Politics

These charts show how Democrats represent the growing modern economy – and how Republicans are left behind

Key Points
  • Among other results, this year's midterm elections affirmed this much: in Washington, the two parties now speak for dramatically different segments of the American economy.
  • Republicans represent the smaller, fading segment, while Democrats represent the larger, growing one, fueled by finance, professional services and digital innovation in diverse urban areas.
  • With a few races still undecided, data from the Brookings Institution show that districts won by Democrats account for 61 percent of America's gross domestic product, districts won by Republicans 38 percent.

Among other results, this year's midterm elections affirmed this much: in Washington, the two parties now speak for dramatically different segments of the American economy.

Republicans represent the smaller, fading segment, with less-educated, more-homogenous work forces reliant on traditional manufacturing, agriculture and resource extraction. Democrats represent the larger, growing one, fueled by finance, professional services and digital innovation in diverse urban areas.

The 2016 presidential race had signaled as much. Donald Trump carried 2,584 counties across the country, but calculations by scholars at the Brookings Institution showed that the 472 counties Hillary Clinton carried accounted for nearly two-thirds of U.S. economic output.

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Now, new Brookings calculations show the same from 2018 House elections. With a few races still undecided, districts won by Democrats account for 61 percent of America's gross domestic product, districts won by Republicans 38 percent.

That economic separation underpins cultural divisions that usually command more attention. Says Brookings researcher Mark Muro: "The Democratic Party and Republican Party, at this point, really do occupy different economic worlds and represent different economic worlds."

Analysis by the Brookings Metropolitan Policy Program documents the gap between them. Residents of districts won by Democrats generate 22% more output per worker, and have a 15% higher median household income.

In Democratic districts, 35 percent of residents have college degrees, compared to 28 percent in Republican districts. Employees are less likely to work in manufacturing (7.2 percent in blue districts, 11 percent in red districts) and more likely to work in digital services (2.5 percent compared to 1.1 percent).

Blue districts have attracted the expanding segments of the U.S. population and workforce; half their residents are non-white. Red districts are 27 percent non-white.

The new Congress starkly demonstrates those differences. Nine of 10 of House Republicans will be white men, calculates David Wasserman of the Cook Political Report, compared to just over one-third of House Democrats.

This array of measures reflects the concentration of Democrats in metropolitan centers and Republicans in small towns and rural communities. Population density in blue districts is nearly five times the level in red ones.

Comparing the 19 states that have elected two Democratic senators to the 21 with two Republicans shows similar disparities. The eight most affluent areas Muro calls "superstar metros" display an even greater partisan tilt.

Those eight – Boston; Bridgeport, Conn.; New York; San Francisco; San Jose; Seattle; Trenton N.J.; and Washington, D.C. – accounted for 16.4 percent of national job growth and 35.7 percent of digital services job growth between 2010 and 2017. Not a single Republican senator represents any of them. Of their combined 81 House seats, Democrats won 71 last week.

That makes economic divergence as central to 21st century polarization as race, gender and religion. And it highlights challenges for both parties as a Democratic House and Republican Senate share power in Congress.

Within the Democratic Party, it fuels tension between trade-friendly metropolitan economies and historic industrial union allies seeking trade protection. Less-affluent Democrats bridle at how booming tech firms – such as Amazon, which announced new headquarters for New York and the Washington suburbs this week – widen income inequality and price the working-class residents out of their communities.

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Between the parties, economic divergence pits Democrats promoting investments in research, skills training and infrastructure against Republicans resistant to taxes and spending. Those clashes cloud prospects for boosting productivity, growth and global competitiveness.

"The advancing parts of the economy have to ask permission from the rear-view mirror parts of the economy to get the inputs they need," Muro says. "That's a problem our competitors don't have."

At the same time, the GOP's small-government ethos constrains its ability to boost the struggling economic constituencies that Republicans represent. In 2016, for example, candidate Trump pledged to revive coal mining communities through deregulation rather than investment.

But coal mining employment has not reversed its long-term decline, and the government projects falling coal consumption this year and next. Owners of unprofitable coal-fired power plants have shuttered them at a record rate in 2018.

Muro has co-authored a forthcoming study on ways to narrow the geographic divide. It advocates a "place-sensitive" strategy targeting economic development toward 10-12 mid-sized "heartland metros," and subsidies to make relocation more affordable for individual workers pursuing greater opportunity.

Success, he concludes, depends on calming economic conflict as well as culture wars.

"The two parties are speaking past each other on economic issues," Muro says. "Can these two economic factions arrive at some kind of armistice that can spur broad American prosperity going forward?"

-Data visualizations by CNBC's John Schoen

(Correction: An earlier version of the charts mislabeled several districts.)

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