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Hollowing Out?

November 22, 2011

Well-written books like Hollowing Out the Middle and Caught in the Middle have noted the net outward migration of education populations to urban areas. The Federal Reserve Bank of Chicago shows that real per capita income shows there is not as much disparity in real income per capita between the upper Midwest metro areas and non-metro areas as one might guess.

Iowa, where research in Hollowing Out the Middle was based, has transformed from agriculture as a final good to agriculture as an input into manufacturing. The greater value-added from manufacturing–such a Marxian concept, I know–has helped keep real income higher in the non-metro areas.

This data does not negate the other concerns raised by the authors of the aforementioned books, but non-metro areas can provide a base for manufacturing that may not be easily outsourced.

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