Understanding Rural America
County Types
Manufacturing Counties
Nationwide, manufacturing employs more than twice as many rural people as
does farming. Contrary to popular opinion, rural manufacturing is not primarily
involved in the processing of food or the provision of farm inputs. In 1991,
only about 13 percent of rural manufacturing was
closely tied to farming. In fact, in many rural counties, manufacturing has been
replacing farming as the primary economic activity for several decades (note 2).
Of the county types based on economic specialization,
manufacturing-dependent counties are second in number only to farming counties.
These 506 counties are home to 31 percent of the rural population. Concentrated
in the eastern half of the Nation--particularly the Southeast--these counties
receive 30 percent or more of their earnings from manufacturing.
Map: Manufacturing counties are home to nearly
one-third of the rural population.
As with farming, forces of change are at work in manufacturing. On the one
hand, routinization of production methods; readily available technology;
world-wide improvements in transportation, education, and health; and relaxation
of trade rules combine to enable many companies to locate their production
facilities anywhere in the world. Today, everything from auto parts to computer
chips to clothing is made abroad and shipped to the United States. Such
conditions increase the global competition for low-skill, low-wage manufacturing
jobs--the type of manufacturing jobs most prevalent in rural areas--and have the
potential for pushing real wage rates down in rural areas facing that
competition.
On the other hand, the highest returns (and therefore, higher paying jobs)
in manufacturing in this era of increasing global competition go to makers of
high-value products with short production runs, quick turnaround, and products
in so-called niche markets--for example, specialty medical equipment and
supplies, electronic instruments, and even custom-made furniture. The ability to
compete in these markets, however, requires access to information, finance, and
transportation. And, since these assets tend to be more readily available in
urban areas than in rural, urban firms often have the upper hand.
Chart: Jobs in manufacturing counties tended to
pay more than in nonmetro counties as a whole throughout the decade.
Thus, rural manufacturers and their employees are caught between two types
of competition: low-wage, low-skill manufacturers abroad and high-wage,
high-skill manufacturers in metropolitan areas.
The economies of the manufacturing counties improved slightly during the
1980s, due mainly to gains made in the latter part of the decade. However, these
gains were primarily in the fast-growing services and government sectors, rather
than in the manufacturing sector. In the services sector of these counties,
total earnings increased 15 percent and jobs grew 46 percent between 1979 and
1989. In contrast, throughout most of the decade, manufacturing jobs showed a
slow decline, with growth beginning after 1987. As a result, manufacturing jobs
in these counties grew 2.8 percent for the decade.
Following a general trend for nonmetro areas as a whole, manufacturing
counties experienced a decline in earnings per job over the decade. Even with
this decline, however, earnings per job in these counties have been consistently
higher than in nonmetro counties as a whole.
The population of manufacturing counties grew by 1.5 percent from 1980 to
1990. Manufacturing counties in the Midwest, however, lost population.
Manufacturing counties are more likely than other nonmetro counties to have
larger urbanized populations, to be adjacent to urban centers, and to have high
population densities. Thus, they tend to have greater access to services that
are important to the success of rural business. That fact notwithstanding, the
largest growth rate of manufacturing jobs occurred in the most rural
manufacturing counties.
Chart: Job growth in manufacturing counties came
chiefly from the nonmanufacturing sectors.
Competition from both foreign and metropolitan manufacturers will likely
continue to be a significant factor in the future of rural manufacturing
counties. Unless new ways are found to improve the competitiveness of rural
manufacturing--through production modernization, improved management practices,
creation of networks for cooperation, and improvements in worker skills--real
earnings per job may continue to suffer and, consequently, the well-being of
residents to lag.
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Updated: February 11, 1997
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