From President Donald Trump through Republican governors and state legislatures, the GOP is coalescing around a position of reopening the economy as quickly as possible despite concerns about seeding a wider spread of the coronavirus.
But the party’s efforts face a paradoxical hurdle: The economy can’t regain much momentum without the participation of big Democratic-leaning metropolitan areas, where both local officials and average residents remain more skeptical about quickly unwinding social distancing measures.
In almost all of the swing states likely to decide the winner in the 2020 presidential race, the largest metropolitan areas account for at least two-thirds, and in several cases more than four-fifths, of the state’s employment and economic output, according to a new analysis by the Brookings Institution’s Metropolitan Policy Program provided exclusively to CNN.
Mayors in many of those metropolitan areas – particularly in states such as Georgia, Texas and Arizona with Republican governors committed to rapidly restarting the economy – have raised alarms about reopening too quickly.
And polls, including last week’s national CNN survey, have consistently found that concern about reopening too fast is greatest among Americans living in large urban communities, which continue to face the highest death tolls from the outbreak, even as it spreads more widely into smaller places.
“The concentration of the economy in bigger, denser, more science-oriented places becomes a real ceiling on effective reopening,” says Mark Muro, senior fellow and policy director at the Metropolitan Policy Program. “Metropolitan economic elites are well informed about the risk and may simply refuse to participate in what they may view as a precipitous opening. This is where behavior is going to have a large say, rather than political or policy positions.”
The daunting equation facing Trump and Republican governors is that no matter how many restrictions they lift on the small-town and rural areas that have become their strongholds, both the national and state economies have little prospect of regaining critical mass unless the GOP can greatly accelerate reopenings in the big metro areas that have been moving away from them politically.
As former Atlanta Democratic Mayor Kasim Reed told me recently, “What the current environment shows is that Republicans need Democratic cities to drive the economy.”
This dynamic is the result of long-term trends intersecting with the course of the virus.
The long-term trend is greater concentration of economic activity in the nation’s largest metro areas in recent decades. While smaller communities remain heavily dependent on the 20th-century economic powerhouses of agriculture, manufacturing and energy extraction, all of which peaked decades ago in the number of jobs they support, the high-skill, high-paying digitally oriented jobs associated with the 21st-century information economy have increasingly converged on big urban areas with large numbers of well-educated workers.
Large urban areas are also the center of high-end business services (like banking and legal), entertainment, travel, higher education and health care.
In many states, these trends have allowed the large metropolitan areas to soar economically so far past small-town and rural regions that analysts often describe local conditions as a tale of two states.
In a recent study, for instance, the “Urban Lab” at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin noted that what it called “the Texas Triangle – the great region bounded by San Antonio/Austin in the southwest, Houston in the southeast, and Dallas/Fort Worth in the north” accounted for the vast majority of the state’s economic output, attracted 98% of its venture capital and generated much higher wages than the state’s rural areas.
“It is a tale of two Texases,” the group wrote, “one, an urban powerhouse with a rising knowledge economy that craves more educated talent; and the other, smaller towns and open ranges whose legacy agriculture, manufacturing, and oil extraction businesses are contracting.”
The new Brookings data prepared for CNN show how widespread this pattern of metro concentration has become across America, including in the states that both sides consider most likely to decide the 2020 presidential election. Using federal Bureau of Economic Analysis data, Brookings at my request analyzed the share of employment and economic output generated by metropolitan areas of 500,000 people or more in nine states high on the 2020 target list for each party.
The results, Muro said, showed that “in virtually all cases the state is heavily dependent on at least one major metro and in most cases several.”
In Pennsylvania, for instance, larger metropolitan areas account for nearly 95% of the state’s economic output and 89% of its jobs. The Philadelphia metro alone accounts for nearly three-fifths of the state’s output and almost exactly half of its jobs.
The Phoenix area accounts for nearly three-fourths of Arizona’s output and jobs, with the total metro contribution (including Tucson) rising to about 86% of each. In Georgia, Atlanta provides two-thirds of the output and three-fifths of the jobs, with smaller metros raising those numbers slightly higher. In Texas, Dallas and Houston combine for about 55% of output and jobs, and the other large metros raise the share to about three-fourths of the total.
Large metros account for at least four-fifths of total economic output in Florida and Ohio, nearly three-fourths in North Carolina and about two-thirds in Michigan, where Detroit alone contributes about half. The big metros generated only a slightly smaller share of the jobs across those states, (except in Ohio where they contained slightly more.)
Only in Wisconsin, the least urbanized of the major swing states, did large metros account for less than half of the state’s economy, and even there the numbers for Milwaukee and Madison combined still reached 46% of output and 42% of jobs.
Economic experts across these states agree that they can’t regain cruising speed without a revival in these dynamic metro areas. For Texas, there will be no recovery “without those places restarting and getting out in front of this,” says Steven Pedigo, director of the LBJ School’s Urban Lab. “We have this frontier mentality but at the end of the day we are an urban state. The growth triangle is what has kept the state moving and growing.”
Likewise, Jeff Rosensweig, who directs a program on business, public policy and government at the Emory University business school in Atlanta, says flatly that “there’s really no way the state can recover unless there’s a lot more activity going on in Atlanta.”
But these are exactly the places where the disease has hit hardest. William Frey, a Brookings Institution demographer, has painstakingly documented the spread of the disease over the past few weeks into smaller communities, including many that Trump carried in 2016. But urban centers and their inner suburbs still account for two-thirds of all counties facing elevated caseloads, according to Frey’s calculations.
In Arizona, Maricopa County, centered on Phoenix, accounts for just over half of the state’s cases. In Michigan, where the outbreak appears to be finally ebbing, Detroit and its politically pivotal suburbs of Oakland and Macomb counties have accumulated almost two-thirds of the state’s cases.
Philadelphia and its four big suburban counties have likewise experienced almost three-fifths of Pennsylvania’s total. Economist Jed Kolko recently calculated that death rates remain the highest, by far, in the urban centers of large metropolitan areas – even when excluding New York City from the numbers.
Urban residents still feel cautious
A variety of data sources – from cell phone tracking devices to activity at online restaurant reservation services – show that in communities of all sizes of Americans are edging back into the economy as states loosen restrictions. But several recent polls have consistently found residents of large urban areas expressing more caution than those in rural areas about returning to anything approaching normal activity.
In last week’s national CNN survey, for instance, only 36% of urban residents said they felt comfortable resuming their normal routines, much less than the 55% of rural respondents who expressed such confidence, according to figures provided by CNN polling director Jennifer Agiesta.
And while a slight majority of rural residents said in the survey that the worst of the outbreak was behind us, a 55% majority of urban residents said the worst was still to come. The two groups offered mirror-image verdicts on Trump’s handling of the outbreak, with three-fifths of urban residents disapproving and three-fifths of rural residents approving. On all three questions, suburban residents fell in between, though generally much closer to the urban respondents.
Polling released earlier this month by the nonpartisan Pew Research Center likewise found that nearly three-fourths of urban residents said they worried that states would lift restrictions too fast (rather than too slowly), and only 1-in-6 said there should be fewer restrictions in their areas right now. Rural residents were considerably more likely to say that they worried about lifting restrictions too slowly and wanted fewer limits today (although in each case only about one-third of rural respondents took those positions).
These contrasting experiences and attitudes have fueled a second wave of conflicts over reopening between Republican governors and state legislative majorities whose political base is centered on smaller communities and the primarily Democratic leadership of the largest metro areas. Republican governors in Georgia, Texas and Arizona, as well as other states, have preempted Democratic mayors in their largest cities from continuing stay-at-home rules.
Texas GOP Gov. Greg Abbott conspicuously invalidated an ordinance in Harris County (Houston) imposing fines on people who would not wear masks in public. Acting on a legal challenge brought by GOP legislators, the Republican majority on the Wisconsin state Supreme Court last week struck down an extension of the statewide stay-at-home order imposed by Democratic Gov. Tony Evers (in a ruling cheered by Trump). Republican legislators in Michigan are pursuing similar litigation against the statewide order imposed by Democratic Gov. Gretchen Whitmer.
Little change in big cities
But the concentration of economic activity in the biggest cities suggests this is something of a pyrrhic victory for Trump and the GOP. In Wisconsin, local officials in Milwaukee and Madison, the state’s two most economically vibrant regions, immediately reimposed stay-at-home orders. “The immediate implication” of the state’s most bustling economic centers opting out of reopening “is a very slow recovery” for Wisconsin, says David Ward, an economic consultant in the state.
Remaining closed isn’t an option for mayors in the states where GOP governors have precluded stronger local action. But Democratic mayors and county officials in urban centers such as Atlanta, Austin, Dallas, El Paso and Phoenix have publicly expressed concerns that the restrictions are being lifted too fast.
In Phoenix, Democratic Mayor Kate Gallego posted a video on Friday urging residents to continue “to stay home as much as possible” and to wear masks whenever they are outside – just days after Republican Gov. Doug Ducey held a photo op lunch with legislators in a Phoenix restaurant where none of the participants wore a mask. Asked why Gallego continues to urge caution, Annie DeGraw, her communications director, said, “We are still so far behind on testing that it’s hard for us to even get a handle on where the virus is, where the hot spots are.”
Ducey’s office did not return a request for comment. Though state health officials have organized a testing “blitz” each Saturday in May to accompany reopening, Arizona has ranked at or near the bottom of the 50 states in the number of coronavirus tests conducted per capita.
Reed, the former Atlanta mayor, predicts that economic activity in big cities will lag so long as mayors remain unconvinced that reopening is safe. “I think you will continue to see the public defer to the local mayor, and that’s the signal that everybody will be waiting to hear from,” he said. “So while the economy is opening, I don’t think there is anywhere near the level of activity you would have if the mayor of Atlanta or Houston or San Antonio were in line with the governor’s policies.”
A new study led by Harvard economist Raj Chetty similarly concluded that “consumer spending, employment … the number of small businesses that are open, and time spent at work” changed little in Georgia, South Carolina and other states after their governors lifted stay-at-home orders.
Muro likewise expects a slow reemergence in the big population centers. He says he’s had repeated conversations over the past week with economic development groups in major metropolitan areas around the country that are skeptical of the rapid restart that Trump and many governors are promoting.
“I can tell you in the last 36 hours I’ve had multiple conversations with very senior CEO groups very, very concerned about what’s coming out of their governor’s office,” he said. “Metro business elites tend to prefer a science-based, prudent, graduated approach to these issues. … There is just a very visceral sense of caution.”
Cities bluer and small towns redder
These economic trends have a clear political overlay. While Trump has solidified the GOP’s hold on small-town and rural America, he’s accelerated its decline inside the largest metro areas. In 2016, he lost the nation’s 100 largest counties by a combined margin of around 15 million votes, and in 2018 the GOP lost House seats in a wide array of white-collar suburbs around cities from coast to coast.
In virtually every state, the largest metropolitan areas, which are driving economic innovation and growth, have become the clear backbone of the Democratic electoral coalition, while the GOP has grown more reliant on squeezing bigger margins out of smaller places that have not benefited as much from the new dynamics.
For years, a cadre of conservative-leaning urban critics have predicted that residents and businesses eventually will flee the expensive housing and high taxes of the big-city centers and relocate to red-leaning areas on the metropolitan fringes.
Now some of those same voices say the vulnerability to contagion exposed by the pandemic – combined with the outbreak’s spurring of telecommuting – will propel an exodus from the dense population centers. That might happen to some extent, Muro acknowledges, though he believes the underlying economic forces encouraging the “clustering” of talent and investment capital remain too powerful to significantly reverse.
But whatever the long-term prognosis, the economic dominance of the largest metro areas won’t diminish between now and November. And that means Trump can’t hope to truly revive the economy without more buy-in from the communities and voters who were the most skeptical of him from the outset – and have been the most badly battered by the outbreak this year.