Amber Waves of Greatness: Promoting Prosperity in Middle America

Economic Growth Disparities

• While the U.S. unemployment rate stands at 4.1% with 6 million job openings (a peak since before the 2008 financial crisis), growth has not been geographically uniform.
• Since 2014, job growth in "heartland" states (primarily the Great Lakes region) has diverged significantly and lagged behind national averages.
• Average manufacturing wages, once higher than total non-supervisory wages, have grown more slowly since the recession due to pressures from globalization and automation.
• Larry Summers notes that 12% of prime-age men (25-54) are not in the labor force, compared to 4% in the late 1960s, with Flint, Michigan showing a non-working rate of nearly 50% versus 3% in Arlington, Virginia.

Government Fiscal Constraints

• Federal and state spending power is strained; real spending on the Workforce Innovation Opportunity Act has nearly halved since its inception, even after recent $80 million injections.
• Government investment as a percentage of GDP is dropping sharply, with federal investment effectively flat when adjusted for depreciation.
• Many states face revenue shortfalls, leading to fiscal pressure on education and public services, exemplified by recent teacher protests in Oklahoma.

Michigan's "Marshall Plan" for Talent (Governor Snyder)

• Michigan has reduced its unemployment rate from 14.5% to approximately 3.5-4.0% under current administration policies.
• The state launched a five-year, $100 million "Marshall Plan for Talent" to address skills gaps and revolutionize vocational training.
• Michigan ranks #6 nationally for private sector job creation (540,000 jobs) and per capita income growth over the last seven years.
• The state is prioritizing a "revolution of convergence," specifically targeting the integration of autonomous/connected vehicles with the IT and biotech sectors.
• Detroit housing occupancy in midtown and downtown has reached 98%, signaling a rapid urban resurgence.
• Governor Snyder initiated vocational programs in correctional institutions (vocational villages), offering skills like master's mechanics certificates with salaries potentially exceeding $80,000.

Montana's Entrepreneurial Ecosystem (Governor Bullock)

• Montana ranks in the top 5 nationally for entrepreneurial activity despite being geographically distant from major tech hubs.
• State-level venture funding has increased from $2 to $86 per capita, though 75% of all U.S. venture capital remains concentrated in California, New York, and Massachusetts.
• The state achieved a 52% increase in student internet connectivity over three years, bringing 95% of students to FCC compliance standards.
• Montana enacted the first state-level executive order on net neutrality after the FCC rollback.
• Key barriers to growth are identified as lack of capital access and workforce training rather than business climate or tax issues.

Corporate Perspective and Technology (Devin Wenick, eBay)

• Wenick describes the lack of mandatory K-12 computer science education as a "national embarrassment" threatening future competitiveness.
• The "sharing economy" generates income for 25% of Americans, but roughly 70% of that income flows to coastal regions, leaving Middle America as an untapped market.
• eBay facilitated nearly $1 billion in sales to Michigan companies and $50 million to Montana companies in the last 12 months.
• Wenick warns against focusing solely on protecting 1990s industries (citing Kodak's decline due to focus on trade barriers rather than innovation) and advocates for global market access.

Structural and Policy Challenges

• Mobility: The U.S. rate of population migration has declined significantly, preventing labor from moving from low-demand to high-demand areas; however, Summers warns that migration often removes the most capable leaders from struggling regions.
• Wages vs. Skills: While Summers argues labor shortages are often wage-related (choice of what to pay), Snyder contends structural skill gaps and cultural biases against trade schools prevent workers from filling high-paying technical roles.
• Trade Policy: Snyder notes Michigan is a top trading partner with Canada, Mexico, Germany, and China, warning that broad tariff wars create anxiety without solving specific intellectual property or competitiveness issues.
• Infrastructure: Current federal infrastructure plans are deemed insufficient; the U.S. lags in digital infrastructure and face high regulatory costs that delay projects (e.g., a 400-foot bridge repair in Boston took five years vs. nine days in ancient Rome).
• Inequality: Summers highlights a century-long trend where life expectancy for middle-class men is declining, a demographic signal of societal distress that requires targeted federal place-based policies.

Forward-Looking Recommendations

• Implement federal place-based policies similar to the Earned Income Tax Credit but targeted at employers in depressed areas and hiring disadvantaged groups (ex-convicts, disabled).
• Shift education focus from a four-year degree mandate to competency-based certificates in trades and computer science.
• Increase investment in digital infrastructure (connectivity) in rural areas to enable participation in the sharing and global e-commerce economies.
• Consider private-sector involvement in infrastructure (like Europe's model) to bypass U.S. regulatory inefficiencies and accelerate construction.
• Governors and businesses must collaborate on workforce pipelines to ensure companies have a "talented and trained pipeline" rather than just relying on favorable tax climates.