The past twenty years have been unkind to Halifax County. The Southside Virginia locality has seen wave after wave of plant and business closures — some caused by the restructuring of the tobacco industry, others from globalization and the offshoring of traditional manufacturing industries. The dislocations have been so traumatic that Bloomberg writer Craig Torres used Halifax and the town of South Boston as a mini case study of the downside of the nation’s free trade orthodoxy.
Reflecting a common view, the Heritage Foundation wrote in 2000 that free trade would create “prosperity that benefits every citizen.” While it still is possible to argue that free trade has benefited Americans overall, the impact has been uneven. And hundreds of small-town communities across America like Halifax County were the losers. No wonder, suggests Torres, that Halifax County swung toward avowed protectionist Donald Trump.
Torres spends much of the article describing how economists have begun questioning free trade dogma. He also recounts how the Halifax-South Boston community has undertaken the hard work of reinventing itself, a process that, he says, “might be working.” The jobs gap has closed. Halifax now has 5.1% unemployment, down from nearly 13% — only a tad higher than the nationwide rate of 4.3%. (Torres doesn’t discuss how many people are under-employed or dropped out of the workforce.)
Look at the chart above, taken from the Bloomberg article. The post-NAFTA era of the mid-1990s was devastating to employment in Halifax County. While the U.S. economy as a whole prospered during the Internet boom, unemployment in Halifax shot up to 14%. The county managed to recover to national unemployment levels but got hammered again when the 2001 recession overlapped with China’s entry into the World Trade Organization. But the delta this time between Halifax and U.S. unemployment was somewhat smaller than it had been five years previously. Halifax got slammed in the 2008 recession as well, but the unemployment delta shrank yet again. Today the employment gap has almost disappeared.
Is Halifax County the story of a mill town that has successfully reinvented itself? Writes Bloomberg:
Some manufacturers are still around, from sports-car maker TMI AutoTech Inc. to Swiss industrial giant ABB Ltd. Both received incentives after expanding investment and adding jobs, the county industrial development authority said. The companies’ long-term plans for the region might hinge on whether the local workforce has the right skills; so South Boston and the county turned two former tobacco warehouses into a higher education center, offering college courses and vocational training, from nursing to welding to IT. Technicians trained there are getting hired at Microsoft Corp.’s data center in a neighboring county.
Torres explores what the Halifax example portends for the free trade debate. But the story has implications for a parallel discussion here in Virginia — can Virginia’s mill towns be saved? Or is money spent on economic-development efforts throwing money down the drain?
The evidence of Halifax County is admittedly anecdotal, but it is encouraging. The old economy is gone. It’s hard to imagine that there is anything left for globalization to destroy. Halifax has undergone an economic transition more wrenching than anything that inhabitants of Virginia’s major metro areas could imagine. But the community has adapted. In my humble appraisal, the agglomeration economics of the Knowledge Economy still favor the nation’s big metros and work against communities like Halifax over the long run. But it’s too soon to write off Virginia’s mill towns.There are currently no comments highlighted.