Money  /  Debunk

Economic Mobility, Not Manufacturing Decline, Is the Real Rust Belt Story

A look at popular interpretations and actual labor fluctuations in the Rust Belt over time.

There is no doubt that the region has many visibly shuttered factories and cities and towns with population declines. However, even this phenomenon is nothing new. Ghost towns commonly popped up in the United States before World War II, and even before the Civil War, when small towns folded because the single industry they were dependent upon—often some type of mining or agriculture—dried up.

The key question is whether people from the Rust Belt and surrounding areas have grown poorer or richer over time.

One way to answer this question is with US Census data that provide annual personal income by place of birth and residence. This feature allows us to examine the (inflation-adjusted) median personal income for Americans who were born in the Rust Belt and still live there. It also lets us compare income for those who were born in the Rust Belt and left, those who were born outside of the Rust Belt and still live there, and those who were born outside of the Rust Belt but migrated there.

As Figure 1 shows, all four groups showed substantial income growth between 1960 and 2023, completely contrary to the notion that income stagnated or declined. The highest-earning group among these four is those who were born in the Rust Belt and moved elsewhere, i.e., the Rust Belt diaspora. Thus, being from the Rust Belt can hardly be seen as an impediment to success—on the contrary, many people from the Rust Belt have been seeking and attaining success elsewhere.

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Those born and living in the Rust Belt had an edge over those born elsewhere (whether living in the Rust Belt or elsewhere) from 1960 until 1980. However, since 1990, the difference among these three groups has narrowed. Furthermore, income growth across all regional groups holds whether we look at workers with or without a college degree.

As Table 1 demonstrates, people who were born in and are living in the Rust Belt now earn 56 percent more real income in 2023 compared to 1960. Yet, those Americans who migrated to the Rust Belt enjoyed even more real growth (81 percent), suggesting that the “rust” in the Rust Belt was not what the name implies. Furthermore, the Rust Belt diaspora and those who were born and are living elsewhere enjoyed even greater income growth, at 94 percent and 110 percent, respectively.

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