Hard as it is to generate jobs in cities, it's even tougher in rural areas. An aging workforce and less easy access to markets and suppliers are among the barriers to expanding employment in rural counties. Even so, economic-development experts say some strategies show promise.
In North Carolina, for example, “metro areas are doing well income-wise, but the other 90 counties aren't,” says Jason Jolley, senior research director of the Carolina Center for Competitive Economies at the University of North Carolina, Chapel Hill. North Carolina's core economy has shifted from tobacco, textiles and furniture to high-tech industries such as pharmaceuticals, but many jobs in new industries have gone to people moving into the state, Jolley says, while native rural residents lack access to similar opportunities.
In economists' perfect world, people would simply move where jobs are. “But people aren't as mobile as economic theory would argue” — especially since the housing crash left many with houses they can't sell, says Robert Greenbaum, professor of public policy at Ohio State University. That makes finding ways to develop rural jobs crucial, he and others say.
Rural areas lose young, educated workers at a high rate, another factor making those areas less attractive to employers, wrote Jonathan Q. Morgan, associate professor of public administration at the University of North Carolina (UNC), Chapel Hill, and colleagues. Nationwide, the median age in rural counties was 40.1 years in 2007, compared to 36.1 in metropolitan areas. Moreover, 16.3 percent of rural residents were 65 or older, compared to 11.9 percent in metro areas.
Like most states that provide incentives to businesses, North Carolina gives larger ones to companies that put jobs in high-need areas, says Morgan. But if fundamentals such as adequate sewers and transportation infrastructure are lacking — often the case in rural areas — most businesses aren't interested, he says. “Before incentives can matter, fundamentals have to be strong.”
“For the longest time, rural areas did what everybody else did — try to recruit big industry,” says Morgan. “Some had success, but even they are realizing that they need a more diversified base so they are not dependent on one big company that might move offshore.”
Options exist, though none is close to foolproof, and different areas need different approaches, economists say.
Localities shouldn't necessarily disdain retail and service jobs, despite their low wages and a prevailing view that only exporting industries can sustain an economy, says Katherine Chalmers, an assistant professor of economics at California State University, Sacramento. “With computer manufacturing, for example, you worry that it'll be outsourced, but it's hard to outsource your hairdresser.”
In West Texas, where Chalmers grew up, retailing essentially is an export industry for towns where it's clustered, “because people drive long distances to shop there,” she says.
Policymakers waste effort using strategies suited only for urban areas in rural places, says Thomas G. Johnson, a professor of development economics at the University of Missouri's Harry S Truman School of Public Affairs in Columbia. “Urban areas exist because there is value in clustering; rural areas exist because there's a value in space,” he says.
For rural jobs, “you should look at sparsity-based businesses” such as forestry and tourism as well as manufacturing that doesn't depend on having complementary industries nearby.
In North Carolina, some coastal and mountain towns are trying to start clusters of heritage-based enterprises by helping artisans such as potters and woodworkers strengthen their businesses and enticing more artisans to the area. Morgan says those efforts often begin with “revitalizing Main Streets,” which “are the heart and soul of towns,” then using “quality of life to attract entrepreneurs who are located elsewhere,” as well as tourists and, possibly, retirees looking for an interesting place to settle.
How well this approach works “is not fully documented,” but there is evidence that it has encouraged some communities to pull together with a “can-do attitude” to try to revitalize themselves, says Morgan. “At issue is whether such approaches “can make a dent, when you realize how many jobs aren't coming back.”
Nevertheless, “there's a lot of literature showing that small businesses are job creators if they can stay alive,” says Karen Chapple, associate director of the Institute of Urban and Regional Development at the University of California, Berkeley. So providing help to local small businesses, such as assistance with tax analysis and preparation, might help sustain entrepreneurs, she says.
One oft-heralded economic-development tool is the cluster — a geographical concentration of companies that are interconnected by being in the same industry, being part of the same supply chain or using the same set of job skills, for example. But while clusters can work for rural areas, they're no silver bullet, economists say.
“If there is a misperception” about clusters “it's that these programs have the potential to be adopted almost everywhere,” says David L. Barkley, professor emeritus of applied economics at South Carolina's Clemson University.
Existing businesses with solid growth potential to form the seed of the cluster are essential, Barkley says. Sometimes creativity is required to discover growth potential. For example, while American textile manufacturing has moved offshore, in South Carolina the industry has “spotted growth in the ‘miracle fiber’ sector,” such as athletic apparel that wicks away moisture and extra-warm lightweight hikers’ clothing, he says.
Even then, Barkley says, “you still have to be introspective and ask, ‘Do we have the resources needed’” to compete with other places to attract companies, including areas that have a head start. In the current economy, especially, “many communities aren't likely to be able to do it.”
Despite difficulties, however, “there are lots of interesting” small-scale clusters sustaining local economies, including rural ones, Barkley says. Montana sports a high-end custom log cabin industry, Kentucky has houseboat builders and an area in Mississippi manufactures custom upholstered furniture.
In North Carolina, a group of four distressed rural counties hopes to piggyback on an existing cluster in a nearby metropolitan area — the high-tech Research Triangle Park area, near Durham, just to their south, says Morgan. “They are trying to get economies of scale by collaborating on a large industrial park” that might attract complementary businesses “interested in the lower-cost” living of the rural counties.
— Marcia Clemmitt