Tag Archives: Rural development

Downtown Abingdon, one of Virginia’s great walkable places.

The Roanoke Times tells a hard truth to the readers of Southwest Virginia: “Nobody cares about you.”

Democratic Governor Terry McAuliffe, says the Sunday editorial, has done nothing to help the counties of the far Southwest whose finances were devastated by the collapse of the coal industry. The Democratic Party in Virginia has “evolved into almost strictly a suburban-urban party that has no natural interest in anything west of the Blue Ridge.”

And the Republicans? After promising to help the coal industry, President Trump has proposed slashing funding for energy research and zeroing out a program that pays to convert old mines into industrial sites. Concludes the editorial:

What’s the takeaway from all this? We’re on our own. We cannot count on either Richmond or Washington to help us. Maybe from time to time one of them will come through with some unexpected grant to help with some piece of infrastructure and we should be grateful. On a day-to-day basis, though, it’s clear that both the state and federal governments have come to a bipartisan consensus: Southwest Virginia doesn’t matter to them.

What is the down-on-its-luck region supposed to do? Businesses need to get more engaged, says the Times. Local government needs to focus more on economic development. Voters need to be more demanding.

The Times is right. Other regions are indifferent to the fate of Southwest Virginia. They have their own problems and their own funding issues. Other regions insist that they’re getting a raw deal from the state. (Talk to a Northern Virginian some time. NoVa may be rich, but its citizens feel short-changed and aggrieved.) And every region pursues its own self interest. The bigger piggies muscle closer to the trough, leaving the weaker piggies behind. It’s Darwinism in a political setting.

Southwest Virginians would be well advised not to pin their hopes on the largess of others. What, then, can they do?

They could start by acknowledging some harsh realities. First, coal is never coming back. Natural gas, wind power and solar power are far cleaner and far cheaper. Economics will dictate than any new electric-generating capacity in the United States over the next decade will be either gas or renewable. Existing coal plants will serve out their economically useful lives, and then they will be phased out.

Second, manufacturing might rebound, but it will never provide the large-scale employment it did a generation ago. Some manufacturing operations may repatriate from overseas back to the U.S., and corporations will continue to invest in plant expansions. But robotics, artificial intelligence and other forms of automation mean that manufacturing processes will create require fewer and fewer jobs as time goes on. The return on investment on traditional economic development strategies — recruiting manufacturing investment — will continue to decline.

Third, the agglomeration economies of the Knowledge Economy will continue to favor metropolitan areas with large, diverse pools of skilled, educated labor over small, semi-skilled labor pools of rural communities. The Roanoke-Blacksburg area, with its access to Virginia Tech, its faculty, graduates and entrepreneurial spin-offs, conceivably can achieve economic escape velocity. But no other city or town in the region has that potential. Meanwhile, young people who succeed in obtaining a college education will continue to emigrate from the region — just like they’re doing in every other rural community across the country.

Making the challenge even more difficult, Southwest Virginia lacks an advantage possessed by other rural areas in Virginia such as the Shenandoah Valley, the northern Piedmont, and the Chesapeake Bay tidewater — proximity to large, affluent metropolitan areas. A location within easy driving distance of big metros will support an economy of resorts, vacation homes, retiree communities and weekend-getaway amenities for city dwellers.

What options does that leave Southwest Virginia? Not many. But the region is not destitute of assets. The Virginia Tobacco Region Revitalization Commission still has millions of dollars to dispense. The region just has to take care not to squander its limited resources on chimera like new Interstate highways, inter-city rail service, manufacturing subsidies, our outright follies such as government-supported golf courses, convention centers and other long-shot efforts to stimulate development.

I’ve written before about the Aspen model of economic development, built on active outdoor recreation — not just skiing but hiking, rafting, rock-climbing, mountain biking, kayaking, fishing, all-terrain riding, and so on — as well as a fabulous, walkable downtown. The walkable downtown is a critical element of Aspen’s success, and there is no reason that Virginia can’t replicate the formula in many of its small towns.

Call it the Abingdon model instead of the Aspen model. The town of Abingdon in Washington County is one of the most charming places in Virginia, and it is set in an area of great natural beauty. It has become destination that people are willing to travel hours to visit. Abingdon is proof that the strategy can work.

Wise County is another innovative community, exploiting its investment in broadband to recruit data centers. Data centers don’t support many jobs, but they do pay taxes that broaden the tax base. The county also is exploring opportunities to supply green energy to the data centers. Regional authorities should map the electric transmission grid, enact solar-friendly zoning ordinances and comprehensive plans, and encourage solar developers to consolidate properties capable of hosting utility-scale solar farms.

America is a big place, and while most rural areas (outside the fracking hotspots) are hurting. But some communities are faring better than others. Some are doing innovative things. Southwest Virginia can learn from the example of others. Perhaps it’s not a bad thing that no one else cares about the region. In the long run, dependence and handouts accomplish less than resilience and self reliance.

Dilapidated buildings along Main Street in Pamplin City, Prince Edward County. Photo credit: OnlyInYourState.com.

Virginia’s rural communities suffer from huge disadvantages when competing for job-creating corporate investment. Low density makes it expensive to install high-bandwidth Internet service. The small size of rural communities makes it difficult to support the amenities that skilled, educated workers are looking for. And, most important, corporations prefer locating in metropolitan areas with “deep” labor markets where they can tap employees with specialized skills.

Perhaps we can add one more disadvantage to the list: a national economy increasingly dominated by monopolies and cartels. So suggests Lillian Salerno, a former Texan who served as deputy under secretary for rural development in the Obama administration.

“For decades,” she writes in a Washington Post op-ed, rural America has been punished by bad policy that places too much power in the hands of distant financiers and middlemen through the formation of monopolies, which undermines small, local businesses and drains communities of resources.”

New business formation has plunged since the Great Recession, and nowhere more dramatically than in counties with fewer than 100,000 people. Why? Because, Salerno says, the federal government stopped enforcing monopoly laws.

This slow-rolling wave of corporate mergers has left almost all major markets — airlines, telecommunications, health care, retail, milk, seeds for growing crops, hardware, even cowboy boots — dominated by a cluster of mega-corporations, cloaked behind a plethora of brand names. These behemoths now hold unprecedented power over thousands of once-thriving community economies.

Corporate concentration has hit farmers, ranchers and agricultural workers especially hard, she writes. Many markets are monopolized by a single company that dictates the terms of business to suppliers. The seed industry has dwindled from 600 independent companies two decades ago to six today. Similar levels of concentration exist in the pork, chicken and dairy industries.

I don’t know if Salerno is right or not — I would like to see more specifics — but her argument is worth close examination. If her theory holds up, it is discouraging indeed for rural economies, for a decades-long drift toward a cartel-dominated economy is not easily reversed. If it’s any consolation, monopolies are not good for most metropolitan economies either.