HARRISBURG, Pa., June 19 /PRNewswire-USNewswire/ -- Rural Pennsylvania needs fresh economic approaches and a comprehensive rural development vision to take advantage of a pause in the region's decline, according to a new study of Pennsylvania's rural economy by the Keystone Research Center titled The State of Rural Pennsylvania. "Pennsylvania's rural economy is now at a crossroads," says Dr. Stephen Herzenberg, an economist and co-author of the report. "Rural and state leaders face critical choices about how to best capitalize on recently improved economic trends while ensuring that some festering problems don't overwhelm progress." Among the positive recent developments, according to The State of Rural Pennsylvania: -- jobs in rural parts of the state have grown by 25% since 1987, nearly twice the 13% job growth of urban areas. -- Unemployment rates in rural and urban Pennsylvania are now nearly the same, a significant change from early 1983 when rural unemployment peaked at 17% but urban at only 12%. -- Per capita income is 38% higher in rural Pennsylvania than it was in 1979. "Rural Pennsylvania has clearly stabilized since the free fall of the 1980s," says report co-author and labor economist Dr. Mark Price. "Yet the long-term trends are still not good enough." Price explained that the report finds some causes for concern -- Between 1979 and 2004, the bottom 70 percent of rural Pennsylvanians experienced a decline in their taxable income. -- 16% of rural residents now lack health insurance, compared to 12% for residents in urban Pennsylvania. -- At the end of the 1970s, on average, rural Pennsylvanians earned 82% of what urban workers did. Now they earn 73% of what urban workers do. One significant obstacle to rural economic progress is rural Pennsylvania's educational attainment gap -- Only one in five rural Pennsylvanians aged 25-64 have a college degree compared with one in three in urban Pennsylvania. -- Well over half of rural Pennsylvania adults 25-64 (56%) have any education beyond high school. "In today's economy, lower education and skills hurt workers' chances for a good job and hurts businesses ability to compete in global markets," says Herzenberg. A second obstacle is the erosion of rural Pennsylvania's middle-class manufacturing base combined with a lack of growth in high-wage service jobs: -- One in six rural jobs remains in manufacturing, down from roughly one in three in the late 1960s (but more than the one in eight jobs urban Pennsylvania now has in manufacturing). -- In Rural Pennsylvania, higher-paying private service industries, such as information technology, professional services, and finance and insurance, account for just 12% of jobs. This compares with 20% in urban Pennsylvania. "Pennsylvania needs to do a better job of bolstering high-wage rural manufacturing," says Herzenberg, "while at the same time focusing new energy on creation of good jobs in the services." During recent decades of economic restructuring, the report notes, public programs have been an important source of economic stability in rural Pennsylvania. So-called "transfer payments" make up 22% percent of personal income in rural areas compared with 16% in urban Pennsylvania. Social Security, Medicare, and Medicaid payments account for the bulk of transfer payment income. To go beyond treading water to a new era of more robust prosperity, the report concludes, Pennsylvania needs a comprehensive new rural economic development strategy. "Even though 28% of the state's population lives in rural areas, rural Pennsylvania is too often an afterthought when it comes to state policy," says Herzenberg. "More than three decades since the shift to a global economy began, a real business plan for rural Pennsylvania is long overdue." A statewide vision and plan for rural Pennsylvania, Herzenberg adds, must be accompanied by the leadership and resources to customize and implement the plan in each of the state's rural economic regions. The State of Rural Pennsylvania also outlines policy specifics in four broad areas. First, to close rural Pennsylvania's education gap, the state needs to invest in education and skills. A centerpiece of this investment should be the creation of a rural community and four-year college system that will make postsecondary education and training accessible and affordable for all rural businesses and residents. Second, the state must move beyond antiquated smokestack chasing economic development policies and invest, on a regional basis, in key rural industries with potential for growth. In much of rural Pennsylvania, these assets include natural beauty and tourist destinations, town centers, a powerful sense of community, and, in some places, colleges and universities. Third, rural Pennsylvania has a powerful stake in state policies to promote more affordable access to health care and pensions. Fourth, rural Pennsylvania has a strong need for more progressive state taxation. As the state's poorest region, rural Pennsylvania funds an unfair share of state programs because state taxes take their largest bite out of the incomes of the less affluent. "Should the state fail to act," says Herzenberg, "it will force local governments to cope with global economic change without the resources and support they need to compete successfully. It is unrealistic to think that rural counties or municipalities, on their own, will be able to develop the capacities to compete with national states like China or India. In the global economy, that's almost exactly the problem they'll face without a real state rural development strategy."
SOURCE Keystone Research Center