Closing the economic gap between Southern Persistently Poor Counties and non-Southern Persistently Poor Counties and Appalachian Regional Commission counties
McKissick, John C.
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An analysis conducted by the University of Georgia Center for Agribusiness and Economic Development has explored the economic differences between counties classified as Southern Persistently Poor Counties (SPPC), Appalachian Regional Commission (ARC), and those counties lying in the seven states of the SPPC but not classified as persistently poor (non-SPPC). The analysis revealed that significant gaps exist in the per capita output of goods and services, the source of wealth creation, with the SPPC trailing each region. Other major differences were found in the diversity of the region’s economy and dependency on low-wage manufacturing and government for the production of goods and services. While the underlying reasons for the gaps are the focus of other economic development research, the results of the economic disparity in the SPPC are clear. The comparative economic gaps lead to lower household incomes than in the other regions with a smaller percentage of household income resulting from work. The SPPC ‘s economic condition in turn results in the widespread and persistent nature of the region’s poverty. Poverty cannot be reduced in a sustainable manner until and unless the means to create wealth within the community is strengthened. Thus the SPPC counties were found to be uncompetitive even with those regions previously identified for targeted federal assistance to fight persistent poverty. Naturally, the question arises as to the regional cost or consequences of this economic gap. The focus of this paper is the “opportunity cost” of not closing the wealth creation gap of the SPPC. The lost opportunity can be thought of as the resulting returns to households and even to government from a successful effort to eliminate comparative output differences in the regions analyzed. The comparison with the ARC is particularly instructive, as the ARC has enjoyed measurable success with a targeted economic development strategy over its 30-year existence.