SUVs: the Envoy, TrailBlazer and Bravada. They used summer help to fill in for the full-time workers who were on vacation, so I while I was there I did several different jobs depending on who was gone. I installed gas tanks, rear axles, spare-tire mounts and control arms among other things.

The money was good for a college student, about $13 per hour, but a far cry from the $25 to $35 per hour plus benefits that a full-time worker earned. This discrepancy in pay is one of the reasons why this plant and others closed down; labor costs were too high. GM had no problem finding summer help for $13 per hour, and as competition increased and the demand for SUVs fell it no longer made economic sense to pay four to five times as much.

Local economies in the U.S. are fairly resilient, so even though manufacturing employment declined Middletown’s economy didn’t stagnate right away. The figure on the left displays per capita income from 1969 to 2014 for the U.S., Cincinnati MSA, Ohio and Butler County, where Middletown is located. The vertical axis is a logarithmic scale, which means that the slopes of the lines are approximately equal to the growth rate in per capita income. The flatter the line, the lower the growth rate.

Per capita income increased over this period, and in the late 1970s per capita income in the four areas depicted was nearly the same. But as time went on the incomes diverged, and by the mid 1980s Butler County was on a noticeably different path than Cincinnati as a whole. The red line above is flat from 1999 to 2008, which means per capita income was stagnant in Butler County, and it was only slightly over its pre-recession level in 2014.

And while per capita income growth has been slow nationwide recently, it has been even slower in Butler County. The figure on the left shows this more clearly.

This figure shows the ratio of Butler County’s per capita income to Cincinnati’s. As mentioned before, in the late 70s they were nearly equal: Butler County’s income was about 98% of Cincinnati’s. Then in the early 1980s it began to decline relative to Cincinnati’s, and by 2014 Butler County’s income was only about 89% of Cincinnati’s.

The long-term economic decline of Middletown and its immediate surroundings is clear in the data, but it is not the only factor making life difficult for the people who live there. Researchers have written about the rising death rate among whites aged 25 to 54, and this trend is largely attributed to increased rates of opioid overdoses, liver disease and suicide. The nearby cities of Dayton and Cincinnati are two of the worst cities in terms of heroin overdoses and arrests. In Butler County, heroin overdoses increased from 7 in 2010 to 144 in 2015.

Middletown’s problems are not just economic. Mr. Vance’s book highlights the cultural, social and public health issues that are also contributing factors better than I can do here and I encourage everyone to read it.

What should be done?

I recently attended a conversation with Mr. Vance and he discussed his desire to move back to southwestern Ohio. He also suggested that others like him who have “gotten out” should consider doing the same, thus helping to reverse the brain drain that has occurred in places such as Middletown for the last 50 years. I think this is an admirable idea but I’m not convinced it will be effective. An alternative is encouraging, or at least not discouraging, people to move to opportunity.

The story of America is one of moving to opportunity. European immigrants from England, Scotland, Ireland, Poland and Italy, as well as Asian immigrants from China, Vietnam and India, along with many others, have come to the U.S. looking for a better life. Once here moving continued, from the coast to the heartland, east to west and south to north and back again.

Today the U.S. has one of the most mobile populations in the world, and natives and immigrants alike often move to places with more economic opportunity. In the early to mid-20th century there was the northward rural to urban migration along the “Hillbilly Highway,” which is how Mr. Vance’s family—and my own—ended up in Ohio. For the last 40 years or so the opposite has occurred. Cities such as Charlotte, Atlanta, Houston and Dallas have experienced population booms while Dayton, Buffalo and others have been declining. These types of population fluctuations are a normal occurrence in the U.S.

If some people want to move to places like Middletown that is their choice. But the federal and various state governments shouldn’t use scarce resources trying to restore northern cities’ economic prosperity at the expense of the areas currently growing. The futility of that strategy should be clear after 70 years of largely failed experiments in foreign economic development coupled with the many domestic failures, Detroit being the prime example.

Instead policy reforms should focus on helping actual people live better lives by removing the artificial barriers that make migration more difficult. These barriers include state-level occupational licensing and local zoning rules that increase the price of housing in some of the most prosperous local economies.

Some people will move as a result and this will reduce the supply of labor in cities such as Middletown. Under the right circumstances, such a reduction will put upward pressure on wages and improve the economic opportunities of those who stay.

Additionally, treating serious drug addiction as a public health issue rather than a crime would allow us to focus resources on treatment and rehabilitation. There has been some movement towards this and President Obama himself has stated his support. Unfortunately his actions concerning illegal drugs, particularly marijuana, often contrast with his words. As economist Milton Friedman pointed out many years ago, the legalization of  less-destructive marijuana would provide a safer alternative to harder drugs like heroin.

Even if the costs of migration are reduced by eliminating the barriers mentioned above, not everyone will move. People live where they do for a variety of non-economic reasons, such as family history and lifestyle preferences. But making it easier to move to more prosperous places will help some people improve their lives, just as moving did for previous generations.