Hillbilly Middle Class: There's No Going Back To The 1950s' Economy

by: Bill Conerly

The blue-collar middle class won’t go back to where it was in the 1950s because that period was the aberration, not the norm. I made that point in Why Trump Cannot Help His Blue-Collar Supporters, and just ran across a telling example in the book Hillbilly Elegy by J.D. Vance. He tells how, in the 1950s, a major steel company recruited people from the Kentucky hill country to work in the Ohio steel mills.

The location was all important then, so business paid high wages to get workers to move. I wrote in the earlier article:

Steel requires iron ore and coal. Both of these are expensive to transport but not always found together. The Great Lakes region is an ideal steel-making area. Iron ore can be shipped from the Mesabi Range by water, and coal is nearby in Appalachia.

When the steel industry grew, and the auto industry blossomed alongside it, there were not enough workers in Ohio and Pennsylvania and Indiana. The plants could not be moved to where the workers lived, so wages rose to lure them to Cleveland and Pittsburgh and Gary.

After reading Hillbilly Elegy, I did what any good economist would do: looked up Ohio’s population data. The 1950s were the fastest growing decade for Ohio in the 20th century. Sales of cars and consumer appliances were booming, and they had to be made in the industrial Midwest.

Chart by Bill Conerly from U.S. Bureau of the Census data

Ohio Population Growth

Today, if a company spotted good workers available at a good wage, they would likely move the plant to where the workers are. When foreign automakers set up shop in the U.S., they located in the South. Plenty of service companies have located call centers in Arizona to take advantage of the people who moved there for the weather.

Because so few jobs are location-dependent today, few people move to take higher-paying jobs. Worker mobility is down in the U.S. That’s not altogether bad. Let’s say that a person is making $20 an hour in a town where the whole extended family lives. The person can move away and earn $25 an hour. What makes the person better off? Dollar income is not the same as happiness, as any good economist can tell you.

Back to Hillbilly Elegy, Vance quotes Dwight Yoakam’s song “Readin’, Rightin’, Route 23.” Those who moved north for factory jobs made more money than the coal miners back home, Yoakam sings, but they found misery away from their families.

Whether the president is Donald Trump or Bernie Sanders, there’s no going back to the 1950s.