🚨 NEW: Leading the WSJ homepage this AM is an exclusive look at a new report from the team @InnovateEconomy on how American communities have become heavily reliant on income from government transfer programs.

We call this “The Great Transfer-mation.”

Let’s dig in. What is the Great Transfer-mation?

In 1970, less than 1% of counties — generally the most distressed areas of the country — derived a quarter or more of total personal incomes from government transfers. 

In 2000, only about 10% of counties did. 

But by 2022, 53% did.

NEW: America’s left-behind counties have just notched their best 3-year stretch of job and business creation so far this century—and nobody saw it coming. 🧵 This analysis looks at counties that experienced less than half the national pace of population and median household income growth from 2000 to 2016.

All told, that’s over 1,000 “left-behind” counties home to about 18% of the U.S. population.

In my recent paper with @ModeledBehavior & @BenGlasner, we make the following claim:

"If the U.S. economy is failing in some fundamental way, workers themselves have yet to find out."

Let me unpack that by highlighting results from three long-running surveys of U.S. workers. The General Social Survey finds 87% of workers are very or moderately satisfied.

In fact, throughout the entire history of the GSS, through periods of deep recession and surging growth, the share of satisfied workers has never been lower than 80%. Remarkable consistency!

There has been a major—and almost entirely unnoticed—advance in the research on the most significant place-based incentive on the books. That’s right: it’s time to update your priors on Opportunity Zones! Today colleagues @kenanfikri @AugustBenzow and I are out with an analysis of two very important studies on the size and effects of Opportunity Zones investment.
Bottom line: OZs are having impact on a scale not seen with previous place-based policies.
eig.org/opportunity-zo…

Enacting a Heartland Visa program to connect skilled immigrants with welcoming communities has been one of @InnovateEconomy’s top priorities since releasing the proposal with @ModeledBehavior in early 2019.

It’s amazing to see how far this idea has come in two short years. 1/

https://twitter.com/doug_rand/status/1362597288644907011

Mayors were some of the first to embrace the idea—leaders like @nanwhaley, @QuentinHart, and @AkronOhioMayor were vocal right out of the gates: eig.org/news/economic-… 2/

Read this carefully and ask yourself: Does the story actually substantiate the claim made in its headline?

Hint: not one bit.
bloomberg.com/news/features/… This story is the latest in a genre of sensationalized stories on Opportunity Zones that conflate “investing in an area designated as an OZ” with “qualifying for the OZ tax incentive.” They’re 👏not👏the👏same👏thing!

The author knows this, obviously, but most readers don’t.

Some have asked why this cap on non-payroll related loan forgiveness is a big deal under the #PaycheckProtectionProgram, so I’m going to do a quick thread explaining how the 25% cap changes the math dramatically for small businesses.
1/

https://twitter.com/LettieriDC/status/1245376540868739073

Let’s say a business let go of half its staff in March, received the PPP loan in April, rehired back to pre-COVID levels in June. Under the statute, the entire loan amount could be forgiven. Sounds good, right?

Wrong! Per Treasury, the forgiveness amount would be 47% lower.
2/

I’m a fan of @MichaelRStrain and read with great interest his piece on how to help workers in struggling areas.

In short, he argues for people-targeted policies instead of so-called “place-based” policies.
1/
bloomberg.com/amp/opinion/ar… Strain correctly notes the challenges posed by regional inequality and declining geographic mobility even in the midst of a healthy national economy.

In spite of growing divides between thriving and struggling areas, Americans are simply not moving at the rates they once did.

For absolutely no reason in particular, let's take a look at the economic well being of congressional districts throughout the United States. How do local distress and prosperity correspond with the party holding the seat, and what does that really tell us? If we look at the 25 most distressed districts nationwide, it's clear this isn't simply a Democratic or Republican issue. The most distressed district in the country is held by the GOP. In total, the GOP holds a roughly proportional 11 of the 25 most distressed districts.

On this slow news day, here are some thoughts on how the new #OpportunityZones regs are a game-changer for investment in local operating businesses, as covered by @jimtankersley in today’s NYT.
nytimes.com/2019/04/17/bus… The new regs cover lots of issues that will help the marketplace scale, diversify, and avoid abuse. But most importantly, they remove some of the most significant uncertainties that have held back investment in local entrepreneurs & businesses with growth potential.