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.
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.
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.
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.
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.
*Rural manufacturing includes manufacturing employment in food processing, food marketing, and farm input industries. Including manufacturing employment in leather and footwear, textiles, and apparel raises the figure to about 28 percent. However, much of the manufacturing employment in textiles and apparel is based on imported and synthetic fibers.