Immigration causes populist uprising and racial polarization.

Immigration also has changed the employment landscape, increasing the supply of both skilled and unskilled labor and helping to reduce the costs of production. But these are secondary forces compared to automation. But empirical reality need not drive political perceptions and decisions (e.g., Sharot, Korn and Dolan, 2011; Bolsen, Druckman and Lomax Cook, 2014). What matters is that large numbers of working class people think foreign competition and offshoring of production are costing them jobs. One of the challenges of right-wing populism is that its anti-elitism extends to “experts” and academics, making it harder to educate people and get them to change their beliefs about the relationship between globalization and jobs and wages. Another sector which has experienced tremendous changes in labor and wages is the energy sector where there have been winners and losers. The winners have been primarily in natural gas and oil production (primarily in areas of the country using fracking to release small deposits of natural gas and oil such as North Dakota, Montana, Oklahoma, and Texas). Coal production has declined greatly, particularly in the Eastern half of the United States which has vast reserves of high sulfur-content, bituminous coal. Production of bituminous coal has decreased for two reasons. One, the increased production of cheaper natural gas has put the coal industry at a competitive price disadvantage in the production of electricity. Two, environmental regulations, implemented to reduce greenhouse gasses, have raised the costs and reduced the market for bituminous coal. The impact has been dramatic and rapid. An estimated 191,000 coal mining jobs were lost between 2014 and mid-2016, primarily in the Appalachian Mountain region crossing Kentucky, Tennessee, Pennsylvania, and West Virginia. The coal mining industry has lost 45% of the jobs that existed in 1981. These job losses are geographically concentrated, devastating entire communities where coal mining was the sole economic engine. The lack of a diversified economy is particularly important because the end of an industry means economic decline in these areas without realistic opportunities to find another job. Economic discontent is not limited to these economic sectors. Another major economic transformation has occurred in the structure of labor compensation that has reduced wages for millions of employees in white collar occupations. Corporations have moved from hourly wages with overtime compensation in the 1970s and 1980s, to salaries without overtime compensation in the 1990s, and over the last fifteen years to more “1099” contract employment which typically lack long term salary assurances or health and retirement benefits.13 Katz and Krueger (2016) estimate that by late 2015, 15% of the US workforce was working in these alternative work arrangements that do not provide benefits. Overall, fewer Americans are finding economic security even when they are employed, and more of those who are employed are experiencing stagnating or declining wages and benefits. Thus economic decline extends beyond rural America, Appalachia, and small towns and cities that have lost the factories that were the economic engine of the community. While employment and wages have stagnated for millions of people, most of the gains from growing productivity have gone to corporate management and ownership in the form of increasing compensation, dividends, and stock valuation. Not everyone has lost out in the new economy. Employment and wage growth have occurred in the economic sectors of technology, finance, and other services that leverage knowledge and technology. Employment in these sectors typically require a college degree. Since the 1970s, there has been a growing income gap between workers with a high school education or less and those gaining a college degree. That has cultural and social ramifications that transcend the economic impacts of these transformations. Lower education, working class people are losing jobs, their communities, and their “way of life.” Further, there is a geographic distribution of economic losers and economic winners may well be feeding the large urban – rural divide. Small cities and the small towns of rural areas have been hit hardest by the declines in agriculture, manufacturing, and mining. While urban areas have lost a larger absolute number of manufacturing jobs, most large urban areas have more diversified economies so that employment losses in one sector can be offset by gains in other areas. Workers losing jobs in urban area like Chicago can participate in worker retraining and education programs with a reasonable expectation of finding a job within or near their community. Education and job retraining programs do not help coal miners in Appalachia, factory workers in Beloit, Wisconsin, or the farmer whose small family farm operation is no longer economically viable in capital intensive agricultural production. Companies in the technology, finance, and other knowledge industries generally are not locating their offices the 15 areas that are losing jobs. They are locating in large urban areas, primarily on the East and West Coasts and in a few cities in between. People losing jobs in rural areas and small cities have to relocate to obtain employment. While older populations often remain, younger generations tend to move in search of jobs—resulting in older and impoverished population living in rural areas and small cities that have lost their primary economic engine. As such, the losses are devastating not only to workers in these areas, but to their entire communities. Interestingly, it is the community that may be more consequential unit of analysis for measuring economic discontent compared to individual pocketbook voting. Rothwell and Rosell (2016) find that it is selfemployed people who are relatively better off than others in their community who were drawn to Trump during first half of 2016. The economic condition of the local community is a significant predictor of Trump’s support in the daily Gallup tracking polls. These socioeconomic and geographic changes in American society have coincided with considerable demographic changes that have political effects (e.g., Cohn and Caumont, 2016; Holbrook, 2016). These changes matter because demographic change and immigration has been shown to produce a substantial cultural backlash even in Northern European countries that have progressive political traditions (Inglehart and Norris, 2016). Clearly, most of the attention has been given to immigration, particularly of Hispanics and Middle Eastern Muslims who are more visible by skin tone, language, and cultural differences. Hispanic immigration increased substantially since 1991 before leveling off during the Obama years, but the geographic footprint of the Hispanic population expanded to almost all parts of the United States including rural America.14 It does not seem to matter for many that Mexican unauthorized immigration has declined since 2009 according to the PEW Research Center.15 Interestingly, people who live in communities with a growing Hispanic population were not more supportive of Trump; rather it is people who live in homogenous white communities that were more supportive of Trump (Rothwell, 2016). Polling has shown that racial antagonism has been rising in battle ground states since the election of Barack Obama (Belcher, 2016; Iyengar and Westwood, 2015). The reaction, particularly among whites in battle ground states, combined with growing diversity of the population has produced a considerable increase in racial antagonism and cultural backlash. This racial antagonism is reflected in the growth of hate groups, which has been rising steadily from 1999 to 2012 before declining somewhat (see Figure 5). According to the Southern Poverty Law Center (SPLC), anti-middle Eastern/Muslim sentiment accounts for a large part of the rise of hate groups after 9/11. This aggregate trend masks some differences, with a recent decline in the number of white supremacy and Neo-Nazi groups but an increase in the number of KKK (from 72 to 190) and Neo-Confederate groups. The SPLC attributes the growth of KKK and NeoConfederate groups to the pro-Confederate battle flag rallies that took place after South Carolina took down the battle flag from its Capitol grounds following the June massacre of nine black churchgoers by a white supremacist flag enthusiast in Charleston. Racial antagonisms go both ways, as there has been an increase of black separatist groups from 113 in 2014 to 180 in 2015, growing in response to the killing of unarmed black men by police officers (Southern Poverty Law Center, 2016). The antipathy among large numbers of white voters toward diversity and cultural inclusivity has grown over the past two decades in response to the diversifying population, the presidency of Barack Obama, and events that have heightened racial tensions. The result is a more racially polarized electorate than in many years, if ever. Iyengar and Westwood (2015) find that the psychological effects of partisanship are as great as that of race in dividing American society. In addition to increased Hispanic, Middle Eastern Muslim, and Asian populations, a couple of other demographic changes are relevant to understanding the rise of right-wing populism in the US. Another fundamental change that has been occurring throughout the country owes to internal migration. Thomas Holbrook (2016) has identified internal migration as a factor that is impacting partisan patterns across states. Rural Southern states, upper-midwest states, and high-plains states have witnessed a net migration out of these states as people move in search of jobs or upon graduating college. Sunbelt states, West Coast states, Nevada, Southeastern states have all witnessed substantial increases in migration from other states. These migrations have potential to change the complexion of political parties in states—potentially moderating politics. However, there is a great deal of adaptation and assimilation that occurs as people acclimate to the culture and politics of their new home. However, one aspect is particularly important. The states that have experienced net declines in population have moved 18 toward the Republican Party, while those gaining population have been moving more toward the Democratic Party. Migratory patterns across states largely reflects economic opportunities, and the states that are losing population are, as a result, older, less-educated, more white, and more traditional in their cultural values. These demographic changes likely contributed to the rise of populist sentiment in these states. These trends have been abetted by the political world by both political parties. On the Republican side, the Reagan era transformation of the Republican Party’s fiscal policy from neoliberalism to supply-side economics has played a role, though secondary to economic trends, in the growing economic inequities in America. The dominant economic theory of the Republican Party is no longer neo-liberal economics, but rather it has become the Republican variation of supply-side economics, which has at its theoretical core, the reduction of the costs of production (supply) to lessen prices and thus increase both production and consumption. It has been successful in reducing real prices in a great number of areas including technology, transportation, food, textiles, and other consumer goods. The pillars of supply-side economics overlap with neoliberal economics in several areas: low inflation monetary policy (which benefits investors), free trade, deregulation of production and finance, low taxes, and anti-union policies to give producers greater flexibility in labor. The US government has played roles in supporting these transformations—pursuing free trade agreements; deregulating financial, transportation, and manufacturing processes (prior to Obama, see below); and reducing taxes on high income earners and lowering taxes on wealth (by cutting the top rates of a progressive income tax structure, capital gains, and estate taxes) (Steger 2016a). While cutting taxes that impacted the wealthiest segments of the population, the Federal government sought to cover the growing costs of the main social safety net in the United States (i.e, Social Security and Medicare) by a 19 dramatic increase in payroll taxes in 1983. The result of these tax policies were to: 1) make federal revenues less dependent on income and investment taxes and more dependent on payroll (labor taxes), and 2) shift the burden of federal spending from the rich to the middle class which saw tax bills grown considerably (mainly because of the increase from 4% to 7.65 percent; doubled for individuals paying the Federal Self-Employment tax). At the same time, there has been concerted efforts to reduce welfare safety-nets, raising retirement ages (1983), restricting various welfare programs (1996), and efforts to narrow the eligibility for food stamps and other direct payments (early 2000s). At the presidential level since 1932, both political parties have nominated candidates who have been defenders if not promoters of free trade. Free-trade thus is a source of resentment against some of the elites in both political parties. Donald Trump is the first presidential candidate since 1928 to be nominated and elected on anti-free trade pledges (his various rhetorical promises probably do not rise to the level of concreteness to be called a policy platform). That gave Trump a great deal of cross-over appeal to working class voters who increasingly have identified as Republicans and those remaining as Democratic-leaners. A final note on context must include reference to the Obama Administration’s use of regulatory policy to attain a variety of policy goals, particularly in regard to the environment and the financial industries. Growing federal regulations have been a driver of antipathy toward the federal government, particularly among Republicans. The Obama Administration vigorously pursued administrative regulation of the environmental impacts of agriculture, manufacturing, transportation, and energy production. Environmental regulations, in particular, are politically problematic because they have an imbalanced distribution of costs and benefits. The benefits of a cleaner environment and a reduction in the pace of global warming are diffuse, benefitting hundreds of millions of people, while the costs are borne almost entirely by those in the 20 regulated industries--coal mining most notably, but also agriculture, energy, and manufacturing production in older facilities that do not meet new environmental standards. Federal regulations of environment, finance, labor, transportation, and trade have raised costs of production and greatly increased costs of compliance in companies. The trend toward greater regulation preceded Obama, but increased during his administration as legislative options for attaining policy goals were choked off by Republican gains in Congress (See Figure 6). Given that Obama implemented numerous regulations through administrative strategies without the approval of Congress, Obama became the focus of intense anger among farmers, miners, small business owners, real estate, and the financial industry. More generally, 21 The degree of dissatisfaction with federal regulations, however, has a very strong partisan bias. Anti-regulatory attitudes are very strong among self-identified Republicans and Republican-leaners (see Figure 8). Republican opposition to federal regulations of business and industry have increased from 47% in 2007 (last year pre-recession) to 76% in 2014. Democrats, by contrast, have shown greater support for federal regulations. As with perceptions of economic conditions, these trends appear to be driven at least in part by partisan control of government. Republicans, when they are out of power, use criticisms of federal regulatory policy as a political weapon against Democrats and against Obama in particular. Thus, Republicans are more upset about federal regulations during the Obama years than they were during the Bush years; while Democrats have become more acceptant. Republicans have vigorously criticized the expansion of federal regulations during the Obama years, while being more subdued in their criticisms during the Bush years despite growing regulation during that Administration. The expansion of federal regulation has not been popular among the general public (see Figure 7). As with race, the degree of extreme anti-government antagonism is reflected in the growth of extremist groups like militias, anti-government groups, and others under the label of “Patriot Groups.” These groups expanded considerably since 9/11 and the resulting growth of federal government police authority under the Patriot Act, government surveillance, and the extensive increase in federal regulations. But more than a reaction to actual events, the patterns of growth among extremist patriot groups is highly linked to partisan control of government (see Figure 9). The number of extremist, right wing patriot groups has been much higher when Democrats have controlled the White House and Congress, and has declined considerably when Republicans controlled Congress and especially the White House. The SPLC, which is considered to be an authority on the number, memberships and activities of hate groups, estimates that these figures under-estimate the size of the radical right because the rise of digital media sites that are mainstreaming extremist anti-racial and anti-government sentiment. In sum, the matter of increasing economic inequality over the past 40 years is not just about economic class, it also has social, cultural, geographic, and cultural dimensions that matter. The economic patterns of the declining of agriculture, manufacturing, and mining and coinciding rise of technology, finance, and knowledge services have produced different winners and losers. The winners are disproportionately college-educated individuals located in urban areas that are culturally and economically more diverse, especially urban areas more closely connected to the global management of manufacturing, energy, finance, transportation and technology. The losers have been less educated individuals living in rural areas, small cities with non-diversified economies that depend(ed) on manufacturing, and the Appalachian region. Rural and small city working class people (of all races and ethnicities) associated with the “blue collar” and farming communities have experienced the greatest economic decline. These areas tend to be 24 predominantly white, which will be a matter we will revisit below. The sense of decline and despair, however, is not just economic but also has overlapping cultural, educational, and racial/ethnic dimensions that cannot be ignored. Further, changing demographics with increased immigration of Hispanics and Asians since 1990, along with the backlash to President Obama and recent, polarizing violence between blacks and police or other white supremacists, have contributed to a broader backlash among white Americans. This can be found in polling data on racial antagonism (Belcher 2016) as well as the growth of extremist white identity and black separatist groups (Southern Poverty Law Center, 2016). Rather than ushering in a new era of post-racial politics, the election of Barack Obama in conjunction with an increasingly diverse population, has increased racial polarization and antagonism.