The great plague shattered the former social, political, and economic order, worldwide. The mass deaths of a quarter of humanity, and the ensuing chaos, disrupted all industries, and brought economic activity to a halt. Post-plague violence — riots, banditry, and outright warfare — killed anywhere from a third to half of the population. Then there was the Emergence, a whole ‘nother series of problems in and of itself.
No nation emerged unscathed, and most have ceased to exist at all. China broke apart into six separate countries, India into nearly a dozen, and the Green Eruption has killed off all civilization in Europe outside of a score of heavily armed city-states, most under the thumb of their own patron dragon. The US likewise suffered.
The United States — comprising an estimated 110 million people — is split roughly 50/50 between the Outlaw and the Fed. The Outlaw is the frontier, largely a place of anarchy and violence, with scattered pockets of civilization.
Most Outlaw polities are city-states, typically small settlements that stand on their own. (The three main exceptions being Alaska, Texas, and Utah.) Governments range from democratically elected town councils (of greater or lesser effectiveness), to absolute dictatorships (benign or cruel), to near-anarchy.
Life in the Outlaw is dangerous. You can literally be eaten alive by ghouls, robbed or murdered by bezerkergangs, or fall victim to any number of other horrors. When faced with these threats, citizens and local governments are on their own. (Hence the thriving market for Guns.)
Life in the Fed is safer, so long as you live in the Enclaves. You have police protection, functional infrastructure, and municipal necessaries. In consideration of this, you pay your annual residency fee for you and your family. (The replacement for the annual income tax.)
But your life is not your own. Your physical security requires residency, and that can be revoked at any time, by a corrupt policemen, an officious or offended bureaucrat, or your employer. Revocation of residency means exile, and people fear exile, for good reason.
Exile means being stripped of your job, your nice house, your secure neighborhood. It means you and your family being ejected from the core, to live without police protection or municipal services. Exile means life in the jungle.