[BRIEF NOTE] On rural economic decline
Nov. 20th, 2009 09:28 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
rfmcdonaldA few days ago, Reuters' Nick Carey took a look at the ongoing economic slide facing Michigan's rural and small town Upper Peninsula region as traditional employers shut down. The article starts in Baraga County, home to some nine thousand people, where the closure of the local factory of earthmover company Terex is about to have a domino effect on the entire economy.
Honestly, I don't see much hope for the Upper Peninsula or its industrial economy. With its small and dispersed population, located fairly far from major North American population centres, the region's only hope might be to adopt the strategies of post-Fordist Third Italy or Germany's Mittelstand of small- and medium-sized businesses, moving to quick nimble businesses strongly focused on high-quality production in very specific fields. Leaving aside the capital shortages and other problems facing these sorts of businesses in the best of times, the region's traditional dependence on resource extraction and heavy industry makes me question whether the requisite skills for such a shift exist in the region. Barring a boom in resource prices, slow depopulation and a shift to service industries along with some immiseration relative to the mean are the only things I can predict for this region.
Admittedly, the Upper Peninsula's an extreme case. Then again, the collapse of autonomous rural economies has been ongoing for a while--one interviewee's wife works as a migrant in southern Michigan--and, just as elsewhere, the shift to a services-based economy placing a high priority on tourism is probably the best that the region can hope for.
As the Terex plant winds down – it used to employ 259 people and is down to 90 – Baraga village manager Roy Kemppainen expects the local jobless rate to top 30 per cent.
That is way above the national jobless rate, which hit a 26 1/2-year high of 10.2 per cent in October. High national unemployment, despite signs of recovery in the economy, prompted President Barack Obama to announce last Thursday that he would host a meeting on jobs next month of company chief executives, trade union leaders, small business owners and economic experts.
Unemployment in rural communities is often related to a big local employer shedding jobs.
“To big corporations a plant like that is just a line on their balance sheet they can cross out,” Mr. Kemmppainen said. “But it employs our people and supports our community. Things here are going to get tough.”
“Some rural communities have been reliant on just one industry for many years,” said Orrin Bailey, CEO of Michigan Works!, The Job Force Board, which runs retraining programs for workers in the UP. “Diversification is the key to survival.”
The UP is a wooded region of small towns, taking up almost a third of Michigan's land but with just 3 per cent of the state's population of 10 million. Tourism, logging, mining and fishing are all mainstays for jobs.
[. . .]
As bad as job losses have been, the region is still faring better than the rest of Michigan, which has been devastated by slumping sales and turmoil at Detroit's Big Three car makers.
But doing better is just relative.
Honestly, I don't see much hope for the Upper Peninsula or its industrial economy. With its small and dispersed population, located fairly far from major North American population centres, the region's only hope might be to adopt the strategies of post-Fordist Third Italy or Germany's Mittelstand of small- and medium-sized businesses, moving to quick nimble businesses strongly focused on high-quality production in very specific fields. Leaving aside the capital shortages and other problems facing these sorts of businesses in the best of times, the region's traditional dependence on resource extraction and heavy industry makes me question whether the requisite skills for such a shift exist in the region. Barring a boom in resource prices, slow depopulation and a shift to service industries along with some immiseration relative to the mean are the only things I can predict for this region.
Admittedly, the Upper Peninsula's an extreme case. Then again, the collapse of autonomous rural economies has been ongoing for a while--one interviewee's wife works as a migrant in southern Michigan--and, just as elsewhere, the shift to a services-based economy placing a high priority on tourism is probably the best that the region can hope for.
