Coronavirus in rural America (Part XII): Rural economies

This post will highlight two recent stories about the impact coronavirus is having on rural economies.  I'll lead with this by April Simpson for Stateline, which was co-published by Daily Yonder.  Simpson observes that the impact of the pandemic is going to vary from rural place to rural place, largely depending on the basis and diversity of a given rural economy.  I'm reminded of the old adage popular among rural sociologists: If you've seen one rural place, you've seen one rural place. 

The states least affected by the huge spike in unemployment claims are largely rural. They include West Virginia, Arkansas and Georgia. In part, that’s because those states have taken less dramatic steps to slow the spread of the virus. Among them, only West Virginia issued a stay-at-home order before the end of March. 

Nevertheless, “the industries that have been hard hit are just not as prevalent in rural areas,” said Ernie Goss, an economics professor at Creighton University in Omaha, Nebraska. He cited the relative lack of retail and hospitality businesses in Corn Belt states. 

Economists rank regions as economically vulnerable to coronavirus fallout based on demographic and economic factors, including their number of COVID-19 cases, connection to international travelers, reliance on tourism, population density and reliance on global trade, according to a Moody’s Analytics analysis.

Simpson focuses on Utah as a sort of case study for variations within a state with many sparsely populated counties:

Utah, for example, is a net exporter of energy, so low oil prices have delivered an extra hit to workers in those industries. 

In addition, 10% of Utah’s jobs are in leisure and hospitality. And in the rural areas outside of a narrow string of cities and towns along a mountain range toward the north central part of the state, the reliance on those jobs is even greater. 

“Those rural economies aren’t as diverse as some of the more urbanized places, so the impact we’re expecting might actually be even more concentrated,” said Juliette Tennert, director of economic and public policy research at the Kem C. Gardner Policy Institute at the University of Utah. 

But the economy in Utah doesn’t revolve around tourism like it does in Nevada and Hawaii. Tourism also isn’t an outsized employer in rural counties such as Cache and Box Elder to the northwest and Juab in central Utah, which are among the places Moody’s Analytics considers less vulnerable. 

Manufacturing is among the largest industries in Cache and Box Elder, although each has other anchors, such as Utah State University in Cache County. Juab has agriculture that feeds local demand.

The New York Times on Sunday ran a big business section feature about the impact of the coronavirus on rural economies.  The focus of Patricia Cohen's story is eastern Oregon, from the southern part bordering Nevada, up to Wallowa County, bordering Washington.  Several of folks Cohen interviews  are farmers and ranchers, but she also talks to a musician, a leather craftsman, and a man who owns a hotel and restaurant in Joseph, Oregon, population 1,081, where the summer tourist season--quickly approaching--is a short one.  All of these folks are accustomed to remote living and a great deal of time alone or with just their families.

Some are thinking about future economic survival strategies.  For example, one couple, the Casads, grow organic potatoes:

Their biggest customer, Deschutes Brewery in Bend, closed two weeks ago and laid off more than 300 workers. The Casads, fortunately, have so far been shielded from the worst economic effects. They produced about 50 tons of Kennebec potatoes last year — perfect for french fries — and sold out of them in February, before the epidemic hit. 

“We’re doubling down this year” on the amount they’re planting, Ms. Havstad Casad said. They’ve just begun to seed and plant squash, and won’t be harvesting Kennebecs until the fall.

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And they are thinking about redirecting some of their sales to local grocery stores and organic distributors in case restaurants are slow to recover.

Some of the places featured in the story are Steens Mountain Wilderness, Eagle Cap Wilderness, and Hells Canyon, the deepest river gorge in North America.  Other population clusters mentioned--in addition to Joseph--are Enterprise, population 1,940, Madras, population 6,000, and Canyon City, population 703.