[By Guancha Observer, Shao Yun]
For over two decades, one of the most popular narratives among both Republican and Democratic politicians in the United States has been that China, Mexico, and others are the "culprits" responsible for the decline of the northern U.S. "rust belt." However, this narrative does not fully reflect the reality.
On May 14, Gary Winslett, an assistant professor in the Department of Political Science at Middlebury College, wrote an article in The Washington Post, directly pointing out that both parties are keen to adopt such narratives primarily to target swing voters who long for past glories, thus earning more votes.
In Winslett's view, the main reason for the decline of the northeastern and midwestern "rust belt" is not that jobs have moved overseas, but rather to the southern states of the U.S., which have actively attracted many manufacturers by promising a business-friendly policy environment. He also pointed out that President Trump's tariff policies are harming the manufacturing industry in the southern states, urging both parties and the public to face the "real reasons" for the loss of manufacturing and make changes.
On November 4, 2024, local time, in Pennsylvania, USA, Trump attended a campaign rally. Visual China
Winslett stated that the "inter-state competition" within the United States is an important part that has been deliberately ignored in the narrative about the "hollowing out" of American manufacturing by both parties.
The World Trade Organization (WTO) report released last year, the 2024 World Trade Report, showed that over the past few decades, the proportion of exports from the "rust belt" regions such as Illinois, Pennsylvania, Ohio in the United States and Southern states such as Alabama, South Carolina, Georgia, and Tennessee has swapped places in U.S. exports - in 1970, the "rust belt" accounted for nearly half of U.S. exports, while the Southern states accounted for less than a quarter; in 2020, the "rust belt" accounted for less than a quarter of U.S. exports, while the Southern states' exports were twice that of the "rust belt."
From 1960 to 2020, the percentage change in total exports across the United States for "rust belt" states (blue) and Southern states (green), 2024 World Trade Report
"This migration was not accidental, but driven by specific policy choices," Winslett said. In order to attract manufacturing companies to settle down, state governments in the Southern states made significant efforts in improving the business environment, reducing energy costs, and simplifying approval systems.
A study published in 2018 by Simeon Alder, an assistant professor in the Department of Economics at the University of Wisconsin-Madison, and others found that labor conflicts are the main cause of the decline of the "rust belt." Winslett said that, compared to this, the "right-to-work laws" in the Southern states provided greater operational flexibility, attracting more capital.
So-called "right-to-work laws" essentially mean that workers are not required to join unions or pay equivalent dues as a condition of employment. It is reported that the average unionization rate in the "rust belt" is 13.3%, while it is only 4.3% in the Southern states. Political leaders in the Southern states have publicly acknowledged that they believe "right-to-work laws" are the foundation of their competitiveness.
The electricity prices in the Southern states are generally lower than those in the "rust belt." Winslett pointed out that there are 10 states in the U.S. South with industrial electricity prices below 8 cents/kWh, while none of the "rust belt" states reach this level. As for tax burdens, 10 out of the 15 states with the lowest tax burdens in the country are in the South.
According to Winslett, the Southern states also have cheaper industrial land, faster project approval speeds, and "more" immigrant labor than any other region. It is reported that some state governments are willing to provide free land support to attract major projects. The article cited the opinion of an industry analyst who said, "For large-scale projects planning to hire three thousand, four thousand, or even five thousand people, you can find free land."
More importantly, despite economic growth, the Southern states have ensured sufficient housing supply over the years, to some extent suppressing house price increases, making these areas more suitable for worker settlement, further attracting capital, and bringing more investment and job opportunities. Winslett believes that this has created a "virtuous cycle" for the development of local manufacturing.
According to data from the U.S. Census Bureau, last year, North Carolina and South Carolina built more than four times as much new housing per capita as Massachusetts. The per capita new housing construction in Southern states such as Florida, Georgia, Texas, Tennessee, South Carolina, and North Carolina exceeded the total of Illinois, Ohio, Michigan, Pennsylvania, California, New York, and Massachusetts.
The combination of the above factors has had a huge impact. The article gives an example: In 1992, Alabama did not have a single car factory, but now, Alabama has become the largest automobile exporting state in the United States, attracting investments from Honda, Toyota, Hyundai, Mercedes-Benz, and Mazda, producing more than one million vehicles annually, providing over 50,000 jobs for the state.
Why do the two parties in the U.S. refuse to acknowledge these "disturbing facts"? Winslett analyzed that the reasons for Republicans and Democrats differ, but ultimately serve their own political interests. For Republicans, around the nostalgia for manufacturing, they have constructed a complete political narrative, promoting Trump's tariff policies as a "panacea" to revive the prosperity of U.S. manufacturing in the 1970s, thereby attracting swing voters.
Democrats also have their own set of reasons. They attribute the decline of manufacturing to "globalization shock" rather than "inter-state competition," because the latter means acknowledging that "right-to-work laws" have helped the Southern states succeed in manufacturing, acknowledging that faster approval procedures have promoted economic development in the Southern states, and acknowledging that lower energy costs (often from fossil fuels) have attracted manufacturers to the Southern states, challenging the Democratic stance of supporting unions, supporting regulations, and supporting environmental groups.
But the problem is that the cost of such "false narratives" is real. Winslett pointed out that Trump's tariffs are hurting the rising Southern manufacturing industry. Half of the 700,000 engines produced by Toyota in Alabama may be exported to Mexico or Canada, and are very likely to be "misinjured" by trade countermeasures.
A cruel reality is that manufacturing does not follow nostalgia, but follows profit. If Republicans are unwilling to acknowledge the contribution of immigrant labor to the manufacturing industry in the Southern states, and unwilling to acknowledge that even if manufacturing returns, it may not return to the "rust belt" where policies are not friendly enough, and if Democrats are unwilling to face the role of policies in various Southern states in their manufacturing development, perhaps the revival of American manufacturing still has a long way to go.
"Both parties like to shape simple 'villains,' whether it's China or greedy businesses. But what we need is not a sentimental memory of the past, nor to scapegoat globalization, but a clear mindset," Winslett said. In his view, the future of the U.S. economy depends on whether both parties are willing to accept these realities instead of indulging in fantasies of time travel.
This article is an exclusive article by the Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7504705240852939305/
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