Policymakers must address economic distress from globalization and automation

In the United States, discussions around regional economic distress due to globalization and automation have been ongoing, particularly since the 1980s. Mark Muro, a senior fellow at the Brookings Institution, and Gordon Hanson, an urban policy professor at Harvard’s Kennedy School, have delved into these issues, highlighting how certain regions are struggling with job losses that create generational pain and hinder adaptation. Many individuals, especially those without a college degree, tend to age in place rather than relocate, complicating efforts to transform local economies toward new growth options. Muro emphasizes the urgency of developing effective place-based industrial policies to facilitate this transition and help these struggling communities discover new comparative advantages. The role of federal policy has evolved with administrations shifting focus, which has historically disrupted continuity in addressing economic distress. Recent discussions noted the need for careful policy design, especially in light of the challenges and lessons learned from the last administration’s trade policies. There is also a consensus on the importance of social safety nets for the affected regions, which tend to have higher poverty levels that qualify for federal assistance. The Biden administration’s approach aims to build on existing programs to create a mechanism for spreading knowledge and successful practices among the regions facing economic hardships. Overall, the dialogue underscores the importance of recognizing the specific needs of each region and providing the necessary support and resources for economic revitalization.