Incomes Falling Across U.S. Counties, Hispanics Affected
According to new research published by Pew Charitable Trusts last Friday, incomes have fallen across most U.S. counties since the year 2000, showing distinct regional trends. The findings highlight the ongoing rise in standards of living in certain areas due to the fracking boom, but also reveal the decline in American manufacturing and the lingering effects of the housing bust. Both of the latter have disproportionately impacted the Hispanic community – due to the rate at which they are represented in the respective industries — which underscores the importance of free trade to boost manufacturing and sound money policies for U.S. Hispanics.
In the interactive map, the roughly 3,000 counties of the United States are shaded according to their percent change in median income over the period from 2000-2014. The map shows a number of interesting patterns, but the most striking feature is how few counties experienced any increase in median incomes at all. Most of the map is shaded red, with only a few geographic areas shaded green to indicate rising incomes. Importantly, the largest areas to experience rising incomes are concentrated in the Dakotas, continuing down through Oklahoma to West Texas and the Gulf Coast. These regions are home to the fracking boom, and policymakers must avoid excessive regulation of the energy industry in the coming year if they wish to sustain the employment levels and rising standards of living that have come about as a result of it.
The author of the Pew report attributes the widespread decline in median incomes across the rest of the country to a decline in manufacturing jobs, which have fallen by 27% nationwide since the 2000s. However, this decline is particularly relevant to U.S. Hispanics, who are overrepresented in the manufacturing sector. While these losses were partially buffered by the housing boom of the 2000’s, this mitigating factor actually further complicates the issue for the Hispanic population. More so than their non-Hispanic counterparts, many Latinos held a considerable share of their net wealth in home equity, and the collapse of the housing bubble resulted in a 66% fall in Hispanic household wealth from pre-recession levels. Moreover, the millions of Hispanics who worked in the construction sector were particularly hard-hit by the housing bust.
Given that the housing bubble was largely inflated by the loose monetary policy of the years leading up to the financial crisis of 2008, U.S. Hispanics have a lot to gain from sound money policies. In order to alleviate the decline in manufacturing, policymakers should favor free trade policies to enable U.S. exports, and pursue sound money policies that will prevent distortionary bubbles in the future. Low regulation of the energy industry, opening markets to free trade, and sound monetary policy could have dramatically changed the color of Pew’s map. In order to improve it, moving forward, those are the policies U.S. Hispanics should demand.