Antitrust Enforcement as Federal Policy to Reduce Regional Economic Disparities

• Author: Robert Manduca
• Published date: 01 September 2019
• Date: 01 September 2019
• DOI: http://doi.org/10.1177/0002716219868141
• Subject Matter: Prescriptions: Jobs, Wages, and Regional Development

156 ANNALS, AAPSS, 685, September 2019

DOI: 10.1177/0002716219868141

Antitrust

Enforcement as

Federal Policy

to Reduce

Regional

Economic

Disparities

By

ROBERT MANDUCA

868141ANN The Annals of the American AcademyAntitrust to reduce Regional Economic Disparities

research-article2019

Regions of the United States have seen their incomes

diverge dramatically over the last four decades. This

article makes the empirical and political case for treat-

ing regional economic disparities as a national phenom-

enon best resolved through federal policy, rather than

exclusively as a matter of local responsibility. It then

considers reinvigorated antitrust enforcement as an

example of a federal policy that would strengthen local

economies while benefiting from policy feedback

effects.

Keywords: inequality; regional disparities; antitrust;

policy feedbacks

The last 40 years have seen a dramatic wid-

ening of economic disparities between

regions of the United States. A handful of rich

coastal metros have seen their incomes grow

substantially, while large regions of the country

struggle with unemployment and stagnation.

This regional inequality is uniquely consequen-

tial for U.S. politics because political power is

distributed geographically, meaning that unlike

other social groups, struggling places are guar-

anteed to keep their representation.

In this article, I argue that rising regional

inequality should be thought of first and fore-

most as a consequence of national economic

policy—that is, it stems from political decisions

made at the federal level. In addition to being

an accurate reflection of the forces that have

buffeted many parts of the United States since

1980, this framing will help to generate the

political will to address regional divergence,

particularly from within struggling regions

themselves.

Robert Manduca is a PhD candidate in Sociology

and Social Policy and a doctoral fellow in the

Multidisciplinary Program in Inequality and Social

Policy at Harvard University.

Correspondence: rmanduca@g.harvard.edu

ANTITRUST TO REDUCE REGIONAL ECONOMIC DISPARITIES 157

Second, I explore the policy feedback dynamics in one national policy area

with important regional implications: antitrust enforcement. There is a grow-

ing movement to strengthen antitrust policy in light of rapid corporate consoli-

dation in recent years. Here I describe why antitrust enforcement has

important implications for regional economies and how a new antitrust regime

could benefit from policy feedback effects that would help to entrench and

expand its impact once established. I also highlight some advantages that may

make antitrust enforcement easier to enact than other federal regional devel-

opment policies, as well as some strategic considerations in the initial

enactment.

The Geographic Concentration of Prosperity

One of the most wrenching social and economic shifts to hit the United States

over the past 40 years has been the geographic concentration of prosperity.

Since 1980, the income gap between the richest and poorest regions of the

country has widened by 50 percent, a reversal of more than 100 years of eco-

nomic convergence (Ganong and Shoag 2017). A handful of metro areas have

seen concentrations of wealth almost unprecedented in human history, while a

much larger set has seen their jobs evaporate and their economic bases con-

tract. In addition to the direct economic pain this causes, it likely contributes

to family instability (Autor, Dorn, and Hanson 2017; Wilson 1996), diminished

mobility prospects for children (Sharkey 2013; Sharkey and Faber 2014), and

declining social and political cohesion (Beramendi 2012).

The size of the change is shown in Figure 1, which plots mean family income

by commuting zone (a definition of metro area comprising a central city and sur-

rounding suburban counties) as a fraction of the national mean family income in

1980 and 2013. In 1980, the picture is one of relative consistency across most of

the country. New York (specifically the New Jersey suburbs) and Washington,

D.C., stand out as cities with mean incomes more than 20 percent higher than

the nation as a whole, while rural parts of the Southeast and Southwest had

incomes substantially lower than average. Across the rest of the country, average

incomes fell into a tight band between 80 percent and 120 percent of the national

mean.

By 2013, this was no longer true. Most of the East Coast had joined New

York and D.C. in the highest income category, as had northern California and

Minneapolis-St. Paul. At the same time, rural economies across the country

had hollowed out, with most rural parts of the Pacific Northwest, the Midwest,

and California joining those in the Southeast and Southwest in the bottom

income category. In total, whereas just 12 percent of the U.S. population in

1980 lived in commuting zones with mean family incomes more than 20 per-

cent higher or lower than the national average, by 2013 the share had climbed

to 31 percent.