It's Time for Honesty About Rural America

As the beginnings of the 2020 presidential campaign heat up, much focus will be directed towards attracting the votes of rural voters and those in "rust belt" states.   As a piece in the New York Times points out, many politicians will make pie in the sky promises and seek to avoid speaking honestly about rural  and delivering a truthful message that rural voters do not want to hear:  No one knows how to fix the downward decline of rural areas that have seen farming consolidate into large corporate ventures as family farms fall in number and industries such as coal shrink due to changing global economic forces.  In Southwest Virginia, the Northam administration is trying to expand broadband Internet access to aid competitiveness, but rural areas simply are not attractive to many industries and businesses no matter what the Internet access may be.  Improving Interstate 81 would help transportation wise for through traffic, but likely do little to grow shrinking towns and businesses.  For many rural residents, sadly, the true solution may be to leave for more urban areas.  Here are highlights from the Times piece:

Democratic presidential hopefuls are crisscrossing Iowa, trying to assure farmers that they share their concerns. Commentators are publishing opinion pieces about how Democrats can win back rural voters. Think tanks are issuing manifestoes about reviving heartland economies.

There’s nothing wrong with discussing these issues. Rural lives matter — we’re all Americans, and deserve to share in the nation’s wealth. Rural votes matter even more; like it or not, our political system gives hugely disproportionate weight to less populous states, which are also generally states with relatively rural populations.

But it’s also important to get real. There are powerful forces behind the relative and in some cases absolute economic decline of rural America — and the truth is that nobody knows how to reverse those forces.

Many of the problems facing America have easy technical solutions; all we lack is the political will. . . . . But reviving declining regions is really hard. Many countries have tried, but it’s difficult to find any convincing success stories.

What’s the matter with rural America? Major urban centers have always been magnets for economic growth. They offer large markets, ready availability of specialized suppliers, large pools of workers with specialized skills, and the invisible exchange of information that comes from face-to-face contact. As the Victorian economist Alfred Marshall put it, “The mysteries of the trade become no mysteries; but are as it were in the air.”

But the gravitational pull of big cities used to be counteracted by the need to locate farming where the good land was. . . . Nor was farming the only activity giving people a reason to live far from major metropolitan areas. There were, for example, almost half a million coal miners.

[H]owever, while America’s population has doubled, the number of farmers has fallen by two-thirds. There are only around 50,000 coal miners. The incentives for business to locate far from the metropolitan action have greatly diminished. And the people still living in rural areas increasingly feel left behind.

Some of the consequences have been tragic. Not that long ago we used to think of social collapse as an inner-city problem.  Nowadays phenomena like the prevalence of jobless men in their prime working years, or worse yet, the surge in “deaths of despair” by drugs, alcohol or suicide are concentrated in declining rural areas.

And politically, rural America is increasingly a world apart. For example, overall U.S. public opinion is increasingly positive toward immigrants. But rural Americans — many of whom rarely encounter immigrants in their daily lives — have a vastly more negative view.

So what can be done to help rural America? We can and should make sure that all Americans have good health care, access to good education, and so on wherever they live. We can try to promote economic development in lagging regions with public investment, employment subsidies and, possibly, job guarantees.

But as I said, experience abroad isn’t encouraging. West Germany invested $1.7 trillion in an attempt to revive the former East Germany — more than $100,000 per capita — yet the region is still lagging, with many young people leaving.

I’m sure that some rural readers will be angered by everything I’ve just said, seeing it as typical big-city condescension. But that’s neither my intention nor the point. I’m simply trying to get real. We can’t help rural America without understanding that the role it used to play in our nation is being undermined by powerful economic forces that nobody knows how to stop.

Rural voters will not like this message, but that doesn't mean it is not accurate.

Hard Truths of "Saving" the Rural Economy

A lengthy piece in the New York Times looks at an issue plaguing large swaths of the country, including Southwest Virginia and Virginia's "Southside": economic decline in rural areas that seems impossible to reverse.  The piece looks at economic forces, especially the synergy of urban tech centers that works against rural areas, population decline and lower academic achievement that afflict many rural areas.  Here in Virginia, the economic mantra coming from the Northam administration is "all welcoming," yet in Southwest Virginia, the motto is seemingly "only white conservative Christians need apply."  All of the causation enumerated in the article are true, but nowhere are experts willing to call out what to me is another major cause of rural decline: right wing, hate based religion and an often too willing embrace of ignorance.  Progressive businesses want the best and brightest employees and care little about race, sexual orientation or religious belief - a mindset that is the opposite of what finds in Southwest Virginia. Here are article highlights:

Can rural America be saved?  There are 60 million people, almost one in five Americans, living on farms, in hamlets and in small towns across the landscape. For the last quarter century the story of these places has been one of relentless economic decline.

The election of Donald Trump, powered in no small degree by rural voters, has brought the troubles of small-town America to national attention, with an urgent question: What can be done to revive it?

Rural America is getting old. The median age is 43, seven years older than city dwellers. Its productivity, defined as output per worker, is lower than urban America’s. Its families have lower incomes. And its share of the population is shrinking: the United States has grown by 75 million people since 1990, but this has mostly occurred in cities and suburbs. Rural areas have lost some 3 million people.

These days, economic growth bypasses rural economies. In the first four years of the recovery after the 2008 recession, counties with fewer than 100,000 people lost 17,500 businesses, according to the Economic Innovation Group. By contrast, counties with more than 1 million residents added, altogether, 99,000 firms. By 2017, the largest metropolitan areas had almost 10 percent more jobs than they did at the start of the financial crisis. Rural areas still had fewer.

The Economic Innovation Group measures “distress” as a combination of data ranging from joblessness and poverty to abandoned homes and educational attainment. Since the 1990s, there has been an “intensifying ruralization of distress,” said John Lettieri, the group’s president.

[N]obody — not experts or policymakers or people in these communities — seems to know quite how to pick rural America up. States, municipalities and the federal government have spent billions to draw jobs and prosperity to stagnant rural areas. But they haven’t yet figured out how to hitch this vast swath of the country to the tech-heavy economy that is flourishing in America’s cities.

[F]actory jobs can no longer keep small-town America afloat. Even after a robust eight-year growth spell, there are fewer than 13 million workers in manufacturing across the entire economy. Robots and workers in China put together most of the manufactured goods that Americans buy, and the high-tech industries powering the economy today don’t have much need for the cheap labor that rural communities contributed to America’s industrial past. They mostly need highly educated workers. They find those most easily in big cities, not in small towns.

In a report published in November, Mark Muro, William Galston and Clara Hendrickson of the Brookings Institution laid out a portfolio of ideas to rescue the substantial swath of the country that they identify as “left behind.” They identify critical shortages bedeviling declining communities: workers with digital skills, broadband connections, capital. And they have plans to address them: I.T. training and education initiatives, regulatory changes to boost lending to small businesses, incentives to invest in broadband.

Wisely, they suggest that any federal government effort must choose its targets carefully. Better to focus on middle-sized places that are near big tech hubs and have some critical infrastructure, rather than scatter assistance all over the landscape. . . . . however, even the authors concede that they may not be up to the task. “I don’t know if these ideas are going to work,” Mr. Galston acknowledged when I pressed him on the issue. “But it is worth making the effort.”

This is the inescapable reality of agglomeration, one of the most powerful forces shaping the American economy over the last three decades. Innovative companies choose to locate where other successful, innovative companies are. That’s where they can find lots of highly skilled workers. . . . . This dynamic feeds on itself, drawing more high-tech firms and highly skilled workers to where they already are.

In hindsight, no amount of tax incentives would have convinced Amazon to expand in a medium-sized city such as Columbus, Ohio, rather than Northern Virginia and Queens,which sit in some of the largest pools of talent in the country. If even medium-sized cities find it difficult to compete, what are the odds that, say, a small town like Amory, Miss., where 14 percent of adults have a bachelor’s degree and a quarter of its 2,500 workers work in small-scale manufacturing, have a chance to attract well-paid tech jobs?

What if nothing really works? Is there really no option but to do nothing and, as some have suggested, return depopulated parts of rural America to the bison?

Instead of so-called place-based policies to revitalize small towns, why not help their residents take advantage of opportunities where the opportunities are? Geographic mobility hit a historical low in 2017, when only 11 percent of Americans picked up shop and moved — half the rate of 1951. One of the key reasons is that housing in the prosperous cities that offer the most opportunities has become too expensive.

[T]he costs of rural poverty are looming over American society. Think of the opioid addiction taking over rural America, of the spike in crime, of the wasted human resources in places where only a third of adults hold a job.

And if today’s polarized politics are noxious, what might they look like in a country perpetually divided between diverse, prosperous liberal cities and a largely white rural America in decline? As Mr. Galston warned: “Think through the political consequences of saying to a substantial portion of Americans, which is even more substantial in political terms, ‘We think you’re toast.’ ”

The distress of 50 million Americans should concern everyone. Powerful economic forces are arrayed against rural America and, so far, efforts to turn it around have failed. Not every small town can be a tech hub, nor should it be. But that can’t be the only answer.

The irony, of course, is that the funds used by state and federal programs trying to revitalize rural areas come from the the diverse urban areas and the very people that so many rural voters view with contempt or worse. 

Jobs Growth Favors Democratic Counties

Each month when I read Virginia Business magazine, there is a common thread: cities and counties in the so-called urban crescent of Virginia are largely thriving while rural areas and Southwest Virginia are struggle.  With the expansion of Medicaid under Gov. Ralph Northam, many of these rural areas are less likely to lose their local hospitals, but this will not change the reality that younger Virginians are fleeing rural Virginia for the cities and their suburbs leaving those rural areas with an aging and declining population.  Meanwhile, due to the "God, guns and gays" fixation of the populace, most new businesses prefer to avoid the areas and, instead, locate in the more progressive urban regions of Virginia.  The result is that the downward spiral in rural Virginia - and rural America -  continues.  A piece at PBS News Hour looks at the reality that job grow even in a supposedly strong economy is mostly focused on progressive, Democrat voting areas.  Trump has not delivered to his rural supporters who continue to allow themselves to be swayed by Trump's racism and pandering to gun and religious extremists.  Here are excerpts:

On average for the year-ended this May, 58.5 percent of the job gains were in counties that backed Democrat Hillary Clinton in 2016, according to an Associated Press analysis of monthly government jobs data by county.

Despite an otherwise robust national economy, the analysis shows that a striking number of Trump counties are losing jobs. The AP found that 35.4 percent of Trump counties have shed jobs in the past year, compared with just 19.2 percent of Clinton counties.

As more money pools in such corporate hubs as Houston, San Francisco or Seattle, prosperity spills over less and less to smaller towns and cities in America’s interior. That would seem to undercut what Trump sees as a central accomplishment of his administration — job creation for middle class and blue-collar workers in towns far removed from glitzy urban centers.

Job growth in Trump’s economy is still concentrated in the same general places as it was toward the end of Barack Obama’s presidency — when roughly 58.7 percent of the average annual job gains were in Democratic counties.

Yet the lack of transformative job growth in Trump areas hasn’t seemed to erode his support among Republicans, while hiring in Democratic areas have done little to improve his standing with those voters. For Trump’s core supporters, cultural issues such as gun rights, immigration and loyalty to the president have become dominant priorities.

But other issues preoccupy the minds of the party faithful in Trump strongholds such as Beaver County, Pennsylvania, northwest of Pittsburgh.

Chip Kohser, the county Republican chairman and the bristle-bearded founder of a farm share company, said his party members are rallying around their staunch opposition to gun control. “Our No. 1 motivating factor,” he said, “is Second Amendment issues.”

Since May 2017, Beaver County has lost 191 jobs. With the warmer summer weather, hiring is now on an upswing. But employers have fewer job applicants available as the labor force has shrunk by roughly 1,000 workers in the past 12 months, the result of decades of population loss that hit former steel towns such as Aliquippa, Beaver Falls and Midland.

The tax cuts haven’t stopped the outflow of people. Chatting over eggs, bacon and home fries, Kohser estimated that the tax cuts have added perhaps $1,200 to his annual household income and roughly the same to many others in the area — not likely enough on its own to rejuvenate the local economy.

Many of those forgotten men and women might cheer the president for slapping tariffs on imported goods to defend U.S. factory jobs or his vow to build a wall on the Mexican border to block illegal immigration. But for struggling communities waiting for jobs to be restored, Trump’s tax cuts — which were skewed toward corporations and wealthy individuals — have yet to deliver.

During the past year, the healthiest job gains have been in counties containing such vibrant cities as Houston, Dallas, Los Angeles, Las Vegas and Seattle, all of them places that have favored Democrats.

Texas, which Trump won handily, reflects the geographic split in the economy. Within that state, Clinton — not Trump — won the counties that have accounted for bulk of that state’s job growth.

When the Pew Research Center asked voters in June to identify the nation’s most pressing issue, more of them chose immigration, race, political gridlock or Trump himself than the economy. The proportion of people who said the economy was their top priority fell to its lowest level in more than eight years.

Sixty percent of Americans told Pew that they see their midterm vote as an act of either supporting the president (26 percent) or opposing him (34 percent).

[C]onservatives and liberals have become more sharply split on such issues as confidence in the government and social institutions, religious participation and stances on marriage, sex and abortion.

In Pennsylvania, many Democrats see the choices made by Trump as putting democracy itself at risk. Their fears stem in part from his administration’s initial policy of separating refugee children from their parents and his seemingly deferential relationship with Russian President Vladimir Putin, whose nation interfered in the 2016 election, according to U.S. intelligence agencies.

“What I’m hearing daily is fear amongst people as to whether their democracy is slipping away from them,” said Nancy Mills, the Pennsylvania Democratic chairwoman. “I’m really hearing that more than anything else.”

[T]he economic growth he [Trump] promised would revitalize Beaver County may depend on its ability to attract immigrants as it did a century ago when the steel mills brought Germans, Italians and Eastern Europeans workers to the area.

Beaver County never fully recovered from the steel mill closures in the 1980s that caused the unemployment rate to spike at nearly 30 percent.

Many young workers with college degrees migrated east for Pittsburgh’s technology and medical care jobs. The result of this population flight is that Beaver County is rapidly aging, with a median age of 44.8 years old, compared with 37.7 nationwide and 32.9 in Pittsburgh.

Republican Rep. Keith Rothfus . . . said there was a clear path for generating job growth: Immigrants.  You look at areas of the country that are really thriving — there’s a significant immigrant population,” he said. “We need to do a better job of attracting immigrants here. This place was built on immigrants.”

But Rothfus has also been outspoken on the importance of tighter border security.  . . . As of now, Beaver County is still waiting on the job surge.

Rothus, like most Republicans and their supporters would rather pander to white nationals and bigots than speak the truth that GOP policies are harming their base economically.  Meanwhile, the bigotry of the GOP base makes their strongholds unattractive to the very businesses that they need to attract.  Nothing Trump says or does will change this reality. His supporters need to look in the mirror if they want to see the real cause of their problems.

Should We Just Let Appalachia Depopulate?

If there is any part of Virginia that is an economic basket case it is large swaths of Southwest Virginia that comprise a part of Appalachia.  Much of the economic malaise derives from the decline of the coal industry.  But much also comes, in my view, form the region's social backwardness and religious extremism that keeps new industry from entering the region.  The combined result is that young people are fleeing the region, leaving the region inhabited by an increasingly elderly and less educated population.   If Congressional Republicans have their way and gut Medicaid, the regions economy will be even more distressed as rural hospitals are forced to close and some of the few large non-coal related employers cease to exist.  Two editorial in the Roanoke Times - here and here - suggest that perhaps parts of Appalachia should be allowed to simple become depopulated.  The pieces recognize the reality that before the rise of the coal industry, the region was very sparsely populated. A few counties and small cities are trying to embrace education and woo new 21st century businesses. Many, however, are not and the downward spiral, if anything, is accelerating.  Here are  excerpts:

Here’s an uncomfortable question: Instead of trying to build a new economy in Appalachia, should we simply depopulate the place?

Mind you, that’s not a position we’re advocating. It does, however, make for a sobering thought experiment — one that has some important policy implications.

Here’s who got us thinking about this: A friendly fellow named Lyman Stone who issues some dire warnings. By day, he’s a cotton economist in Washington, concerned with the ups and downs of the global cotton trade. On the side, he runs a website called In A State of Migration, which tracks migration trends around the world. A native of Kentucky, he writes a lot about Appalachia. One of his posts — laden with charts and graphs and maps — shows population trends in Appalachia.

The basic point: Westward settlement mostly bypassed Appalachia, likely for the obvious topographic reasons. From 1800 to 1870, what he calls “the classic core of Appalachia — West Virginia, eastern Kentucky and Southwest Virginia — was mostly empty.

Then something happened. Coal happened. Railroads happened. People — many of them immigrants — poured into Appalachia. Roanoke was not the only boom town to spring up then. So did lots of other communities deeper in coal country.

Between 1870 and 1890, the population of many counties in Southwest Virginia (we’ll just focus on our part of Appalachia) nearly doubled. Over the 20 years after that — between 1890 and 1910 — many nearly doubled again. Wise County’s population more than tripled. From 4,785 in 1870 and 9,345 in 1890, Wise County’s population surged to 34,162 in 1910. The coal boom wasn’t over yet. By 1950 — the year most coal counties in Virginia peaked — Wise County topped out at 56,336. West of the Blue Ridge, only Roanoke was bigger.

Put another way, Appalachia was where the jobs were. Now it’s not.

First, coal-mining became more mechanized. People started moving out decades ago, long before the demand for coal dropped. The collapse of the coal economy has only accelerated that population exodus.

All but one of Virginia’s coal counties is smaller than it was in 1950, sometimes dramatically so.  . . . . And their populations will surely continue to decrease for two reasons, one economic, one demographic.

The economic reason: Last year marked the first time that coal was not the nation’s biggest energy source; natural gas surpassed it. Coal will not come back in any appreciable way. The demand of metallurgical coal — used in steel-making — may rebound some, depending on the economy. However, when utilities make decisions on new power plants, they’re looking decades ahead. They are putting their money into natural gas — hence, Dominion Energy’s interest in the Atlantic Coast Pipeline — and, to a lesser extent, renewables such as wind and solar. You can’t simply flick a switch and turn coal back on.

The demographic reason why coal counties will continue to lose population: It’s young adults who are leaving. Rural areas in general are getting older, but Appalachian counties even more so. . . . . There is not going to be a baby boom in the coalfields — so all these counties will simply get older and older, which means another way they lose population: Deaths outnumber births. All that’s old news, of course, just a backdrop for getting to this question: How much lower will Appalachia’s population drop? And should we really try to stop that?

So what is Appalachia’s economic future? There are certainly efforts to change the equation. Wise County is now rich with broadband Internet — thanks in part to investments by the state’s tobacco commission — and is now making a play for data centers. It’s already landed one. The University of Virginia’s College at Wise and the community college there are training students for drones and cybersecurity. There are similar efforts in eastern Kentucky to create what some are calling “Silicon Hollow.”

On the other hand, Appalachia is a lot bigger than just one forward-thinking county. And President Trump’s proposed budget zeroes out funding for the Appalachian Regional Commission, the federal agency that makes a lot of that training possible. It also zeroes out funding for the program that converts abandoned mine sites into marketable industrial sites.

Trump has lifted environmental regulations on coal. This helps the coal economy in the short term, but does nothing to change its long-term trajectory in the marketplace. Meanwhile, he is trying to take away the few tools that Appalachia does have to remake its economy. Even with those tools, though, the challenge to create an economy to match its existing population is daunting.

Stone puts it in clinical terms: “The market equilibrium for Appalachian population may be even lower than the levels we see today. I know this will cause deep sadness for locals who long for recovery; and as someone who genuinely loves Appalachia, it does for me too. But we can’t let hopes blind us to realities. On some level, population must be associated with economic activity to support it. Coal mining is still declining, and when it’s completely gone, it’s not clear how much economic activity will remain, and therefore how much population can be sustained.”

So what is the solution - beside Appalachia dropping its religious extremism and bigotry towards those who are :other"?  The second o-ed suggests something abhorrent to many whites in Appalachia: immigrants.  Here are excerpts from that piece:

In most localities in Southwest Virginia, more people are dying than being born. In 2015, there were about 1,800 babies born in Virginia’s coalfields. But about 2,400 people died.

Furthermore, the number of deaths is only going to accelerate in coming years, because there are bigger age cohorts moving into their senior years. Meanwhile, the number of births is probably going to fall, because there are fewer young adults left to have babies.

That means right now the coalfields’ population declines by about 600 people a year just through the natural process of deaths and births — even if nobody moves out. And that annual deficit is likely to increase to 1,300 to 1,800 per year — again, even if nobody moves out. That’s a lot of people to make up.

So what would it take to keep the population of the coal counties even? To stop the population losses entirely? Hold onto your seat.

There is another solution, one that could repopulate the coalfields. It’s a policy that’s been proven to work elsewhere, but isn’t likely to be very popular in Southwest Virginia. Still, we’ll mention it anyway: Immigration.

One of the great ironies of our current political situation is that anti-immigration sentiment runs highest in rural areas, yet it’s rural areas that logically should be the loudest champions for increased immigration.

The United States is not Canada — a little matter in 1776 made sure of that — but there are some things we might learn from our northern neighbor. Rural Canada faces the same demographic pressures that rural America does, yet some Canadian communities have responded very differently.

Consider the case of Cape Breton, the northernmost part of Nova Scotia. It looks and feels a lot like Southwest Virginia — mountainous, with an economy that was once based on coal. Now the coal mines are shut down, and the population is declining. Sound familiar? The problem does but the solution doesn’t: Community leaders there are actively encouraging immigrants to settle in Cape Breton — and the leadership complains when their provincial and federal governments don’t do enough to direct immigrants there.

Not just Cape Breton either. The Calgary Herald recently looked at two small towns in what it called Manitoba’s “Bible Belt”: “In 2011, Winkler’s population stood at 10,700; Morden’s was 7,800. Both cities and the surrounding region have grown by more than 3,000 people since, thanks to immigration programs that have drawn people from all over the world.” The Herald said the two towns were now economically “booming,” as employers are enticed there by the larger talent pool of workers.

Canadians see more clearly than Americans that immigrants drive the economy, not slow it down. So what would it take to reverse the demographic collapse in the coalfields? A baby boom would help. So would increased immigration. Without one or both of those, the coalfields will continue to die, quite literally.