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 Spring 2015


Rural unemployment rate in Virginia dropped a point in 2011

By Lee Burlett

ICF International, a global professional services firm, will establish its first operations center for Business Process Management (BPM) in rural Henry County, Va. The $15 million center will create 539 new jobs. Va. Gov. Bob McDonnell (pictured) said, "This project is truly transformational for Henry County.” ICF International is a Virginia-headquartered company that was seeking a location for its first operations center for BPM. Also pictured to the right of Gov. McDonnell is Sudhakar Kesavan, ICF Chairman and CEO.The rural regions of Virginia are some of the most stable in all of the rural American South. But don't tell that to leaders in Virginia. Historically, economic development officials and politicos in The Commonwealth have displayed a consistent air of insecurity about their rural regions over the years. It is something that we have never understood considering rural regions in Virginia typically outperform rural regions in all but one or two Southern states in overall employment rates.

On the surface the fact that rural Virginia has consistently outperformed states such as Alabama, South Carolina and Tennessee defies logic. The aforementioned states all have burgeoning automotive clusters. The automotive industry is the 800 pound gorilla in the room so to speak when it comes to rural development. No industry employs more people in Small Town South than the automotive industry.

Virginia, on the other hand, has a small automotive cluster, but nothing like that found in Alabama, Kentucky, South Carolina or Tennessee. Like all states in the Southern Automotive Corridor (, Virginia would do everything possible to land the biggest prize in economic development in the South; a major automotive assembly plant.

Virginia has also historically been the home to industries that have been hammered, such as the furniture, textiles, tobacco and other manufacturing and agribusiness sectors that have left in droves over the last 15 years. So, what's up with the rural economy in Virginia where in 2011 it shed a point off of its unemployment rate from 7.84 percent in November 2010 to 6.85 percent in November 2011? That's right, rural unemployment in Virginia's counties was below 7 percent in November, compared to 10.2 percent in Alabama, 11.4 percent in Tennessee and 13.7 percent in South Carolina, three of the four-largest automotive states in the Southern Automotive Corridor.

Rob McClintock, Director of Research for the Virginia Economic Development Partnership, has an idea why Virginia's rural areas regularly outdo other Southern rural economies. "Virginia has a number of small, medium and large-sized MSA's sprinkled all over the state which have close proximity to areas that are truly rural such as the Middle Peninsula, Northern Neck, the Piedmont and Southside. This allows employees to be mobile and travel relatively easily to places of employment. Virginia's highway system helps reinforce this case of transit in the rural/edge communities. This helps keep the employment rates higher than places that are more remote. More distributed metros lead to statewide economic diversification and relative prosperity," McClintock said.

McClintock went on to say that the rural areas of Virginia have been helped in recent years by massive state and federal investments in broadband capability. "This has spawned a number of non-traditional, service and information technology-sector jobs" in rural regions of Virginia.

Linwood Wright, a former mayor of Danville, Va., which is located in the Southside region, weighed in on the issue. "I would make the argument that Virginia has a lower rural unemployment rate than other Southern states because it has historically dealt with economic development in rural areas for three decades with the realization that these traditionally high manufacturing areas were going to be hammered by the movement of textiles, tobacco and furniture to off-shore manufacturers. The Commonwealth did not wait for the demise of these industries to create a crisis, although the sudden loss of large segments of employment in southern Virginia certainly created major problems. There are still pockets of high unemployment in sections of rural Virginia and the economic development activity is feverish in those areas," Wright said.

He also supported McClintock's assertion: "Virginia benefits from major federal government employment, which in many areas of the state spills over to more rural jurisdictions as people commute further to work. Realistically, rural Virginia is more difficult to define than in other states in the South because of these commuting patterns," Linwood said.

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