Economic Clustering

Major U.S. coastal cities have enjoyed most of the nation's economic gains since the last recession, thanks to the rise of technology and their highly educated workforces. This clustering has caused widespread issues. The number of jobs and businesses in much of the nation has stagnated or declined since the 2007-08 financial crash, particularly in rural areas. The richest cities faced challenges as well, including high housing costs, homelessness and congestion, while racial and economic disparities worsened. But the COVID-19 pandemic and the resulting recession could shift the economic landscape. Some experts predict that people and companies will flee crowded, expensive cities, as remote work allows businesses to shift high-paying jobs elsewhere. As yet, however, major cities have not suffered serious economic declines. Even as people relocate, they are likely to move to a new set of “winners,” leaving most rural areas and old industrial centers to continue their struggle. All this has policymakers debating whether the federal government should target research and development dollars to less competitive areas.