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This report, “Sundown on the Sunbelt? Growth Without Development in the Rural South,” by Donald Tomaskovic-Devey, prepared for the Ford Foundation in October 1991, analyzes economic development in the rural South, focusing on North Carolina. The report highlights a core contradiction: while the U.S. South has experienced significant economic growth, particularly in urban areas, many rural regions remain deeply mired in poverty. This is particularly true for the “black belt” region, historically shaped by a slave-based plantation economy. The report distinguishes between economic “growth” (increased employment and production) and “development” (increased standards of living). It argues that the South has achieved growth without widespread development, especially in rural areas. Key findings of the report include:
- A significant percentage of jobs in the South, particularly in rural North Carolina and for Black women, pay poverty-level wages.
- The prevalence of low-wage, low-skill economic development is linked to traditional elite control over the local economy.
- Outside firms, while paying higher average wages and better rewarding skilled workers, pay poverty-level wages for low-skilled labor at similar rates to local firms, thus not significantly reducing poverty wages.
- Businesses identify the lack of skilled labor as the most serious threat to future economic expansion, outweighing infrastructure, tax levels, or capital availability.
- Most businesses would remain in North Carolina and support higher taxes to improve communities, even if wages rose.
The report criticizes the overemphasis on branch plant recruitment strategies, arguing that they lead to low-wage jobs and a neglect of human capital development. It also notes that the internationalization of the economy diminishes the South’s comparative advantage based on cheap labor. The author proposes policy shifts in three areas:
- Industrial Recruitment: Reduce reliance on branch plant recruitment, refocus on higher-wage producer service firms and existing local firms, and tie investment incentives to skill enhancement guarantees and transferable skills training.
- Growth-From-Within: Be sensitive to the historical failures of local employers, strengthen social groups with high-wage/high-skill development agendas, incorporate business service support, and encourage training consortia and worker cooperatives.
- General Human Resource Issues: Significantly upgrade public education and community colleges to focus on general skills, and encourage literacy initiatives.
The report’s analysis of North Carolina’s historical context reveals that local economic elites, often with ties to the plantation economy, have historically maintained a low-wage, non-unionized economy, especially in rural “black belt” counties. This historical pattern, characterized by elite concentration, racial exclusion, and a lack of progressive politics, continues to influence economic development patterns, leading to high poverty and inequality. The Civil Rights movement, however, has begun to drive a wedge between traditional rural elites and more modern urban industrial elites.The analysis of North Carolina counties confirms that areas with high land-owning concentration and large Black populations tend to have less industrial diversity, more enduring agricultural production, lower educational achievement, and higher unemployment. The report suggests that while outside firms do invest in these areas, it is often to exploit cheap labor, and their presence does not necessarily lead to reduced poverty or inequality. The authors conclude that a shift towards a higher-skilled, flexible production system, driven by human resource development, is essential for the rural South to avoid increased poverty and a downward spiral of wages.
