Rural economies struggle to keep up

Metro areas thriving since recession but growth isn’t evenly spread out.

LAVONIA, GA. — Paul Musso tips his welder’s mask back like it’s a baseball cap and he’s thinking about the next pitch.

But he’s just between welding assignments and in a moment he will be reaching for an instrument panel, a part that will be shipped about 290 miles southwest to the Mercedes-Benz assembly plant and placed into the chassis of a C Class car.

Musso graduated from a nearby high school and still lives in the area. He smiles easily.

“I like my job,” he said.

He’s among 102 workers at the Linde+Wiemann plant in Lavonia, along I-85 in a 400-acre industrial park tucked into the corner of Hart County, about 95 miles north of Atlanta.

Hart, which owns some of the land with two adjoining counties, has been active in its marketing, a long-running strategy aimed at exploiting the area’s location in pursuit of economic growth. Hart has offered tax breaks, a school-industry apprenticeship program and some empty buildings easily repurposed for new companies.

All that, and yet Hart is barely holding its own against a larger trend: most of Georgia’s economic growth has been going to a handful of metro areas — especially Atlanta. Rural areas have been struggling; many have lost jobs even as metros prosper.

There has long been talk of “two Georgias,” with metro areas outpacing the rural places like Hart. But in recent years, they’ve even stopped moving in the same direction.

“It used to be that there was a big gap, but the gap was slowly closing,” said Jay Shambaugh, director of the Hamilton Project, a research group that is part of the Brookings Institution. “If there was economic growth, it was shared. But in the last few decades, that convergence has stopped.”

Since hitting bottom in 2010 with unemployment in double digits and a half-million people unemployed, the number of Georgians with jobs has soared by 800,000 while the jobless rate has fallen to just 3.8 percent. But the growth has not been spread evenly.

Of Georgia’s 159 counties, 92 still don’t have as many employed people as they did before the recession kicked in, according to data provided by the state’s Labor Department to The Atlanta Journal-Constitution. Nearly all those counties are rural.

There are 75 counties that have actually lost workers since the end of the recession.

And most of the metro areas across the state — especially Atlanta — have done very well. Fulton County, for example, has 10 percent more working people than it did before the recession. Gwinnett is 14 percent past its previous peak, and Cobb is 11 percent higher.

Loss of manufacturing

A smaller labor force usually means a smaller economy and less wealth; a bigger labor force means the opposite. People gravitate to where the jobs are – while employers often move jobs to where they’ll find the workers they need.

But why has growth become so one-sided?

One big cause is the erosion of the rural economic base, said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. For decades, manufacturing was the backbone of rural Georgia, but that sector has taken a vicious hit, he said.

Georgia lost nearly four out of 10 of its manufacturing jobs between 1998 and 2010, according to the Bureau of Labor Statistics. The sector has improved since then, but the gain was concentrated in a few spots, like Kia’s assembly plant in West Point.

For many places, the recovery was far too feeble to stop the slide. Even Hart County has found that modest success in economic development may not make up for the recent losses.

There are about 28,000 people there, according to the Census Bureau, and about half of adults work. The median household income is $41,000.

Like many rural areas, Hart’s economy once leaned heavily on textiles, including the Springs Mills plant in Hartwell, the county seat. That plant closed in 2006, throwing 1,200 people out of work.

After years of effort, a replacement was found: last May, Nestle Purina started using the building as a distribution center for cat food.

About 80 people work there, and there are ambitious plans, said Rachel Miller, the plant manager. The company is making a $320 million investment to build an adjacent manufacturing facility.

The conversion of the abandoned textile plant and the influx of investment are big wins for Hart County. But even when it’s completed in a couple of years, Nestle Purina will employ fewer than a quarter of the jobs that were lost when Springs Mills shuttered.

That is typical through the rural parts of the state. There are new facilities — even in manufacturing — but they simply do not need as many workers as the plants of previous generations.

Meanwhile the jobs that fuel the metro economies have been on the rise, Dhawan said. “Recovery was strong on the service side around healthcare, tourism and so on. And that is all concentrated in metro Atlanta.”

Jobs follow talent

With fewer jobs in many rural areas, workers get pushed away from their hometowns while getting pulled toward the big cities.

Other factors reinforce the oneway flow, said Mark Bell, managing principal of Diversified Trust, a member of the advisory board for Georgia Tech’s College of Computing.

“Students are coming from all over Georgia to Tech,” Bell said. “Then, when they graduate, some of them have $100,000 jobs working in tech. Maybe there aren’t that many of them, but they are in Atlanta. There are no six-figure opportunities for them waiting in Macon.”

That leads to the sort of feedback effect that increases the attractiveness of Atlanta at the expense of the rural areas, he said. “Where there’s talent, that is where the jobs will go to.”

Moreover, that one-way flow can be accelerated by “catalytic events” like an Olympics or Super Bowl that add to the luster of metro areas, he said.

Shambaugh of the Hamilton Project discounts the idea that people are streaming out of economically troubled counties.

“People don’t move as much as they used to,” he said. “And when people from disadvantaged counties move, they tend to move to other disadvantaged counties.”

Instead, he thinks many people — especially men who had worked in factories — dropped out of the labor force and have not come back. In struggling counties, the share of men in the prime working years who have jobs is far below the ratio in growing counties, he said.

“There is a huge difference — it’s massive,” he said.

Some counties continue to hover at the edge of pain.

For example, Telfair County has 266 more workers now than just before the recession hit. But roughly 1,000 full-time jobs are likely to be lost if the Husqvarna Co. cannot find a buyer for its lawnmower plant in McRae — currently the largest employer in the county.

Hart is an exception. The area’s economy has continued to seesaw, but at least the gains have outpaced the losses: Hart has 6 percent more jobs than it had in mid-2008.

Downtown Hartwell is on the upswing, says Mayor Brandon Johnson, a local boy who won the job five years ago when unemployment was in double digits.

“You have to have everybody pull together,” he said. “And one thing the community had never done was to recruit restaurants and retail. You’d drive around and see foreclosed houses, vacant houses and downtown was only 50 percent full.”

It’s still not 100 percent, but even in a chilly December rain it looks busy. People walk the sidewalks or dodge puddles getting to on-the-street parking.

Those looking for someplace warm for lunch find a small line at the counter in Market 50. The soup is thick, the sandwiches are made to order and most of the tables are filled.

But around the block, some store fronts are empty and the challenges continue.

Hart State Recreation Area used to draw several hundred thousand visitors a year to hike and camp and spend money across the area. Starting in 2009, Georgia closed the park from October to March.

“That is an economic hit,” said Nicki Meyer, economic development specialist and former executive director of the chamber of commerce.

Hartwell Manufacturing, an apparel maker that had employed hundreds of workers, closed three years ago, she said.

And now, potentially the most painful news of all: The largest employer in the county, Tenneco, has recently announced it will close its 380,000 squarefoot Hartwell plant, which makes Monroe shock absorbers.

“We think somebody can use that building, which is right in Hartwell, and we are very confident that those people will find jobs,” Meyer said.

The move will toss 550 people out of work.

‘People don’t move as much as they used to. And when people from disadvantaged counties move, they tend to move to other disadvantaged counties.’

Jay Shambaugh director of the Hamilton Project