Will economic improvements in some counties influence voters?

Transcript

LEILA FADEL, HOST:

Some hopeful economic news this morning for communities across the U.S where people are struggling financially. They're rebounding from the pandemic faster than other parts of the country. They're seeing the strongest wage and business growth in decades, but their population growth and income still trail the rest of the country. That's all according to a new report from the Economic Innovation Group, which looked at 1,000 counties in the country that the report describes as left behind. The Economic Innovation Group is a think tank that researches economic solutions to inequality in the U.S, and to delve deeper into these findings, we're joined by John Lettieri, president of the Economic Innovation Group. Good morning. Thanks for being on the program.

JOHN LETTIERI: Good morning.

FADEL: If you could just start by laying out what it means when you call a community left behind.

LETTIERI: Sure. Well, we wanted to understand the left-behind communities of the 21st century, and so we looked at places that were lagging the national growth rates of population and median household income by half or less, so these are slow-growth or no-growth places.

FADEL: And what's behind the significant growth in recent years - I mean, these findings that you found?

LETTIERI: Yeah, it's a major question. Certainly, there was no fixed left-behind-communities button that somebody pushed in Washington. It's not that simple of a story. I think in terms of what set the stage for a very strong recovery - and something, by the way, that looks absolutely nothing like what we saw earlier in the 21st century, when both jobs and businesses were extremely anemic, if not in the negative...

FADEL: Yeah.

LETTIERI: ...For these communities, I would point to the very strong and swift fiscal response to the COVID crisis. I think that helped set the stage for a strong recovery in these communities, as it did elsewhere, but what's so interesting about this is it's a huge contrast to what we saw with the Great Recession. These communities actually never recovered from the Great Recession. They never recovered the jobs that they lost to that crisis. They're on track to recovering those jobs now. In fact, as a group, they've almost fully recovered their lost jobs, and I think we have to look at the different nature of the response to the COVID crisis for a partial explanation for why.

FADEL: When you say the different nature - I mean, when you talk about the policies that brought about that rebound, are those Biden administration policies, Trump administration policies?

LETTIERI: Well, it obviously started under the Trump administration, in a bipartisan way, with the CARES Act and the different nature - it was swift, and it was more aggressive. It was a much larger fiscal response that was felt broadly across workers and families and businesses in every region of the country. And so that's not a full explanation for why this bounce-back looks more united as a country between left-behind areas and the rest of the country, but it does, I think, lay the foundation for giving these places a chance to spark that kind of comeback. Then when we look at businesses, the business formation that we're seeing in left-behind areas actually outpaces what the rest of the country looked like at the peak of the pre-COVID business cycle. It's really an absolutely remarkable turnaround that, again, just wouldn't have been predicted by any past performance.

FADEL: And really quickly, I mean, residents in these counties still struggle more than the rest of the country, and your report shows that that gap is widening. Why?

LETTIERI: Yeah, it's actually true that even with this huge change in trajectory, they're still losing ground to the rest of the country because the rest of the country is growing even faster, and so that shouldn't come as a huge surprise. I think the absolute turnaround is more important than the relative performance to the rest of the country, but inflation has really taken a hit out of these communities, so that's also the - kind of the other side of the coin here is they're still struggling.

FADEL: John Lettieri is the president of the Economic Innovation Group. Thank you for being here.

LETTIERI: Thank you. Transcript provided by NPR, Copyright NPR.