America's heartland has seen economic growth in recent years and is outperforming the rest of the nation in some cases with manufacturing and farming anchoring the region, according to a report released today.
"State of the Heartland: Factbook 2018," a compilation of federal and state economic data, assesses the upsides and shortcomings of the U.S. Midwest since the housing market crash of 2008.
The compilation was made possible by the Brookings Metropolitan Policy Program and the Walton Family Foundation in Bentonville. The terms -- heartland and non-heartland -- are used in the report to refer to the nation's 19 mostly inland, noncoastal states, and the remaining 31 states, respectively.
"In many respects, the heartland is doing all right," said Mark Muro, co-author of the report and senior fellow at the Brookings Institution, a Washington D.C. think tank. "I think there's still a perception that the region has lower standards of living and is poorer, and it is in some places," but when the median wage is adjusted for the cost of living, Muro said, "it is significantly superior to the nonheartland states."
According to the report, the total median wage for the heartland rose 0.6 percent to $30,000, from 2010 to 2016. Meanwhile, the median wage for the nonheartland areas fell 0.4 percent to $28,000. Increased consumer costs outside of the heartland, particularly in housing, have led to the disparity.
The report "answers questions about how the [heartland] region could be an attractive place in migration or in investment," Muro said.
Still the region can't shake its relatively lackluster reputation. Challenges stemming from "weak human capital and low innovation capacity" persist, said Ross DeVol, a co-author of the report and Walton fellow who researches the economic vitality of Northwest Arkansas.
The Walton Family Foundation developed the terms for the 110-page report. The heartland, whose economy is bigger than Germany's but slightly smaller than Japan's, comprises U.S. states spanning from North Dakota to Ohio, and Oklahoma to Tennessee. Gulf states, like Louisiana, are included. Texas is not.
A few areas where the heartland surpassed the rest of the country in economic growth came from advanced manufacturing in the eastern half and agribusiness in the western half, according to the report. Many of the heartland's issues, DeVol said, stem from a lack of educational resources.
Bachelor's degree attainment grew nationwide from 2010-16, but the gap between the heartland and the rest of the country widened, according to the report. About 28 percent of adults in the heartland had bachelor's degrees in 2016, compared with 32.6 percent of adults living outside of the area. Much of the heartland's drag came from its more southern states, including Mississippi (21.8 percent) and Arkansas (22.4 percent).
The region also faces a continuing opioid crisis and a persistent income gap, which has led to more people leaving the heartland. From 2010-17, the heartland's population increased by 2.2 million. The rest of the country, meanwhile, grew by 14.2 million.
"Nothing is particularly surprising [about the report]," said Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas, Fayetteville. "In general, the middle of the country does not perform as well as the rest of the country. You compare Arkansas to some of the other states, and we don't perform as well in some of these metrics, but we do well in others."
Drivers that bolstered the state's economy since 2010 included more advanced industry employment, more exports, population growth, increased bachelor's degree attainment, more research and development spending, and increased home values, according to the interactive online report made available at factbook.theheartlandsummit.org.
Business on 10/18/2018