Low-Wage Industrialization and Town Size in Rural Appalachia

LOW-WAGE INDUSTRIALIZATION AND TOWN SIZE IN RURAL APPALACHIA Neal G. Lineback* This study investigates the geographical trends and spatial patterns of low-wage manufacturing industry (1) in East Tennessee in order to formulate generalizations useful in explaining spatial diffusion of lowwage industry in Appalachia (2) and in other underdeveloped parts of the country. Appalachia, as a whole, has had a history of relatively slow overall economic growth, sporadic industrial development, and declines in the principal economic activities of agriculture and mining. (3) Unemployment , underemployment, surplus unskilled labor, outmigration, and a relatively low standard of living have been characteristic socioeconomic problems of the area. Manufacturing in general has not been as successful in Appalachia as in the nation as a whole. (4) Analysts with the Fantus Company, in writing for the Appalachian Regional Commission, noted: Many branches of manufacturing industry have been highly successful in the Appalachian Region. Others, however, have failed to achieve anticipated operating results, a sustained level of new investment, or optimum employment. Still others have suspended operations after a short period. This mixed history of accomplishments and failures—often involving the same branches or similar branches of industry—has not been satisfactorily explained by traditional statistical analysis, economic models or theories. (5) Even though manufacturing in general has not enjoyed the greatest success in Appalachia, it has the potential to solve many of the area's economic problems. Harvey Perloff stated: Economic expansion is in general associated with a relatively high rate of increase in employment in manufacturing and services. Thus, growth of total income and population has been associated in a general way with decline in the relative importance of agricultural employment and increases in the relative importance of manufacturing employment, both for the nation as a whole and for almost every state separately. (6) Attracting manufacturing to Appalachia, however, has been difficult because relatively few locational advantages exist there. It is true that *Dr. Lineback is assistant professor of geography at the University of Alabama. The paper was accepted for publication in April 1971. 2 Southeastern Geographer there are pockets of prosperity within the region where manufacturing is found in sizable concentrations, but these pockets are atypical. Most of the region is essentially rural (7) with few cities exceeding 50,000 persons. The industries which have been attracted to Appalachia—particularly rural sections—have been those whose locational demands have corresponded to the small range of advantages available in the region. Because of the narrow range of advantages, only a few industries have exhibited much growth potential. (8) Unemployed and underemployed labor appears to be Appalachian most available resource as well as its most valuable one. Much of the labor, however, lacks experience in manufacturing, and "... a socialization gap must be bridged between agriculture and extraction on the one hand and manufacturing on the other." (9) But manufacturing industries that are capable of utilizing low-skilled, poorly educated, and inexperienced labor at wage levels below the national average can perhaps bridge the socialization gap. Low-wage, labor-intensive industries also can stimulate a depressed economy. As Perloff observed, . . . not all regions have the relative advantages in regard to input-output access that makes it possible for them to attract such industries (growth industries); many can expect to grow only slowly on the basis of the industries for which they do have special advantages. Looked at in terms of relative advantages in resources, markets, human skills, amenities, climate, transport facilities and cost, and the rest of it, some areas can hope to grow only by attracting labor-intensive industries . . . (10) Carrier and Schriver found in Tennessee that, ". . . frequently, the Apparel and Related Products Industry (an often-mentioned low-wage, labor-intensive industry) was the harbinger of higher stages of manufacturing . . . ." (11) If low-wage manufacturing has a high growth potential in Appalachia, as all evidence indicates, a number of questions must be answered concerning the characteristics of the industry: What is low-wage industry? What are the locational characteristics of low-wage firms? What are the locational patterns of low-wage firms? Are low-wage firms increasing through relocation diffusion or through expansion diffusion. (12) AREA OF STUDY. East Tennessee was selected as the area...