Wednesday, June 06, 2018

There may have been a rural jobs bump; if so, will it last?

Brookings Institution map; click on the image to enlarge it.
Employment in rural America improved in 2017, and though the lion's share of the nation's job growth -- 64.2 percent -- happened in the 52 biggest cities, rural areas saw a 16.6 percent uptick in employment, a gain of more than 320,000 jobs. "In short, at least one core portion of Trump’s America finally won a little during his first year in office, which is good news for America’s troubled rural communities," Marc Muro and Jacob Whiton report for The Brookings Institution.

But Brookings has put its own figures into doubt, with an editor's note added to the top of the article, which cautioned that the uptick is unlikely to last: "Many of the industries that added jobs in rural communities in 2017—such as logging, mining, oil and gas, and construction—remain cyclical given economic and commodity trends larger than any Trump-era deregulation drive or tax cut. At the same time, a slump in prices for corn, wheat, and other farm commodities over the past five years has cut total U.S. farm income in half, with further declines expected over the next decade." And many rural jobs are disproportionately vulnerable to automation and globalization.

Also, the mild increase in rural jobs is overshadowed by an increasingly wide urban growth in jobs, population and economic output: "Quite simply, the sharp divergence of large and small communities’ economic fortunes since the financial crisis . . . is becoming even starker than it has been," the writers said in an earlier article.

Rural areas still have not returned to the the employment numbers they enjoyed in 2008 before the Great Recession, a threshold large metro areas passed in 2012. And though rural areas saw a bump in economic output over the past decade, that was mostly driven by the hydraulic fracturing boom, which leveled off in 2015.

"Against that background, the rural job growth of 2017 is welcome but will likely be temporary for communities that will continue to struggle with world commodity price issues, a technological era that favors cities, and out-migration," Muro and Whiton write.

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