Tag Archives: Rural development

Source: “Rural Population Loss and Strategies for Recovery,” Federal Reserve Bank of Richmond

In a recent article, the Federal Reserve Bank of Richmond highlighted strategies for bolstering the population of rural counties in the Fifth Federal Reserve District. Some ideas will prove familiar to readers of Bacon’s Rebellion, such as identifying amenities that will attract retirees and second-home buyers. But the article makes some suggestions we haven’t heard before.

Population growth, or at least population stability, is critical for the economic health of Virginia’s rural counties. A shrinking workforce makes it more difficult to attract outside employers, a shriveling population makes it harder to support health services and retail amenities, and a declining tax base undermines the ability to pay for government functions. Population stagnation and/or decline is a problem across the five states of the 5th district, and Virginia is no exception. (Virginia’s rural counties actually saw a small net in-migration, but that was more than offset by “natural” decrease of deaths exceeding births.)

To my mind, the most fascinating strategy is focusing on people’s personal ties to family, friends and communities. One study used 300 interviews in 21 towns at rural high school reunions to learn why some attended decided to return to the rural community where they grew up. Continue reading →

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 →

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 →