Rural areas plagued by poverty

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By Harold Morgan

After World War II, national defense provided the biggest economic boost. But today, the rural areas farthest from the metro areas struggle under century-old burdens of limited educational opportunities and substandard infrastructure, among other challenges. Those rural counties near cities or with natural amenities have tended to hold their own.
Rural counties are plagued by what the U.S. Department of Agriculture calls “persistent poverty.” Residents of rural areas “earn substantially less” than metro residents.
Sound broadly familiar? It should.
But if this summary of rural economic problems doesn’t quite sound like New Mexico, that’s because the description is of Florida, Georgia, Alabama and parts of three other states, the territory served by the Federal Reserve Bank of Atlanta. The description is in “Wanted: Jobs 2.0 in the Rural Southeast,” in the current issue of EconSouth, a publication of the Atlanta Fed (frbatlanta.org).
For New Mexico the article provides a useful summary, the type of overview we seldom get. It is close enough, overall, to provide insight, allowing for differences. With our double dip recession in place, we should take insight where we can find it.
Income is a link. New Mexico and the southern states occupy the bottom ten. The article talks about counties because the best available data refers to counties. Rural here, logically enough, means not metro, specifically not part of a Census Department designated metropolitan statistical area. New Mexico has seven metro counties, four around Albuquerque, plus Las Cruces, Santa Fe and Farmington. County size is a difference with the south. Our counties are large which means that parts of “metro” Albuquerque, for example, can be really, really rural.
Question one in the article is whether rural economic development is worth the bother. After all, even without much of an economy, rural areas offer the blessings of culture, community attachment and social support systems. People moving to the city could strain social safety nets. Still, the money is in the cities.
Persistent poverty means 20 percent or more of residents fall below the federal poverty line, as measured by four consecutive censuses.
Farms have become fewer. Whether by choice or necessity, nonfarm proprietorships have increased. One reason is the need for more income. Another is self-reliance. These self-employed rural entrepreneurs earn less than people with wage jobs for reasons possibly including being in low-income economic segments (small engine repair) and under reporting income. (Gosh!)
Very tiny businesses escape the attention of economic development agencies. Still, various business support networks and services often exist, but businesses fail to find them. (Chickens and eggs here, it seems.)
Broadband is necessary these days. While broadband will not solve economic problems, lacking it is a definite negative, holding back development of other principal area economic factors such as natural resources, labor force quality, local business specialization and proximity to a major highway. Broadband access ranks as a utility, rather like electricity and running water.
Economic development strategies remain tilted toward wooing outside employers, especially manufacturers. Having a bulldozer blade a tract outside of town, running utilities and calling the site an industrial park is not considered especially useful. While place counts, the world is much more complex.
The missing critical piece commonly is intellectual infrastructure, which means the locals are poorly educated. Funding issues are called the main issue with quality education.
Retaining businesses is an imperative, not a choice. The South has lost all sorts of textile and furniture businesses. Every town seems to have an empty industrial building.
The article concludes, “For rural areas, efforts to generate jobs and economic growth are never ending. Low taxes, inexpensive land and right-to-work laws often are not enough. Clear-cut solutions are scarce. The challenges are not.”
Harold Morgan
New Mexico Progress