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Jeremy Hobson Headshot

The 'Rust Belt' Is the Future

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No one would argue that the two men who might lead this country for the next four years are spending too little time in the so-called Rust Belt. President Obama and Mitt Romney are flying in and out of cities like Cleveland so often, they probably recognize the baggage handlers at the airport.

I just hope they hang around long enough to see what I discovered on a recent trip to Cleveland: The Rust Belt is our future. And not in a bad way.

Think about Ohio. It's a state whose heyday appears to have passed. The steel industry is a fraction of what it was -- and it's not coming back. Manufacturing jobs have disappeared as cheaper labor has popped up in places like India and China.

Think about Michigan. Yes -- the auto industry is still there, but have you driven around Detroit lately? The number of abandoned homes shows you just how much smaller today's "Big Three" automakers are than they used to be.

But here's the thing: none of this is new to the people who live there. They've been adjusting to this reality for years. They've had a sneak peek at America's next challenge. And they're taking it in stride. They know that the old industries are gone and aren't coming back. They know they have got to get creative to survive. And we should learn from them.

In Ohio, they're moving toward efficiency. The largest private employer in Cleveland is the Cleveland Clinic, which prides itself on making things work faster, better and cheaper. Instead of paying people to cart supplies across the sprawling campus, for example, the Clinic uses robots. They're not creating jobs for jobs' sake.

The economies of the Midwest are diversifying. They're not putting all their eggs in one basket. The Rust Belt's future is not going to be built around one industry because the industries of tomorrow aren't going to employ hundreds of thousands of people. And they're not going to pay workers as much.

Just look at the nation's hottest companies: Facebook has a billion users, but it employs just a few thousand people. Apple employs more -- but I don't have to tell you that the bulk of the company's production is outsourced to China. Even Chevron -- with its multi-billion dollar profits --- only has 57,000 people on the payroll. That's about twice the population of Wheeling, West Virginia.

Speaking of Wheeling -- which is smack dab in between Ohio and Pennsylvania -- you should see what's going on there. Big law firms are opening up back offices there -- where the cost of living is cheap -- to save money. You can hire three lawyers in Wheeling for the cost of one in New York City. It's cheaper, and it's more efficient.

And then there's the topic of unions. Collective bargaining helped build a strong middle class in these states, but the union participation rate is now about a third of what it was at its peak. Why? Because union jobs tend to be more expensive for companies than non-union jobs. And the Rust Belt states would rather take a job with fewer benefits than no job at all.

So pay attention to what's going on in Ohio and Michigan and Wisconsin and Pennsylvania. They've been staring into the face of change for years. The rest of us are just getting started. The Rust Belt might not look like the future -- but it is.