Bacon's Rebellion

Democracy Thrives in Sunlight

And Now… Some Mind-Blowing Data about Rural Virginia

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by

James A. Bacon
in , ,

Source: StatChat blog

Rural Virginia may have seen a decline in the number of jobs since 2011, but get this: Incomes have been rising faster than in Virginia’s metropolitan areas — 12% since 2010 compared to just 5% for the metros, says Hamilton Lombard on the University of Virginia’s Demographics Research Group blog, StatChat. Likewise, poverty rates have fallen more in Virginia’s rural areas.

Other than Virginia’s coalfield region, which has seen a net loss in jobs and the lowest wage increases in the state’s 15 workforce investment board regions, non-metropolitan Virginia has fared pretty well. Overall wage levels remain considerably lower, of course, but the faster rise in incomes conflicts with the perception (which I no doubt have contributed to) of communities in decline.

If jobs are disappearing, how can wages be rising? Classical economic theory would predict the opposite. As a demographer, Lombard understandably offers a demographic explanation for the surprising results. The answer: migration and aging. 

In much of the 20thcentury, workers moved from low income counties to high income counties in large numbers across Virginia and the nation. Workers moving to high income and more urban counties increased the urban labor supply, keeping wages down, while workers leaving low income and more rural counties shrunk the rural labor supply, forcing employers to increase productivity and wages. …

Today, an aging population–rather than residents moving away–is tightening the labor supply in many of Virginia’s rural counties and pushing wages up. Over the next couple of decades, employers in many rural counties will likely be forced to raise wages more and invest in automation to combat a projected decline in the workforce.  If current trends continue, the income gap between rural and urban Virginia should close further.

Yet the economies of rural and urban Virginia appear to be heading in different directions. Shrinking working age populations in the coming decades will likely make it more difficult for rural counties to attract new employers who prefer a stable labor force. At the same time, the workforce of Virginia’s larger metro areas will continue to grow.

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10 responses to “And Now… Some Mind-Blowing Data about Rural Virginia”

  1. LarrytheG Avatar
    LarrytheG

    I think there may be a problem here in categorizing the data.

    When we say “METRO” – do we ALSO mean the exurban commuting counties because the category says “Outside METRO”.

    Second, if we are measuring MEDIAN household income and it’s INCREASING – in rural areas – what exactly does that mean. Are there less households – a decrease in households and even then – how does that translate into INCREASED income per household if the number of jobs in the local economy is the same or less?

    there’s apparent contradictions here..

    I’m suspecting some sort of data hiccup…

  2. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Again, WHY IN THE WORLD SHOULD WE BE BE SURPRISED!

    TRUMP SAID HE’D FIX THEIR PROBLEMS. AND HE’S DOING IT.

    Wake up you ELITE BUBBLE HEADS.

  3. Steve Haner Avatar
    Steve Haner

    Where is the wealth concentrated? Retirement accounts, retirees. I had a house for ten years in a rich Nelson County “ghetto” called Wintergreen, and know many folks who have moved to the sticks in retirement. At the same time, as noted, the working class folks with salable skills are moving into the cities or suburbs. I think this is largely what is being reflected. And frankly, I think it is a trend more of those counties should embrace, doing all they can to build up that population (which hardly strains the schools.) Larry and Reed are grinding other axes….:)

    1. TBill Avatar
      TBill

      And the state taxes those retirement accounts pretty hard, assuming they are withdrawing more than a little bit. Our elderly tax benefits basically phase out after a certain income around 90$K married, although SS is tax free. Today though many are deferring SS is they can afford it, so in that case there is a period of vulnerability to the Va. retirement income tax bite.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Steve, you are dead wrong here because you are painting with far too broad a stoke. Yes, retirement homes and projects have been what to date has filled up great swaths of the southern eastern seaboard from the Carolinas south down though Georgia and Florida, along with parts of Gulf Coast and back up through select spots of Appalachia, including its Virginia’s elderly cavalier style outlier Wintergreen. But that’s been going on since long distance vacation railroads late 1800s and car travel post WW1. Put bluntly, those days are dying insofar as they are going to dominate and create alone powerful new markets. There are whole new market forces now, creating whole sets of opportunities and challenges for change. That’s beginning to happen in your home town Roanoke, and all the Valley, saw it all plain as day last Thursday and Friday visiting kin who’ve been there long as you have. Exciting change is everywhere there. Virginia is uniquely positioned for this exciting new future.

  4. LarrytheG Avatar
    LarrytheG

    Oh I have no ax to grind here other than to get an accurate representation of what is going on. I’m a fairly frequent visitor to rural Va (and West Va, and rural NC) and I just don’t see much “wealth”. I see a lot of hollowed-out towns – all that is left is govt like Sheriff and Post Office and a get-go fuel stations and if lucky a Piggly Wiggly and some kind of Pharmacy – hardly the kind of place where those of financial means would want to live most of the time.

    There ARE places like Wintergreen – yes.. but go to nearby Lovingston or Scottsville – and you’ll see full-time residents.

    But it goes back to how we define METRO and “exurbs”. For instance, east of Charlottesville – along Route 231 to Gordonsville – that’s high dollar real estate farms… Orange, Green, Louisa , etc… but many of those folks do not work where they live… they work in Charlottesville or even Richmond. Lake Monticello is another place… but these folks shop in Charlottesville… there is nothing nearby beyond a small basic grocery.

    Go to the real rural ROVA – like Wise, or Craig or even South Central Va Nottoway or Prince Edward or Mecklenburg and it gets even worse.

    Perhaps it’s my own ignorance and I’m not seeing (with my own eyes) what’s really there.

    I just don’t see much of an economy in most of those places. I see people living there but they go elsewhere for work and shopping.

    1. Steve Haner Avatar
      Steve Haner

      Understood, but the the data is sourced to the zip code, census tract of the home. Those hollowed out areas you see make my point, those folks left. To move the median up you just need to reduce the numbers below the median line….if your point is the “progress” is an illusion, I agree.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Oh, come on, county rural outside parts of Roanoke suddenly now look like Potomac, Md, for goodness sake.

  5. Acbar Avatar
    Acbar

    Back to the subject at hand. Yes, wages are rising in a place like Mathews County, or Wintergreen for that matter, where vacation-homers/retirees sustain the local economy for construction and lawn care and home maintenance and gourmet foods and other services with the wealth they bring in. Anecdotally I see a small subset of the local population doing very well with local businesses, thank you — but there’s something missing. The local kids with initiative graduate from high school and then mostly move away. I think it’s more a matter of initiative than “salable skills.” The ones left behind include some with a decent work ethic — they are sought after and can demand those higher wages. Then there are the elderly, the continuing health-care/disability cases, the welfare cases, the opioid cases — they are not employed at all, or work part-time at best. They are not a magnet for businesses from elsewhere to relocate in search of employees. And Mathews is relatively well off, compared to the counties that don’t even attract the vacation homers. So I agree with the conclusion, “If current trends continue, the income gap between rural and urban Virginia should close further. Yet the economies of rural and urban Virginia appear to be heading in different directions.”

  6. LarrytheG Avatar
    LarrytheG

    The “retirement economy” will never be the same as manufacturing economy in rural RoVa – but it WILL sustain a local workforce that serves the needs of the retirees – from repair services, to construction, to medical to some kinds of grocery and pharmacy retail.

    But it will not “grow” beyond what the size of the retirement demographic is and that means some kids will leave.

    There’s one more potential advantage and that is that successful retirees KNOW how important a good education is and are more likely to support funding it than a local demographic with meager economic resources.

    I guess I do now see that if population decreases and total income stays the same it will boost the median (and the average) however – I’d STILL like to see some underlying data – zip code and jurisdictional. I’d like to assure myself that exurban commuting counties are NOT included in the “outside METRO” zones – that would seriously pollute the premise.

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