Large Metros Rule, But There Is Hope for Almost Everyone

The employment-growth gap between metropolitan areas and non-metro areas in the United States is displayed dramatically in this chart compiled by the Brookings Institution and published in the New York Times. The disparity in growth rates between metro and non-metro is old news. What I find intriguing — and even encouraging — is that the difference between large, medium and small metros is relatively small.

The chasm in economic growth between large metros and isolated rural areas is explainable largely by the so-called agglomeration effect — the huge advantage bequeathed by large labor markets with a wide range and great depth of technical, managerial and executive skills. This effect is so powerful that it overpowers big-metro drawbacks such as traffic congestion and high housing costs.

However, size is not destiny. Midsized metros like Richmond and Hampton Roads can prosper, and so can smaller metros such as Roanoke, Charlottesville, Lynchburg, and Winchester. While non-metro America is lagging overall, micropolitan areas outperform isolated rural areas. Small towns aren’t creating a large number of jobs, but they are at least holding their own.

Of course, there is considerable variability in each of these categories. Not all big metros are prospering equally. Not all isolated rural areas are falling behind.  From an analytical perspective, it would be helpful to know which factors account for that variability. How much do state taxes matter? How important is the presence of a major research university? How does the rise and fall of agricultural and energy commodity prices drive rural booms and busts? What role do lifestyle amenities play? What about land use patterns and access to transportation assets such as ports, airports and interstate highways? If we knew, we could better invest finite public resources where they will yield the greatest benefit.

Hat tip: Stephen Moret

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6 responses to “Large Metros Rule, But There Is Hope for Almost Everyone

  1. “Not all isolated rural areas falling behind.”

    Any examples?

    • Check out the communities in the Bakken shale formation in North Dakota and the Permean Basin oilfields in Texas.

      • Don says:” “Not all isolated rural areas falling behind.”

        Jim says:”Check out the communities in the Bakken shale formation in North Dakota and the Permean Basin oilfields in Texas.”

        Yes, but, in substantial measure, these concerns do not apply to much of Virginia.

        The key is creating or reviving small or mid-sized communities for the viable long term, ones that are internally self sufficient communities that interact and leverage efficiently off the outside world, unlike flash in pan mining towns. Hence, we need to build towns that are self sustaining and internally synergistic long term, whether they be new towns or revived.

        These are towns that breed economic and SOCIAL benefits of all sorts, unlike mining communities. Towns where people find long term jobs, get married, raise and educate strong and capable kids that can far more easily stick around and thrive. In Virginia, this will apply mostly to reviving, re-energizing, and re configuring long established towns, reinforcing their social infrastructure, like schools and churches, and their walk-able main and side streets, into alive urban social places and spaces.

        Virginia can do this.

        It already has in places like Winchester that now should thrive even more. And Virginia is full of such attractive physical places, well located geographically, by reason of roads, airports, and/or other physical assets and resources – beaches, mountains, historical assets urban and rural, bays, creeks, streams, rich farm lands, etc.

        So for example, there is good reason to be very bullish on the revitalization of Virginia’s Inland Empire, the Shenandoah Valley from top to bottom, so long as the land use, base infrastructure, and work force assets are put in place to jump-start what should be sure demand once Amazon and its ilk are up and running, and well along their natural growth curve in Virginia.

        And, once this gets going, there need be, and likely already is in the works, a comprehensive plan to harness that growth throughout the state. Hence, too, expect Virginia’s Chesapeake bay shore communities, including those on Potomac, and Rappahannock to blossom yet again. Expect too, Virginia’s Eastern shore (given it unique gifts) to find sudden demand. It is all waiting to happen now, with good leadership in state gov. and locally.

        With Micron and Amazon in place, this will happen with good planning and execution that takes full advantage to all available opportunities, spawned by what is now beginning to happen in Norther Virginia.

        “Not all isolated rural areas falling behind.”

        • Reed. I totally agree with your analysis here. Just to be clear, I did not point to Bakken shale and the Perman Basin as examples that could be replicated in Virginia, only to make the point that not all remote rural areas are in demographic decline. To be sure, at some point the natural resource will be extracted and the economic underpinning of those regions will disappear — just as it did for Virginia City, Nevada, when the Comstock lode was mined out, and just as is happening in Central Appalachia as the coal seams are being mined out.

          Rural communities have to find a sustainable economic model. Any sustainable model likely in Virginia will support a much smaller population than light manufacturing, tobacco farming, and coal mining. As you allude to, sustainable economic models likely will be built around retirement, tourism, and recreation.

          • So your examples are of isolated rural areas which find themselves on top of natural resources which can now be profitably exploited (i.e. fracking from shale). Ok, fine. You also note that rural communities need to find a sustainable path to economic growth. Let me ask the question differently – are there isolated rural communities that are doing well economically in a sustainable manner.

            I spent time last over the past two weeks in Nelson County, Va. I was trout fishing on the Tye River. Beautiful area but my two friends and I were among the very few trout fishermen on the water. Given that the streams are stocked and we were enjoying good action – it was a little surprising there weren’t more fishermen out. However, the real stunner was the number of excellent brew pubs and distilleries functioning in Nelson County. With a population density of 31 per sq mi (or … a bit over 20 acres per person) it was obvious that these pubs, restaurants and distilleries catered to people from outside Nelson County. Given that I’ve fished the DMV for over 50 years it was surprising that Nelson County had such great water and I’ve never heard of that before. Seems like they might want to invest some time getting the word out.

  2. There’s one more problem with big Metros and that is exurban commuting.

    The stretch between DC and Fredericksburg is considered one of the worst in the nation even with HOT lane tolls.

    New York City is instituting cordon tolls to discourage solo commuting and encourage the use of transit.

    Whether it’s Houston, Atlanta, LA , Seattle or Chicago – it’s a big issue.

    And there are two distinct and separate “affordability” issues. One if for basic housing for service workers and the other is upper scale single family homes and neighborhood schools for higher skilled workers and professionals. You can get twice or three times the house by commuting.

    HOWEVER – it’s the REASON why both employers and workers gravitate there. they can locate anywhere in a beltway circle around the urban core and meet their needs.

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