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- [Announcer] Welcome to the Wiener Conference Calls series, featuring leading experts from Harvard Kennedy School who answer questions from alumni and friends on public policy and current events.

- Hello and welcome. I'm Ariadne Valsamis, from the Office of Alumni Relations and Resource Development at the Harvard Kennedy School, and it's my honor to welcome you to this Wiener Conference Call. These calls are very generously supported by Dr. Malcolm Wiener and his wife, Carolyn, who championed the Kennedy School in so many vital ways and we're very grateful for their support. I wanna give a couple of reminders before we start. The call is being recorded. It will be posted on the Kennedy School's website and on our YouTube page. If you would like a real time transcription of the audio, please use the meeting controls on the bottom of your Zoom screen, and you wanna find the show captions button. If you would like the best view of our speaker, please select speaker view, that's on the top right of your Zoom window. And we are very privileged today. We're joined by Gordon Hanson, who's the Peter Wertheim professor in urban policy and the academic dean for strategy and engagement at Harvard Kennedy School. Gordon is also the co-director of the Reimagining the Economy project with Professor Dani Rodrik. And Gordon's current research addresses the causes and consequences of regional job loss, the effectiveness of place-based policies in alleviating regional economic distress, and how the energy transition will affect local labor markets. We're very fortunate that he's agreed to share his work today with the Kennedy School's alumni and friends. And I will turn it over to you, Gordon.

- Thank you very much, Ariadne. It's really a pleasure to be with you all today. It's election season. There's lots going on, and what I'd like to do is just kinda take a step back and think about what might come after the election in terms of economic policy, either by a Harris administration or a Trump administration. I'm gonna focus in particular on policies that have a specific objective in mind, and that's helping America's left behind regions. And that terminology of left behind is something that both that the Biden administration has used, that the Trump administration used earlier, and that candidate Harris has used. So what I'm gonna do is kind of give you a sense of, well, what does left behind mean and where did being left behind come from, and what are its long-run economic consequences? And then I'll highlight the two very different approaches. Well, I'll highlight the commonalities between President Biden and President Trump and how they define the problem and the high-level goals that they set out, which were mainly about bringing more manufacturing jobs back to the United States, and then highlight the sharp differences and the particularities of how they sought to bring that reality into being. I'll close with what we're doing at the Kennedy School on all of this. We have developed a data visualization platform in which we try and provide practitioners, journalists, students, academics, anyone who's interested information at their fingertips which allows them to evaluate what's happening in America's local labor markets and where are the resources coming from, state and federal governments, going across a wide variety of programs. And I'll say a little bit more about that in closing and how we've used it in the work we're doing so far. I'll try and do all of this in about 23 minutes and leave us ample time for discussion. So I'm gonna jump in to some slides. I promise very few words and lots of pictures. So the work I'll talk about today is part of the Reimagining the Economy project with which Dani Rodrik and I are running inside the Malcolm Wiener Center for Social Policy here at the Kennedy School. So what does it mean to be left behind? There's a very simple metric that tells us a great deal about what's going on economically in the place. And that is the rate of joblessness, which is different than unemployment. To be unemployed means you are out of a job and looking for work, to be jobless means you're out of a job, whether or not you're looking for work. The unemployment rate rises and falls a lot over the course of an economic cycle as we go from economic expansions to recessions and so forth, the rate of joblessness moves more slowly, and that joblessness is indicative of a much deeper economic pathology. So I wanna kind of show you some data on what joblessness looks like in the United States and how it's evolved over the last 30 years. And then talk about the economic consequences of being in a place where joblessness is high. So I'm gonna show you, I'm showing you two maps right here. Each map shows the fraction of prime age men. Prime age means ages 25 to 54. We focus on prime age because, historically, employment rates among this group have been very, very high. I'm focusing on men because you wanna separate men and women when looking at changes in employment rates over time, because women's employment rates have increased just across the board. And so, whereas today, joblessness for men and women look similar, they started at very different places. I'll come back to that in just a second. So the map shows you, then, what's going on in local labor markets. What's a local labor market? It's a collection of counties in which people live and work. One of the things we've learned about the US economy over the last 15 or so years is that economic mobility, the movement of workers from one place to another, isn't nearly what we thought it was. Students move, recent graduates move, the highly educated move. But once somebody's over 30 years old, and especially for those who do not have a college degree, mobility in response to changing economic times is pretty muted. What that means is understanding what's going on inside the places in which people live and work are really important. And this concept of local labor markets and understanding what causes wellbeing to change in these regions has been the centerpiece of the work I've been doing for a couple of decades. So what you're seeing on the left is for the year 1990, the fraction of prime age men without a college degree who were jobless, you see in dark red places where the jobless rate was above 25%. That's concentrated, you can see a concentration in Appalachia. You can see concentration in New Mexico, in the lower Rio Grande Valley of Texas, and some rural parts of industrial states, Upstate New York, Upper Michigan, and some other places in the low-lying areas of the Southeast. On the right-hand side, what I'm showing you is the same thing, but now for prime-age men with a college degree. The cutoff values for colors are exactly the same. And what do you see? Joblessness in 1990 was much less common among the college-educated. Now what's happened over the last 30 years is that joblessness among non-college men has increased dramatically. Whereas among college men, not much has changed. So let me do that again for you. What you see is a dramatic expansion in these dark red and pretty dark red areas. That increase in joblessness is due to kind of three big things. One is the consequences of globalization and manufacturing job loss that was a result primarily of import competition with China. Work on this as part of the China Shock agenda is something that I've pioneered with my colleagues David Autor at MIT and David Dorn at the University of Zurich. But that's not the only thing that's going on. Technological change and automation have been very important. The loss of jobs in coal mining, and some parts of kind of old industries have been important, as well as secular shifts away from the types of industries that employed lots of of workers without a college education. So the combined results of those shifts over the last 30 years gives us this map in which we see concentrated pockets of joblessness in lots of the United States, and then high levels of joblessness, more than 20%, in a huge chunk of the country. When you look on the right, you see what's gone on with workers with a college degree. Do the slideshow one more time. Almost nothing's changed. It's like college-educated workers live in a different country. Our concern about joblessness is that, and then let me finally say, if we were to look at this map for women today, it would look almost exactly the same. Joblessness among non-college women is high where joblessness is high among non-college men. And well, joblessness is just low everywhere for college-educated men or women. The reason we're concerned about joblessness goes back to insights that William Julius Wilson, a great sociologist, really a landmark in scholarship on the challenges of inner city life in America, was at the Harvard Kennedy School for much of his career. And what Wilson discussed and put forth is the idea that what's troubling about low income areas is not poverty, people can be poor and they can be doing okay, they can be making progress in their lives, it's poverty combined with joblessness, because when you have joblessness, what happens? Families break down, the incidence of criminality goes up, drug and alcohol abuse goes up. And what you have is a lack of investment in the social fabric of a community that can lead to a downward spiral. This was something that Wilson studied in the case of inner city Chicago in the 1960s and 1970s. What we've seen since that time is now that those same pathologies play out in former manufacturing regions that are small and medium-sized towns. So that's our reality today. And what's been just really interesting to us who study economic policy is the way in which Democrats and Republicans kind of agree that joblessness is a big issue, manufacturing job loss should draw our concern, and that we should be doing something about bringing jobs back to former industrial areas. And so what we've seen, first on the part of President Trump and then on the part of President Biden, are concerted efforts to try and do just that. So what I'll do next is talk about what was the Trump approach, then talk about what the Biden approach was, and then talk about where we might go from here, and then we'll open stuff up for questions. So what did President Trump do? Well, president Trump made it very clear he wanted to bring manufacturing jobs back to the United States, and his main mechanism for doing so, in addition to some tax incentives that were part of his 2017 Tax Cuts and Jobs Act that include the creation of Opportunity Zones, happy in the Q and A to talk about what Opportunity Zones are and what we know about them. But really his primary policy tool was raising tariffs on imports of goods from China. And these were primarily manufactured goods. And his theory of change, and there was a very clear theory of change there that was spelled out by his trade representative, Robert Lighthizer, was that if we put import tariffs on Chinese manufacturing goods, we're gonna reduce those imports, we're gonna expand production of manufacturing goods in the United States, and we're going to then increase manufacturing employment. On the left, what you see is a map based on research that David Autor and David Dorn and I just completed last year, which shows what are the regions that should have benefited from those manufacturing tariffs that President Trump put on Chinese goods. And if you compare maps, you can see that the dark red areas in the jobless map and the magenta, dark magenta areas in the tariff maps have a lot of overlap, not perfect overlap, but the Trump tariffs were targeting lots of areas that had been subject to manufacturing job loss. What we then went on to do was to ask the question, well, was the theory of change validated? Did those tariffs then turn into more manufacturing jobs? And the answer is largely no, that we saw very little employment recovery in the places in which that should have benefited from those higher tariffs. And what we uncovered was several reasons for this. First is that China didn't sit still. What China did was almost immediately after the US raised tariff tariffs on imports of Chinese goods, they put tariffs on imports of US goods. And on the right, that map shows you in darker colors the regions that were hit harder by China's retaliatory tariffs. And what you see is there's a fair bit of overlap between the map on the right and the map on the left, not perfect by any means, but many of the places that might have been helped, on the one hand, by import protection from China were now facing tariffs on exporting goods to China. So China itself undid part of the effect of the Trump policy. But then something else happened, and that is that we stopped importing some goods from China and we started importing them from somewhere else, and primarily Vietnam. There was plenty of leakage there. There was also kind of uncertainty over, well, would these tariffs last? And so we didn't see a sharp increase in investment in new manufacturing capacity that happened in the aftermath. The new capacity we did see was in plants that are just very capital-intensive. They don't use nearly as many workers as old factories did because technology has changed in the 30 years since those factories disappeared. If you take a step back, though, and think about the Trump theory of change, you'll see that it has a lot of causal links. You have tariffs to imports, to production, to jobs. And all of those links have to be operative. There's a principle in economic policy of targeting, if you wanna achieve a given outcome, you wanna target policies that go after that outcome as directly as possible. And that means policies that would target employment and not imports. And so there was some fuzziness in the fact that you had a pretty involved causal chain that took you from the policy to the action that we wanted to accomplish. What a candidate Trump is proposing for a new Trump administration is more of the same: much higher tariffs on imports of goods from China and imports of goods in general. Now we don't know what the magnitude of those tariffs will look like. So it's kind of hard to forecast what their impacts would be. The sort of tariffs that Trump is talking about would be so expansive as they would like as to require an act of Congress. Whereas what Trump has done so far, he could do as president. And so I think there's some doubts about the ability of a President Trump to enact the trade policies that candidate Trump is proposing. Okay, so what about what President Biden has done? So President Biden passed four big pieces of legislation, and you'll see those on the left. The ARPA was the American Recovery and Production Act; The IIJA was the Infrastructure Investment and Jobs Act; The IRA was the Inflation Reduction Act; And the Chips and Science Act was the CHIPS Act. What these pieces of legislation did were, one, to provide subsidies for investment in specific types of economic activities. So that could have been building infrastructure, it could have been building clean energy generation capacity, or in the case of the CHIPS Act, building new semiconductor capacity. Most of the money that President Biden authorized was really tied to sectors and not tied to places. What President Biden also wanted to do was not just to activate those sectors, but to try and help regions in which that had lost manufacturing jobs. So a secondary part of these pieces of legislation was money that really did try and target distressed places. And so as we total it, and you look across the different provisions of these four pieces of legislation, we tally about $80 billion over roughly a decade in money that would go to place-based, that would really target places in distress. Is that a big number or is that not a big number? So what we've also done as part of the Reimagining the Economy project is we are measuring what the United States does when it comes to place-based policy, all the stuff we do to try and create jobs, raise wages, upgrade economic structures in places that are hurting economically. That is simple to say, but it's really hard to do, because these policies are undertaken by just a cacophony of federal, state, and local agencies. So we've spent the better part of three years cataloging everything that happens in these domains. And the result of that is what you see on the right. I'm not gonna go through what all the colors mean, although I would be really excited to do so, 'cause it was a lot of work, and it's the first time this has ever been done. And what it shows you is that the US spends around a hundred billion dollars annually on what you consider kind of place-based policy. And so what President Biden was proposing, 80 billion over 10 years, think of that as kind of a 10-20% increase in what the US is doing already. So his numbers seem big, but we're already doing a bunch of stuff. Here's the kicker though, and that in order to get access to this money, you had to then, for most of these programs, you had to organize a consortia, a group of organizations, that would do a thing in your region that met the requirements of one of these laws. Let me give you an example of an organization we're working with in West Virginia. Coalfield Development is based in Huntington, West Virginia. And their mission is to try and retrain workers who've lost jobs in coal mining and coal-mining related industries so that they can find well-paying employment in a region that has been really hard hit by the energy transition. To qualify for the money, what they had to do was form a coalition with about eight other organizations that would then create a plan for bringing a set of policy packages to a wider region. And so this is kind of about a six-county, no, it's a 8-to-10 county chunk of Appalachia that would work on not just workforce development and worker training, it would work on investing in communities, it would work on revitalizing communities, and also have a clean energy component. So that's great, but in order to organize a consortia, you have to know what you're doing. You have to have administrative capacity, you have to have to understand how the federal government works, and you have to have kind of a well-defined set of programs that you can then roll out. Whole field development is among the most innovative programs in the space of place-based policy in the United States today. Its founder won a MacArthur Genius Award for his work. You don't want that to be the threshold for getting access to money to help distress regions, to have to have a leader who can win a MacArthur Genius Award. So the consequence of what President Biden has done is funding really innovative stuff, but in places that have pretty good administrative capacity in the place-based policy domain. And the consequence is there's a bunch of places that have been left out and so have missed out on that money. And that would be my critique of the Biden administration. And this is something that we have kind of communicated to the Department of Commerce, to the president's Council of Economic Advisers. And it's something they're quite aware of, and happy to talk in the Q and A about why did things play out in this particular way. So what are we doing to try and to help? One thing we're doing is what I just said, we've been developing, organizing a community of practice and place-based policy. And this is jointly between the Malcolm Wiener Center and the Taubman Center in which we're getting folks together to talk about the approaches they're taking to address economic distress in where they come from. Many of these folks are Kennedy School alumni. And then we're trying to learn from them what's their concept of best practice, what are the constraints they face in trying to realize best practice, what should we be doing research on that would be helpful for them in the work that they're doing? There's fabulous work happening on the ground. Not enough of it is getting funded in the most distressed places, and insights from the effectiveness of that work is not being diffused. So we're there as trying to help in that diffusion and help in the documentation of the excellent work that practitioners are already engaging in. We're doing this through a data visualization platform, which a beta version of this will be going live in the next couple of weeks, which does three things. First is what you see here, and this allows you to explore economic conditions in local labor markets in the United States going back 30 years where you can look across regions according to the gender of workers, the education of workers, the race and ethnicity workers, whether they're native-born, they're foreign-born, by their age. And we can look at employment rates, we can look at median earnings, we can look at inequality, and we could look at population trends. So the idea is to put in the hands of practitioners, of students, of journalists, of other folks in the policymaking community ready information that allows you to assess, to do simple diagnostics on your own. And then there's a bunch of stuff we do in the background to make that possible. The other thing we've done is for all of these colorful policies you see here, we are measuring the flows of those resources by year, over time to all of the places you see here. And so we are helping folks for the first time to be able to chart who gets what in every major federal place-based program, but not just in those programs. We're also doing all forms of social assistance from the Earned Income Tax Credit to SNAP, which is food stamps, Medicare, Medicaid, veterans' benefits, and then also a bunch of other stuff that ends up being place-based in practice, if not in design. And that's because the investments the government makes are lumpy. That includes subsidized hospitals, it includes military bases, and it includes sadly, state and federal prisons, which have become a major source of employment in low-income areas. And so this is all gonna be available to folks so they can say, "What's going on in my place? What resources are we getting? And how does that compare to places that look like us?" We are developing all of this not on our own, with focus groups, with communities of practice, and a large network of practitioners and folks operating in this space who are giving us kind of feedback and helping us produce something that we hope will be a value in the great work that we're doing. So I promise to keep it to 23 minutes. I'm sorry, I went to 24. I'm an economist, so I work on precision, and happy to pause now, open it up to questions, and hear your thoughts.

- Thank you, Gordon. I'll do a couple of housekeeping notes. Please turn your cameras on. We appreciate seeing people. To ask a question, please use the virtual hand raising feature of Zoom, and I'll call on you when it's your turn to unmute yourself and ask your question. And we always wanna remind you to please keep questions brief and end them with a question mark, and all of us on the call would appreciate it if you can state your Kennedy School affiliation. And I'll start us off with a question that was submitted earlier by Nanditha Menon, who's a 2024 MPP graduate. And Nanditha wants to know: the American economy has seemingly achieved a soft landing, which candidate's policies might affect this relative stability the most?

- What does a soft landing mean? After just the utter weirdness of the COVID-19 pandemic, policymakers went out and fought kind of the last battle. The last battle was the Great Recession. What did we not do enough of in the Great Recession? We didn't put enough money into the system. And so recovery from the very high levels of unemployment took a long time. So what did we thought the solution needed to be this time? Flood the system with money. Turned out that wasn't needed. We had many other challenges to face, and so that created inflationary pressures that took a while to get under control. The US economy has succeeded in bringing inflation down without causing a recession. Macro economists worldwide are cheering this accomplishment, it's like sweeping the World Series. It's very, very hard to do. And so here we are. Now, all of that said, there's a whole bunch of issues that we inherit from the past that the unemployment rate or the inflation rate aren't going to tell you about. And what I was referring to regarding joblessness is one of those things. Going forward, both candidate Trump and candidate Harris had proposed major tax cuts and major spending items. Either would put sticking that soft landing at risk because they would create strong inflationary pressures. I think the odds of either candidate achieving those near-term policy goals are pretty close to zero. And that's because a president would have to have control of both houses of Congress. And if we believe the models about the election, and who knows whether we should, 'cause who knows what's gonna happen this time, the unified control of Senate, Congress and White House in one party just seems really, really unlikely.

- I'm gonna ask Serena Lease to ask her question.

- Hello, so I am a MC/MPA graduate of 2020. I'm also a member of the Dean's Council, love and have had various other hats around the Harvard universe. My question is in the maps that you showed us early on of the change between 1991 and 2021 in joblessness, and also in the data visualization platform you've set up, where would the sort of trend in the left-behind regions of people having multiple part-time jobs as opposed to full-time employment kind of show up? Where would that work its way through or be reflected?

- That's a really important point. We're using a probably the lowest threshold for economic distress, which is are people in work. Then the next level threshold is to talk about, well, what's the quality of that work? What are the quality of those jobs? And over the same time period, and so if we were to look at that same map, and say, "Well, in these places, what fraction of people are working full-time? What fraction of people are able to achieve full-time work in one job," and so that they're gonna have a good chance of getting benefits? The patterns are gonna look very, very similar. So rising joblessness has come along with the rising precariousness of work, although that precarity is more widespread. We see it everywhere, even in the Boston area. I'm a big fan of understanding economic concepts through art, music, movies, fiction. Adelle Waldman has written a brilliant novel called "Help Wanted" about life in a big-box store and the precarity of the lives of the workers who unload trucks that come in every morning. We liked her book so much, we invited her to the Kennedy School two weeks ago to speak about it. And then we talked about what we're doing with Reimagining the Economy. And so if you want to understand that sort of the precarious lives, don't read our work, go read Adelle Waldman. It's a brilliant piece.

- Thank you. Jonathan, please ask your question and introduce yourself.

- Hi, I'm Jonathan Jayes-Green. I'm MC/MPA, class of 2024, recent graduate. Thank you for this incredible presentation, Professor Hanson. As folks may or may not know, the governor of Massachusetts created or passed into law a funding mechanism to support local municipalities in their efforts to apply for federal funding, and the efforts to maximize how many of these dollars are flowing into Massachusetts. So I'm just curious if sort of the database or the tracking that your team is doing will allow for sort of a perspective of a comparative analysis of sort of how the funds are going particularly to places, and then how are their particular strategies impacting, if at all, their funding allocation?

- Yeah, thank you for raising that question. And Jonathan, very nice to see you. It was wonderful to have you in in class last year. I'm just really always thrilled when I get to see former students. So there's a third piece to our data visualization platform, which gets very much at this issue of capacity. Who are the actors involved in carrying out the different parts that are active in different policy domains? So it turns out that every time a dollar flows from the federal government to some place, it leaves a trail, and that is gonna go through some sort of intermediating entity. And that tells us about whether specialized banks are in a place like a community development financial institution, community colleges doing career and technical education, Workforce Development Boards that might be overseeing the provision of training vouchers and the like. So we are using that to then develop an image of what administrative capacity is in the place-based policy domain. Now you're talking about a very important but very subtle element of that, which is kind of the collective services that are made available to smaller localities that help them get in line for funding. And kind of round two of what we'll do, we'll think very much about those capacity-building exercises. As we've talked to practitioners from smaller places, this is the first thing they mentioned. Federal government is very, very hard to work with at matching fund requirements, the reporting requirements are absolutely insane, and they want you to spend vastly more money than they really know how to do on an annual basis. And so these collective efforts, that are happening by bigger cities or states that then enlist their communities, are really important. We want more of them, not in the Boston area, we want more of them in Western Mass, or we want more of them in the Central Valley of California, where I'm from, or Northern New Mexico, or other places that are in distress.

- Thank you. Linda Dakin-Grimm, please introduce yourself and ask your question.

- Sorry, sorry it took me a minute. Hi, Linda Dakin-Grimm, law school graduate in 2020-2021. ALI fellow, took many classes at the Kennedy School. My question concerns the lack of take-up, if you will, of the program you described that the Biden administration offered, and you described how difficulty in dealing with the federal government explained some of the unevenness in take-up. Was there also a role of political resistance to doing something that might give the Biden administration a win? And was there a role of mis and disinformation to keep communities from supporting those policies?

- Yeah, really, really important question, and thank you for asking it. The stuff we're working on right now is to understand the role of politics and how money flows. And you can think about politics mattering in two kind of different ways, on the supply side, kind of who's the party of a governor or the party of the president may have a role in where money goes, whether money goes to local labor markets that are red or blue. At the local level, politics may matter, just as you say, because it may affect the willingness of local entities to participate in federal programs if there's discord between the party at the local level and the party in the state house or party in the federal government. So we are working on exactly this to understand the role that political, the alignment of the political party of a place, and then the where the funding entity sits, whether it sits in the state capital, or whether it sits in Washington, D.C. And I don't have any results to to to tell you. We've got some stuff that's super preliminary, but really, we want to understand this. The one thing that does show up, not as strongly as you might expect, is a different type of politics. And that is governors wanting to champion the attraction of big trophy firms to their states, which they do by offering sizable tax incentives and perhaps not shockingly, they're much more likely to do this if they're in incumbent governor and it's an election year and they're up for reelection. But that's where kind of politics, the one area where politics has kind of shown up most clearly.

- Julie Brennan, please introduce yourself. Ask your question.

- Hi, thanks for the talk. I'm Julie Brennan, MPP in '93, calling in from North Carolina, where we have a lot of people that are doing well and a lot of people left behind. I just wanted to ask a little bit more about your data visualization tool. I missed, is that going to become public at some point? And did you say it's county-by-county? I just think it'll be a tool that a lot of local governments would like to look at.

- There'll be two versions of it. The one I showed you right now is a little bit more aggregate. Those are aggregations of counties that we think of as local labor markets which are the right units to understand economic change, but counties is a more standard administrative unit. So not all the data we can show at the county level for just reasons of data availability, but there'll be a county-level version of this that we're constructing too.

- Paul, please introduce yourself and ask your question.

- Hi, I am Paul Adrian and thank you for calling on me. I'm a mid-career MPA from 2009. So looking at your map, the one you showed early on, it occurs to me that we really kind of did this to ourselves because manufacturers decided it was in their best interest to offshore. So I'm wondering if there is an economic argument that can be made or is being made to employers that, despite whatever incentives or tariffs exist, it's actually in their best individual interest to build locally.

- So it's a complicated question, because the market economies are dynamic in ways that are really good for generating prosperity and they're dynamic in ways that can be challenging for spreading prosperity. We don't wanna be in the business of saying once a region does a thing, then we're gonna make sure that that region always does that thing , because it just may not make economic sense to do so. What we do wanna make sure is that that regions don't lose their economic wherewithal because of issues of transition. Credit dries up, they can't find the right types of workers, they don't have access to the resources they need to ride out a difficult period, or that we don't unwittingly expose them to massive changes in competition that wipe them out in a couple years. Whereas if that change happened more slowly, they might have been able to adjust. So the, the lesson of this, I think, is twofold. One is to think about making sure we have policies in place that allow workers and companies to be agile in response to economic change, to move from one job to the next, to endure some temporary economic hardship. And then we think hard about trade policies, about regulatory policies, about what's happening with technology in terms of the degree of disruption that we introduce into the economy. The US was gonna trade substantially with China at some moment in time. We chose to unleash that in about a six-to-eight year period. And it was an increase in competitive pressure of the like that we've just never seen before. And practice to that point had been, we don't have to worry about timing, the US economy is dynamic, we usually adjust, we create 10 million jobs every year. And what we've learned since is that the pain of mass job loss in a region is felt generationally. And so we create real social problems when we allow disruption on that scale to occur. And getting it right is tough, because you're getting in the way of some market mechanisms, and you don't want to get in the way of all market mechanisms, but you do want to recognize the long-term consequences of creating a highly localized distress. That's what we're living through right now.

- Amy, please introduce yourself and ask your question

- Now I can unmute. Hi, I'm Amy Porges. I'm MPP and JD 1980. I'm a trade lawyer, so I have question. Okay, number one, do your papers on chinashock.info explain the concept of the local labor market area? I mean there must be some paper on there that does that?

- Yes.

- And second question is, Buy American requirements. There are like different flavors and different degrees of Buy America and Buy American in the Infrastructure Act and the IRA and the CHIPS Act. And they're really kind of complicated to comply with. Has your research examined the extent to which Buy American requirements actually impede take-up of these programs?

- On the first question, our concept of local labor markets that we use, the technical term is a commuting zone, and it's something that the U.S. Census Bureau developed about 30 years ago, they didn't do much with, and we kind of popularized it. So we took some very good ideas that folks in government had developed and just try to make sure that they were used as widely as possible. If you want the citations on that, happy to provide them. We haven't looked specifically at the Buy America stuff. It's pretty recent, and kind of you need to give things a while to play things out. I'll give you my own take on Buy America stuff is, and that's that I'm skeptical, and for the simple reason that, if we wanna start with the problem we're trying to solve, and I think the problem we're trying to solve is we wanna create better jobs for American workers and in particular workers without a college degree. So what that means, then, so how do we do that? Well, making sure workers have the right skills. So we want career and technical education to work as effectively as possible. Much of that career in technical education is provided by community colleges. So if we wanna help American workers, we should be making sure that all community colleges, or as many as possible, are utilizing the techniques that the best community colleges have developed to get people training in the right types of jobs. And then we wanna think about the stuff that gets in the way of jobs being created in places where joblessness is high. And one of the things, one of the big obstacles, is that when you have mass job loss in a place, your aggregate income goes down. When your aggregate income goes down, housing prices go down, your housing values, that's the source of collateral that most new entrepreneurs use to start a new business. And so if we're denting the local labor market via kind of this downward spiral, we're not gonna be creating new jobs. And so we wanna make sure that the credit markets are working in a way that helps us create jobs in the places that need them. So my view on this would be to go, if the problem is creating good jobs in the places where those jobs don't exist, then let's go after that as directly as possible. And things like Buy America provisions, like the Trump tariffs, seemed quite indirect to me.

- They were, I mean basically, these were the political price, I think, in Congress for unleashing all that money. That was basically the price they paid. But there is a cost to it.

- Yep.

- Yeah.

- Thank you. I'll go to Mark, please.

- Hi. Thanks for calling on me. Gordon, that was a wonderful piece of policy analysis and design that is much more humane and nuanced and individualized and contextualized than most economic analysis I hear at the Kennedy School. And so I'm very grateful to see what very humane and thoughtful economists can do when they focus their attention on the humane experience of not being a working American, your was wonderful. But I have one question that was prompted by the extraordinary difference between college-educated and non-college educated male workers, right? I assume that that, so is there any economic explanation for the value that is added by a college education, or what is it that a college education is signaling in the marketplace that turns out to have such a profound impact on labor opportunities or labor commitments that individuals make?

- Thanks for that question. This issue of geographic mobility of people is really at the core of how we spread prosperity more widely in the United States. And it's something that economists really came to terms with just in, really, since 2010. We were quite sanguine about the ability of workers of all types to move from one place to another in terms of changing economic conditions. So our understanding of it is still incomplete. There's some things that we think are happening, but I don't wanna say that we have super-high confidence in these explanations. First on the list is that a lot of the growth of good jobs is happening in expensive cities, and the housing affordability crisis, the inability of cities to produce as much housing as people would like to have in those places, squeezes lower income folks the hardest, and the folks without college education are further down the economic ladder. So the housing challenges directly affect the ability of people to be mobile. Something else that's gone on that's been a consequence of stagnating incomes for middle-income folks is the reliance of people on their family network or local social network for childcare and for other help in making life work. So now if you leave a place, you're leaving that network and it can be much more expensive for you to set yourself up in some other place. And then here's something that's just tragic that plays into that second thing. And that is, as economic conditions have deteriorated in kind of the bottom half of workers on the pay scale, families are less likely to form, and families that do form are more likely to split up. And that means mo and dad, when we think about mobility, it's not just a two body problem. Mom and dad thinking about finding jobs in the same place. Mom and dad live in different households. So now it's a two-body, two-household problem in addressing economic mobility. So the combination of those things means that there's an economic weight that gets in the way of mobility. But I don't wanna say that it's purely economics. Folks are thinking about their connections to communities in a different way, perhaps, if you've kind of gone through the US higher educational system versus not having done so.

- Thank you.

- So.

- Ooh, sorry, Mark. We're gonna go to Rebecca, or is Mark back? I'm gonna get confused. Rebecca, we;ll go to your question, and Mark if you address us in the chat, we can figure that out. Rebecca has a place-based question.

- I do, thanks for taking my question. I guess, my affiliation, my husband was a National Security Fellow through the Army. So he forwarded this to me. We both grew up in Upstate New York, left with the Army. I retired out of the House Appropriations Committee on Capitol Hill, and we bought an old farm in Central New York and came back. So high taxes, which are a reality here, shrinking economies, much different than the Upstate New York where we grew up. They have drove people out. The county that we are living in had the highest outgrowth, I guess that doesn't make sense, but most people left and Upstate New York lost congressional seats as well. So what I've noticed is that the younger people leave, they don't find jobs around here to include our two children, looked around when we did move from Northern Virginia up here. I noticed that the speaker talked about urban policy, but this is really who is looking at more of a focus on the rural policy. I understand there's a distressed or left behind, but it's really more of a rural mindset, Upstate or Appalachia, how you organized your information there includes rural counties with larger areas. So that information paints a rosier picture than I think exists. And that is very localized for me when I looked at your map. But I guess more of a commentary and a question and how are you focusing on the rural parts of these policies.

- So thank you, thank you very much for that question. It gives me an opportunity to kind of clarify the scope of the stuff we're studying. It's kind of odd. My title is I'm a professor of urban policy, but I like to study regional economies in their entirety. And that means smaller towns and rural areas, because as we study them and understand them, they're part of a broader economic system that is highly interdependent. The version of the maps I was showing you to find local labor markets, that are gonna aggregate especially more rural areas, they're gonna aggregate places that are really separate places. That's why we have another version of this that's at the county level. The county can be too big too. It's hard to do a lot better than that. But when you think about, especially in smaller towns and rural areas, you really want to be at the county level because of that marked heterogeneity across places and marked differences in economic realities. You can have a county that's got a regional public university that has a completely different reality than a county that's just two counties over and might be the same part of the local labor market. So fully on board with the idea that that variation at more at the hyper-local level is really important.

- Thank you

- John Shane, I wanna invite you to ask your question.

- Thank you. I've been on the Dean's Advisory Council for many years and I also participate in an annual discussion at the school with an Osaka business group. I didn't go to the Kennedy School, but I went to the Business School by mistake. And thank you for sharing your ideas with us today. I noted on one of the later slides that you were using data from native-born people rather than immigrants. And I wondered if that was a conscious decision to make, and, if so, why?

- Thanks for asking for that clarification. We look at everybody, but we also wanna understand the different employment dynamics between foreign-born workers and native born workers. Foreign-born workers, many of whom are more recently arrived in the United States, turn out to be a lot more geographically mobile. And so we see just different dynamics in the labor market when we separate the native-born and the foreign-born. And so if you then think about who bears the incidence of an economic downturn in the place, it's gonna be older, less educated, native-born workers who are the least economically mobile. Whereas the foreign-born population might be much quicker to move out, but also to move in. Here's one of the really interesting things that we've discovered just in the last couple of months. And that is in these places that have been beset by manufacturing job loss, we are starting to see different types of recovery. That's the good news. The bad news is that recovery really hasn't included the workers who started in manufacturing. You were in manufacturing in the early 2000s, you never really got your mojo back. But the places that saw that job loss have seen expansions and employment in new industries. They tend not to be in manufacturing, but in other stuff. And it's the arrival of immigrant workers that are really triggered that resurgence, and so that mobility means, and perhaps attracted by low cost of living, by jobs that are opening in different areas, but it turns out to be understanding how different types of people move and adjust to economic changes. It turned out to be an important part of the story.

- Thank you.

- I'm gonna ask Mark's follow up question, which is, your answer's focused on factors affecting mobility, and he wanted to know about college education and whether college education affects mobility and family formation in ways that create a path out for left-behind communities, and adds on, "If so, if that depends on leaving home for college, that would have a big implication for college recruitment." It's a lot packed in there.

- So if we think about the places in darker red or magenta are left-behind places, what is the types of education policy that's gonna really move the needle there? I really don't think it's getting BA degrees. It's gotten increasingly hard to have folks who are really on the economic margins get a BA degree. But it's much easier to get them a community college degree and a certificate from a community college that accredits them to hold specialized occupations. So when we're really talking about folks who are at the 30th, 40th, 50th percentile, it's not kind of going to college or not, which is gonna make or break for them, 'cause it's just simply not on the cards. It's more in the community college dimension. Now that doesn't answer your question on does going to college change people's mobility. Know that we have good research on that, at least for in terms of what economists have done. But it makes a great deal of sense when you go to college, your view and understanding of how the world works and your place in that world changes, kind of what we want college to do. But the challenge is it also encourages mobility out of places that could really benefit from having more college educated folks there.

- Thank you so much. We're almost out of time, so I'm gonna go ahead and close this out. I do wanna point out that my wonderful colleagues have put a couple of links in the chat if you wanted to find some of Professor Hanson's papers or some of the work that folks at the Wiener Center are doing. There are a couple of links there you might want to check out. And I wanna first of all just say a huge thank you to everybody who participated in this call, asked great questions, and gave your time to learn more about this topic. And a very special thank you to Professor Gordon Hanson for sharing his work with us. I very much look forward to seeing as many people as I can to join us for our next call on December 12th. That call will feature our new dean, Jeremy Weinstein, and we look forward to seeing you then. It's December 12th. In the meantime, I hope everyone stays well and takes good care. Thank you, Gordon.

- Thank you very much, Ariadne. Great to see everybody today. Thanks for being with us.

- Thank you all. Bye-Bye.