The Real State of Rural Pennsylvania

With the Whole Nation Watching—and the Future Hanging in the Balance—Small-Town Pennsylvania, More than Ever, Needs a Comprehensive Plan for Sustained Economic Prosperity

Rural Pennsylvania has rarely held the attention of national leaders or been the topic of national headlines. But all that changed in the run-up to this year’s presidential primary, when debate centered on small-town PA residents and their response to three decades of manufacturing job loss and unkept promises to bring jobs back.

Is the economy of small-town and rural Pennsylvania depressed? Is there a realistic hope for prosperity and for the middle class in rural PA?

There are no simple answers, say economists at the Keystone Research Center. The reality of rural Pennsylvania is richer than the cartoon drawn by the national media, and potentially much more promising—if state and federal policies provide the support so far lacking.

In the updated State of Rural Pennsylvania, KRC economists Mark Price and Stephen Herzenberg take a close look at the 48 of 67 counties in the commonwealth that are classified as “rural,” using the current definition from The Center for Rural Pennsylvania. Home to almost 30 percent of Pennsylvania’s total population, rural counties are complex, the report finds, and there is both good news and bad news.

The good news, according to Price, a labor economist, is that rural Pennsylvania is not in economic free fall. Since about 1990, the economy of rural Pennsylvania has stabilized, performing roughly as well as that of urban Pennsylvania—better, on some measures. For example, over the past 15 years, rural Pennsylvania has exceeded urban Pennsylvania in job and population growth. “That runs counter to what most people believe,” Price said. “The traumatic first seven years of the 1980s were, in fact, the only extended period since 1969 in which urban job growth in Pennsylvania exceeded rural.” 

Good news, according to the report, also exists measured by unemployment. “Since the late 1980s, the unemployment rate in rural Pennsylvania has gradually fallen towards the same rate as in urban Pennsylvania,” said Stephen Herzenberg, an economist who doubles as KRC’s executive director.

So what is the bad news for small-town, rural Pennsylvania?

For one thing, according to Herzenberg and Price, the region has not recovered the economic ground that it lost in the 1980s.  For example, per capita income in rural PA was 18 percent below that in urban PA around 1980, but 25 percent below by 1990 and 27 percent below today. Partly because of declines in rural wages and income, rural Pennsylvania depends more heavily than urban Pennsylvania on payments from government anti-poverty and social insurance programs, such as food stamps and Social Security.

Another challenge is that rural areas have been hit even harder than urban areas by the erosion of employer-provided pension and health benefits. In both urban and rural regions, manufacturing jobs with good benefits have gone away. In rural areas, most of these jobs have been replaced by lower-paying service jobs that often do not provide good benefits. PA urban areas have a healthier mix than rural areas of higher-paying professional and financial service jobs, alongside lower-paying service jobs

Another challenge, underscored by new data in the updated report:  low educational attainment levels in rural Pennsylvania.

• Up to about 1980, over two thirds of adults in both rural and urban Pennsylvania had no more than a high school degree. Today, in urban areas, well over half of adults have more than a high school degree (56 percent). Well under half of adults in rural areas (45 percent) have more than a high school degree.

• Only one in five rural Pennsylvania adults has a college degree, compared with almost one in three urban Pennsylvanians.

The rural education gap does not simply reflect an older rural population. The education gap between rural and urban Pennsylvania persists among younger adults (aged 25 to 40).

The bottom line of the updated KRC report is that rural, small-town Pennsylvania need not feel a sense of hopelessness. Behind overall trends that show rural Pennsylvania mostly treading water since about 1990 is a growing amount of innovation at the local level: industry training partnerships meeting the skill needs of health care and manufacturing employers, renewable energy initiatives with the potential to provide a new engine of economic growth, grass roots movements to establish community colleges that would close the educational attainment gap and boost local industry, and new efforts to revitalize small town Main Streets and capitalize on natural resources and education assets that can attract businesses and high-paid professionals as well as tourists.

What rural Pennsylvania needs now, Price and Herzenberg say, is a comprehensive economic plan that can connect the dots of local innovation and respond to the challenges of the global economy. “If rural Pennsylvania is left to its own devices, twisting in the winds of global economic change,” Price notes, “there is no good reason to expect anything but income and wage stagnation—and possibly a resumption of economic decline if we have a sustained and deep recession.”

If, on the other hand, rural Pennsylvania receives the attention and the resources it needs, to flesh out and then put in place a workable economic plan, it could utilize its rich assets—breathtaking beauty, charming small towns, a strong work ethic, and community mindedness—as a basis for a new era of vitality, the Keystone economists say.

One indicator of the strength of community in rural Pennsylvania: relatively small income gaps between the richest and the poorest. Unlike in urban areas, where gaps between the very affluent and the struggling working class often cause a distinct separation of cultures, the smaller income gap in rural regions can lead to a common interest in economic policies that benefit people across the income spectrum. Rural Pennsylvanians are “in it together” more than residents of other areas.

The same political blogger who sparked the primary debate about small-town, rural Pennsylvania recently took note of that strong sense of togetherness. “Pennsylvania unfolds in an interlocking chain,” wrote Mayhill Fowler in The Huffington Post, “… held separately and together by a sense of shared community, of humor, of history, and of abiding faith.”