by James A. Bacon
Employment growth in Virginia’s Appalachian region since 2002 has been the weakest of all five states in the Central Appalachian region, according to data contained in a recent Appalachian Regional Commission (ARC) report, “Industrial Make-up of the Appalachian Region: Employment and Earnings, 2002-2017.”.
Making matters worse, job growth in Central Appalachia was the worst in all of Appalachia, which was half that of the United States as a whole.
The growth gap between Virginia on the one hand and Tennessee and North Carolina on the other has been particularly marked, the gap between Virginia on the one hand and West Virginia and Kentucky not quite as bad.
Earnings growth in Appalachia also has severely lagged that of the United States as a whole — 17.5% compared to 27.3%. Continue reading
by James A. Bacon
You most likely missed it because it has gotten next to zero publicity, but the Commonwealth does have an economic development strategy for rural Virginia.
In 2017, a group of rural development stakeholders come together to form a “Rural Think Tank” to identify policies the state should pursue to position smaller metros and rural areas for economic growth. After deliberating, the twelve think tank members came up with five strategic priorities, as described in the latest edition of the Virginia Economic Review, a publication of the Virginia Economic Development Partnership (VEDP). This second edition of the quarterly publication is devoted to “America’s Rural Growth Challenge.”
The priorities include:
Ubiquitous broadband access. Topping the list is ubiquitous broadband access, a priority embraced by the Northam administration that receives broad bipartisan support. The ability to plug into the Internet is a necessity not only for business growth but is essential to education, healthcare, social connectivity, and the quality of life. As the Virginia Economic Review quotes Didi Caldwell, past chair of the Site Selection Guild, put it, “Broadband is to the 21st century was electrification was to the 20th. Rural communities need it to thrive and survive.” Continue reading
Tom Barkin, president of the Federal Reserve Bank of Richmond
by James A. Bacon
A couple of days ago I lamented that the purveyors of the “conventional wisdom” at a recent Federal Reserve Bank of Richmond conference on rural development had little new or insightful to offer. I must offer a partial retraction. A friend has forwarded to me a speech by bank President Tom Barkin. While most of the points he made were familiar, some were new to me — and, hey, I figure if they’re new to me, someone who has been tracking rural development issues for some 30 years, they’re probably new to many others.
In that speech, “Moving the Needle in Rural Communities,” Barkin discusses the disappearance of “anchor institutions” in rural communities such as banks, hospitals and colleges. I’ve discussed the closure of rural hospitals on this blog, but always in the context of the rural health care crisis, never the rural economic crisis. I’ve also written about the travails of small, private liberal arts colleges, but, again, only in the context of higher education affordability, never the rural economic crisis. And, frankly, it never occurred to me to write about the disappearance of banks. However, the concept of anchor institutions seems to be a useful one for understanding rural economic health, and their continued erosion is a worrisome trend.
So, here’s what Barkin had to say: Continue reading
Declining geographic mobility. Graph credit: McKinsey Global Institute
by James A. Bacon
A recurring question on this blog and elsewhere is why don’t more Americans (and rural Virginians) move to areas of greater economic opportunity? Why do they remain stuck in communities with high unemployment and low wages? Americans have always moved to economic opportunity in the past. What’s different now?
Those questions give rise to another set of questions. If people refuse to budge, should the rest of society take pity on them and subsidize their choice to stay put? As Don Rippert commented in a previous post, “The best thing the state can do is issue relocation vouchers to rural residents.”
The authors of a McKinsey Global Institute report, “The Future of Work in America,” tackles the geographic-mobility question. The biggest factor, they suggest, is the vast and growing gap in the cost of living between prospering cities and lagging communities. “Variations in the cost of living — and particularly in housing costs — are a clear contributing factor holding back geographic mobility in the United States. The cities offering the greatest job opportunity also happen to be expensive places to live.” Continue reading
Projected job growth by 2030. (Darker colors indicate faster job growth). Source: McKinsey Global Institute. Click for larger image.
by James A. Bacon
A handful of megacities have captured a majority of U.S. job growth since the Great Recession and could win 60% of job growth through 2030, according to a July McKinsey Global Institute report. A middle tier of “stable” metropolitan areas and thriving niche cities will continue to see job growth, though at a more modest rate than the megacities, while the bottom tier of lagging metros and rural areas will see only marginal growth, if any.
The differential rates of job growth will be driven in part of the next wave of automation, which will displace many office-support, food-service, manufacturing, and customer-service jobs, while a dynamic economy creates more jobs in healthcare, STEM fields, business services, and work requiring personal interaction, says the report, “The Future of Work in America: People and Places, Today and Tomorrow.” “While there could be positive net job growth at the national level, new jobs may not appear in the same places. The challenge will be in addressing local mismatches and help workers gain new skills.”
If McKinsey’s “midpoint” job projections are close to the mark, the Washington metropolitan area will continue to dominate job growth in Virginia, while “stable” metros like Richmond and Hampton Roads will contribute to a lesser degree. The Shenandoah Valley and Roanoke-Lynchburg area will see marginal growth, and the rest of the state negative job growth.
These conclusions put a filigree on what everyone already knows about the challenges facing rural Virginia. What, then, is to be done? McKinsey offers some general strategies for adapting to our brave new world that sound remarkably similar to what I had to say in yesterday’s blog post about rural development. And I quote: Continue reading
Shenandoah Valley: Not all rural areas are created equal
by James A. Bacon
Virginia’s rural communities face a hard slog maintaining their local economies in a globalizing world in which their traditional advantages, cheap land and labor, are no longer competitive. That slog looks even harder when leading thinkers are so bereft of fresh ideas. The utter failure to think beyond the conventional wisdom was on full display, as can be gleaned from this report by Virginia Business, at a conference hosted by the Federal Reserve Bank of Richmond about rural economic development in the Fifth District, which includes Virginia, West Virginia, Maryland and the Carolinas,
There’s nothing wrong with the conventional wisdom as far as it goes. Yes, rural areas need to fine tune their workforce training programs. Yes, rural communities need better broadband access. Yes, rural areas need to retain local anchor institutions like hospitals, banks and colleges. Yes, above all, rural communities need to do a better job of retaining their college-educated youth.
“Changing the prospects of a town, it seems to me, starts with aligning the mindsets of the people in that town,” said Richmond Fed President Thomas I. Barkin. “And a great metric is whether the kids who grow up and go to school there choose to come back.”
Yes, yes, yes — but how? Continue reading
by James A. Bacon
It turns out there’s not just a hospital shortage and a physician shortage in rural Virginia — there’s a nursing shortage. A couple of articles over the weekend highlighted growing problems with health care access in rural and small-town western Virginia communities.
Community leaders in Patrick County have given up on bringing back a local hospital from the dead, reports the Associated Press. Efforts to resuscitate the old Pioneer Community Hospital were hampered by complex licensing issues and the high cost of retrofitting the 1960s-era hospital building, which has deteriorated since it closed two years ago and suffers from extensive deferred maintenance issues.
Local officials now are looking for other ways to deliver health care services to the mountainous county where the population is declining and aging, the AP says. In the meantime, still-functioning hospitals are shutting down floors and units due to an inability to staff them with nurses. Continue reading
Off limits to utility-scale solar? Civil War battlefield locations in Virginia.
by James A. Bacon
Culpeper County prohibits construction of solar farms on Civil War battlefields. Now a proposal under consideration by the Board of Supervisors would discourage large solar projects adjacent to battlefield land held in historic easement, reports the Culpeper Star-Exponent. And that restriction is just one of many changes to the county’s Utility Scale Solar Facility Development Policy under review by the board.
Last year the board approved the 1,000-acre Greenwood Solar project over local opposition. Since then resistance to the land-consuming facilities has gotten more organized. One group, Citizens for Responsible Solar, has actively pursued a policy of delay and encumber to restrict development of large-scale solar farms. Last month Cricket Solar pulled a proposal for a 1,600-acre solar farm in the county. Meanwhile, local opposition has stalled progress on utility-scale projects in other counties.
On the state level, it is the policy of the Northam administration, the General Assembly, the environmental community, and Dominion Energy to boost the contribution of solar power to Virginia’s energy mix. People may disagree about how far and how fast to go, but just about everyone agrees on the desirability of having more solar than we have now. But opposition at the local level has emerged as a significant barrier to large-scale deployment of solar. Continue reading
by Peter Galuszka
U.S. Rep. Abigail Spanberger (D-7th) has drawn lots of attention for her Rural Broadband Summit at Louisa County High School in Mineral on Aug. 17, which got plenty of comment from primarily rural residents unhappy that they can’t get access to quick, reliable Internet service.
Good for Spanberger, who beat Republican Dave Brat in last year’s hotly contested election. But this all brings questions: after so many years why are we still facing this?
I am now in my second decade of writing about the lack of broadband access in rural and inner city areas.
A piece I did for Chief Executive magazine about 10 years ago explored how mostly minority business owners in inner Philadelphia couldn’t afford broadband because the big providers, which would include Comcast and Verizon, cherry pick their locations. The firms wanted to boost margins so they pushed “triple play” (Internet, telephone and television) access in wealthier areas. Those not so privileged had to struggle with higher costs and access issues. “I don’t need 400 channels,” an inner city business owner told me. Continue reading
Everyone can agree, I think, that broadband Internet service is an essential utility for Virginia’s rural areas. There appears to be a wide base of support for the commonwealth to expend modest sums of money to help extend broadband to rural Virginians where the population density is insufficient to attract fiber-optic and wireless investment by private telecom companies. But I do have one question: What’s wrong with satellite broadband?
My question is prompted by an op-ed in the Richmond Times-Dispatch today by Evan Feinman and Courtney Dozier, the point persons in Governor Ralph Northam’s bid to expand rural broadband access. They describe programs that use public dollars to grease partnerships between localities, internet service providers, and electric utilities. Since the beginning of the Northam administration, they note, state-funded programs have helped establish 71,000 connections to homes and businesses. And that’s just the beginning of what they have planned. They are asking for tens of millions of dollars more.
That all sounds great. When it comes to rural economic development, investing in broadband may be the most effective way to spend public dollars. Still, what’s wrong with satellite technology? Continue reading
The new Danville — more of this….
In Part II of his extended essay on the revitalization of downtown Danville, Va., The Atlantic magazine writer James Fallows dates the beginning of the city’s revival to the decision to demolish The Downtowner, a classic example of atrocious 60s-era architecture. In retrospect, it now obvious that the “modernist” architecture of the 50s and 6os was so hideous that it is not only not worth preserving, it is a blight. Or, as Fallows put it: “Most people believed that the old buildings had timeless-classic potential, and the Downtowner did not.”
… and less of this.
When the city took the wrecking ball to the Downtowner in 2012, only 400 or so people worked or lived in the downtown tobacco warehouse district now known as the River District. After several years the renovation and retrofit of old industrial buildings, the number now stands at 6,000.
Classic architecture (even if it is industrial architecture) + a traditional downtown street grid + views of the Dan River have proved to be a winning combination. Who ever would have thought that Danville would reinvent itself as a center of walkable urbanism? But it has, and therein lies its hope for sustainable economic growth. Continue reading
I have been critical of the Virginia higher-ed establishment’s goal of making Virginia the best-educated state in the country. The goal is arbitrary and unconnected to the demand for higher-ed degrees. Pursuing the goal could result in over-investment in higher-education at great cost to students who wind up indebted and under-employed, and at the expense of lower-income Virginians and minorities who can’t keep up with the never-ending degree inflation.
However, the State Council of Higher Education in Virginia does deserve credit for defining “best educated” as including not just four-year and advanced degrees but educational certifications, which recognize mastery of narrow skill sets in demand in the labor market. And SCHEV aims to boost programs, mostly in community colleges, that provide “certifications.
Now comes the Demographics Research Group at the University of Virginia with data showing the distribution of degrees and certifications granted in major regions across the state (measured by credentials granted per 100,000 population in the 2016-17 school year). Due to technical difficulties, I will replicate that relevant chart in a separate post. Writes Spencer Shanholz on the StatChat blog: Continue reading
Seeding entrepreneurship. The Virginia Coalfield Economic Development Authority has approved $180,000 in seed-capital grants up to $10,000 for businesses that have been operating less than a year and have fewer than 10 full-time employees. The new businesses are projected to create $770,000 in total private investment and create 135 full-time and part-time jobs. Assuming the businesses deliver on their investment and jobs — not to be taken for granted — this looks like a promising approach to economic development. Since it started two years ago, reports the Bristol Herald-Courier, 53 businesses receiving micro-grants have generated $3.1 million in private investment and created 542 full- and -part-time jobs. Beats subsidizing an out-of-state company to build a light manufacturing plant and then shut it down 10 years later.
Addressing the doc shortage. Southwest Virginia has a chronic shortage of doctors, nurses and other health care providers. The United Company Foundation in Bristol is issuing a $1 million challenge grant to the Edward Via College of Osteopathic Medicine in Blacksburg to lower medical school debt for doctors who agree to practice in Southwest Virginia, reports the Roanoke Times. Two $40,000 scholarships will be awarded this spring to third-year medical students. After they complete their residencies, they will be required to work for three years in the region.
To plug the broadband gaps, first you have to find the broadband gaps. Continue reading
I remain skeptical that Virginia’s mill towns should peg their hopes for economic revival on manufacturing (see “Virginia Manufacturing Jobs Still in Decline“). But Stephen Moret, CEO of the Virginia Economic Development Partnership, makes a powerful case that Virginia can improve its track record in luring manufacturing investment.
In a lengthy comment to my post, Moret lays out his strategy, key tenets of which include building a national-class custom workforce training program, investing in site preparedness (building industrial parks on speculation), marketing more aggressively outside the state, and being more creative (and competitive with other states) on incentives.
Among the interesting tidbits of news in his comment is the fact that VEDP has has just recruited one of the top experts in the country to run the custom workforce training program, Mike Grundmann, from Georgia. He will start work next month, says Moret. “We expect to have this program up and running by late this calendar year.” Continue reading
Conservation easements don’t just block projects like pipelines, highways and electric transmission lines. As demonstrated in Powhatan County Monday, they can block solar farms as well.
Faced with skepticism from the Powhatan County Board of Supervisors, Cartersville Solar LLC has withdrawn a proposal to build a solar farm on a 3,000-acre tract of property, reports the Richmond Times-Dispatch.
The proposal had encountered opposition from Powhatan residents. Citizens commenting at public hearings cited negative ecological impact on protected wetlands — the only remaining wildlife corridor connecting the James and Appomattox rivers — and on rare and endangered species.
Cartersville Solar had acquired 2,998 acres near the intersection of Cartersville and Duke roads for the purpose of building a solar farm. (The RTD article does not say how much power it would generate.) In November, the Powhatan County Planning Commission voted to recommend denial of the project on the grounds that the proposed use is not consistent with the 2010 Long-Range Comprehensive Plan. Part of the project would fall into an area designed Priority Conservation Area and Protected Land. Continue reading