JOB CREATION IN RURAL AMERICA
An Interview with Anita Brown-Graham, J.D
Anita Brown-Graham is Director of the Institute for Emerging Issues (IEI) and a Rural Fellow with the Carsey Institute. She leads IEI’s programs of work around public policy initiatives that include healthcare, economic development, tax and finance modernization, energy and the environment, and higher education. Before joining IEI, Ms. Brown-Graham served as a Professor of Law and Government at the University of North Carolina in Chapel Hill, where she provided significant training for state and local officials and wrote books and articles focused on developing the economic base of distressed communities.
Interviewed by Amy Seif on 4/23/07.
Amy Seif: How is rural America faring in relation to the national economy in terms of adding new jobs?
Anita Brown-Graham: For some rural communities, the economic restructuring of the past four decades has brought jobs, commercial services, population diversity and a significant improvement in the quality of life for residents. These are the poster places for the much heralded “rural turnaround” of the 1990s, and they fare well in relation to the national economy. Unfortunately, most rural places have fared less well. Three hundred and forty of the nation’s 386 “persistently poor” counties are rural, and nearly half of the poor who live in these rural counties are severely poor – that is, with incomes less than 50 percent of the official federal poverty threshold. Moreover, roughly six out of every 10 rural areas lags behind the national economy in terms of adding new jobs and the gap in performance levels between rural and urban areas appears to be widening.
AS: How are rural communities creating jobs?
AB: There is significant variation in the ways rural communities are seeking to create new jobs. Some continue to hold on to strategies for industrial recruitment, others seek to maintain and expand existing businesses and a growing number are engaged in strategies to stimulate entrepreneurial strategies.
In terms of the sectors of the economy at play, some efforts continue to be focused on agriculture and manufacturing as their economic base. In fact, 12 percent of the rural labor force remained employed in manufacturing in 2003. That statistic reflected a drop from 17 percent in 2000, but it was still much higher than the 8.4 percent manufacturing employment figure in urban areas in 2003. Farming employs a lower percentage of the rural labor force (less than 6.5 percent), although the sector still dominates the economies of 403 rural counties. Some rural communities are building jobs in the service sector by capitalizing on their close proximity to urban areas to become bedroom communities. Others are attempting to transform their economies through economic bases in retirement, recreation and trade centers. Agri-tourism, heritage tourism, and eco-tourism are all becoming particularly popular economic development strategies. In fact, recreation and retirement counties have consistently been the fastest growing counties in rural America.
AS: What are the realities about the global economy that will influence rural job creation?
AB: In the past, much of rural economic development relied on exploitation of natural resources or recruitment of industry, often marketing cheap land and labor as community “assets.” In an era of global competition, those old approaches will not yield positive, sustainable results. Today, a community’s economic prospects depend on a flexible, well-trained workforce, access to technology and capital, cultural and natural amenities, and a strong civic infrastructure including relationships that facilitate problem-solving and collective action within the community and greater regions.
AS: What are the development differences between rural and urban areas?
AB: It is important to note here that, while evidence of different levels of economic vitality is clear, the development differences between rural and urban areas should not be oversimplified. Rural places are not disconnected from urban spaces and the nation’s economic prospects cannot be considered independently from the prospects of its rural places. Admittedly, however, developmental challenges are often manifested differently in rural areas; thus creating important differences in the aggregate comparative numbers. In particular, two indicators of economic performance are especially insightful when comparing rural and urban economic performance: income and employment.
First, rural incomes and wages lag far behind those in urban areas. In 2004, rural per capita income was 72 percent of urban income and earnings per job were 66 percent of urban earnings. In “persistent-poverty” rural areas - those areas with poverty levels exceeding 20 percent for each of the last four decennial censuses - many households had incomes only moderately above the federal poverty threshold. In fact, just 48 percent of the population in persistent high-poverty rural counties lived in households with incomes at least double the poverty threshold.
Second, the rural economic base is quite diverse but less so and more reliant on old economy activities like farming, mining and manufacturing than urban areas. On the other hand, while urban areas have higher numbers of counties that are classified as service sector dependent, rural employment in the service sector is definitely increasing.
AS: What’s a better approach for rural communities, top-down economic development or bottom-up community development?
AB: Neither approach, on its own, will provide for effective and sustainable rural development. Effective rural development requires an approach that combines the best of community development with the best of economic development. Typically, economic development strategies are focused on the intersection of public policy and private commerce for the purpose of creating jobs, businesses, prosperity and wealth – benefits desperately needed in many rural communities. On the other hand, community development’s broader focus encompasses social, economic and physical environment initiatives that are designed and implemented by local people. Like economic development, community development claims to create opportunities for jobs, income, wealth, and business growth. However, unlike economic development, its indicators for success move beyond aggregate fiscal increases that may neither be sustainable nor primarily benefit local residents. Effective rural development must demand the outcomes of economic development – jobs, wealth, and prosperity – while building on the fundamental values of community development – development choices led by community residents that enables the innovation of local residents, provides the adequate investments needed to promote economic opportunity, nurture the local natural environment, and build upon social and regional connections.
AS: Are local development strategies aimed at promoting economic growth sufficient to alleviate rural poverty?
AB: Obviously, rural development is not always aimed at poverty alleviation as not all rural areas are poor. However, in order to move areas that are in poverty to a state of prosperity, rural development must do more than raise the incomes of a few. It must affect the incomes of significant numbers of people, especially those who are in low-income households. The new narrative for job creation in rural America must explicitly promote both economic growth and poverty reduction. Without this intentional linking of the two, local development strategies will be insufficient to alleviate rural poverty.