Real rural development not good for politicians

We know politicians love ribbon-cuttings; the bigger the better.  Politicians also crave the major industry and big plant opening. (Usually, the politician had nothing to do with the creation of the business; they are just stealing credit from the entrepreneur.)  However, real rural development believes “small is beautiful.”  As discussed in this article entitled There is Such a Thing as Rural Development by Larry Lee, “rural Alabama and statewide policymakers must look beyond our traditional manufacturing economy.”

As I similarly stated here and argued here, Lee accurately states the following:

We need to devote far more energy and resources to helping entrepreneurs get their feet on the ground and to helping small business grow and succeed.  Alabama has known for many years that about 75 percent of all new jobs annually come from industry expansions.

But there is nothing sexy when a cabinetmaker hires one or two people. There is not a groundbreaking or photo op for mayors, county commissioners and officials from Montgomery.

We must recognize that, by and large, rural Alabama is the land of small businesses.  Census data shows that of the 25,000 businesses in rural communities, 96 percent of them have 49 or fewer employees.

State officials need to understand that what may be small in one area, may be large in another.

He recounts an interesting yet revealing account.

For example, a legislator friend represents two rural counties and part of an adjacent metro county.  Several years ago a company in one of the rural counties wanted to expand and add 50 jobs.  He went to Montgomery to see what kind of assistance might be possible for the company and was told, “Fifty jobs aren’t in our matrix.”

So true. Are you  “too big to fail?” If not, forget about it.

Everyone knows I love statistics so I reveled in this.

Here’s what Montgomery didn’t understand:

For every person in the labor force of the rural county in question, there are 12.8 in the metro labor force next door.  When you multiply 50 jobs times 12.8 you find that the impact on the rural county’s labor force was the same as 640 jobs in the metro location.

No doubt had my friend told Montgomery that he was dealing with 640 jobs, he would’ve received a different response.

I would disagree with one small but important point within the series of articles. Larry Lee states the following:

Economic development is about bringing outside dollars to a community, whether they come in wages from a company, from ladies in Birmingham and Mobile who want brown eggs, in dollars spent by outdoorsmen, in the income of retirees escaping the crime and congestion of a metro area or in activity created by a new doctor in town.

Economic development should rather be about keeping local dollars in our community. We cannot depend and rely on “outside dollars.” Otherwise, we remain dependent. As I wrote here, resilience and self-reliance must lead in priority in economic development.  We cannot be so utterly vulnerable to the actions and decisions of others.

I still believe as I did when I wrote here that:

We must close these “leaks” from our local economies. These leaks are as dangerous to our communities as a parasite is to our bodies; it saps our communities of its vigor and vitality. Our communities must be willing to develop industries that can supply our local needs, locally.

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2 responses to “Real rural development not good for politicians

  1. Another good article by a very smart man. One that would represent Senate District 13 well in Montgomery.

  2. Pingback: Alabama near top for job losses this past decade « Greg Varner for Alabama State Senate

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