tag:blogger.com,1999:blog-13520324.post6188288921596198017..comments2024-03-21T13:15:26.838-04:00Comments on The Rural Blog: Rural-connected stocks dropped even more than the Dow in a very bad week for the marketMelissa Patrickhttp://www.blogger.com/profile/01558431327921705882noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-13520324.post-90314173048965832612007-08-05T00:47:00.000-04:002007-08-05T00:47:00.000-04:00The conversation the accuracy of the Yonder 40 as ...The conversation the accuracy of the Yonder 40 as an indicator or rural economic health continues over at the Rural Populist (http://ruralpopulist.org). Here is an excerpt of a longer post: <BR/><BR/>In outlining my objection, I will stick with Wal-Mart as an example. However, my objection is not about Wal-Mart per se, and the argument can be easily extended to Smithfield, Monsanto, or a number of the other companies that comprise the Yonder 40.<BR/><BR/>If you walk down Main Street in Lyons, Nebraska (population 960) where I live it doesn’t take long to start to understand the result of the Walmartization of rural America. A solid 50% of the buildings on Main Street are simply closed, boarded up or vacant. With a lack of economic activity on the street, even some remaining businesses are open sporadically at best. A few can still be counted on to be open every day, but of those, one often wonders how they manage to stay open and how many more years they will hang on for.<BR/><BR/>It hasn’t always been this way. But ever since Wal-Mart began their concerted campaign to infiltrate rural America, and stake their business model on gobbling up an ever-increasing share of rural retail activity, small businesses up and down Main Street in Lyons and small town streets like it across the country, have been shuttering their doors (pdf). Every time one does it means a loss of local jobs and local economic activity. These are losses that often have ripple effects throughout a community. Wal-Mart is most often located in a nearby mid-sized town, and even if one does drive to Wal-Mart to work, the jobs don’t pay what the local jobs did. To add insult to injury, Wal-Mart’s profits are wired to Arkansas at the close of business every day. With them goes the multiplier effect of money spent locally.<BR/><BR/>In short, this is to say, when Wal-Mart does well rural America does poorly. But let’s look at some numbers too.<BR/><BR/>From 1990 to 2000 Wal-Mart stock rose from an adjusted daily close of $6.45 per share to $53.31 per share. That is an 8-fold increase. Following the logic of the Yonder 40, this should be an indication of rising prospects for rural American during the same time period. But rural America did not fair quite so well during the 1990s.<BR/><BR/>Swept Away, a study done by Jon Bailey at the Center for Rural Affairs, reports that while per capita earnings for metropolitan counties in the states studied rose steadily between 1990 and 2000, rural farm and rural non-farm per capita earnings were essentially stagnant in real dollars. At the beginning of the decade, the average person in rural farm counties earned 58 cents for every dollar earned by the average person in a metropolitan county. But by 2000, the average rural farm county resident earned only 48 cents for every dollar earned by a metropolitan county resident. During the same time period, metropolitan counties also saw a job growth rate of 25%. Rural farm counties experienced job growth at a rate just 1/5 of metropolitan counties.<BR/><BR/>In the 10 year period in question Wal-Mart stock doubled, and then doubled, and then doubled again. However, for every year of that period, rural America slipped further and further behind the earnings and job growth of their fellow metropolitan residents. During this time period rural America also continued to loose population, watch the number of farmers decline, and watch the younger generation depart for the city.<BR/><BR/>So, there does not in fact seem to be a positive correlation between Wal-Mart’s stock price and the overall economic health of rural America. While I use Wal-Mart as the focus of my rebuttal, I will stand behind my argument in reference to the entire Yonder 40 index. <BR/><BR/>Read the entire post at: http://ruralpopulist.org/2007/08/04/as-wal-mart-stock-rises-rural-america-falls/Anonymousnoreply@blogger.com