PORTLAND, Maine — Rural counties are faring progressively worse in recent recoveries from economic downturns, according to a new study, as new business increasingly gravitates toward the country’s largest metropolitan areas.
Economic Innovation Group, a think tank founded by Silicon Valley tech entrepreneurs and investors, last week released its findings based on analysis of census and Bureau of Labor Statistics data on business and job growth.
“In the vast majority of communities across the country, the seeds are simply not being planted for an entire generation of new industries and good paying jobs,” said the group’s co-founder and executive director, Steve Glickman, a former White House and Commerce Department adviser under President Barack Obama.
The group’s study focused on the growth of jobs and new businesses in the wake of past recessions, finding that new business growth has become more and more geographically concentrated.
The report found that in the wake of the Great Recession, which began in December 2007, only one in four U.S. counties grew new businesses at or faster than the national rate.
No counties in Maine were among that fast-growing group; the same goes for job growth during the most recent period, though the state has a distinct disadvantage in being compared with areas where populations are not stagnant and aging.
Large counties such as San Francisco County and New York’s Kings County, including Brooklyn, posted some of the fastest rates of job growth.
Comparing four-year periods from 1992-1996, 2002-2006 and 2010-2014, the report found that fewer and fewer counties made up half of all new business establishments created during that time.
“This reflects a steady consolidation of new business establishments into more populous locales over the course of the past three recoveries,” the report states.
The study found that the national economy added more than 9 million jobs in the most recent recovery and in the early 2000s and a little more than 10 million during the 1990s recovery. In each, however, an increasingly large share of counties posted job losses throughout the recovery period.
In Maine, only Penobscot, Aroostook, Lincoln and Sagadahoc counties were among the group posting job declines from 2010 to 2014.
Overall, the report found counties with fewer than 100,000 people accounted for 9 percent of all job growth after the recession, compared with 20 percent in the 2002-2006 recovery and 27 percent in the 1992-1996 recovery.
The rates of growth in smaller areas also lagged, as counties with fewer than 100,000 people had the slowest pace of job growth and still had a 1 percent net loss of business establishments from 2010 to 2014.
The study noted the trends also are influenced by the depth of the most recent recession, which marked the first time on record that business deaths outpaced new business starts. The report attributed that, in part, to the impact the financial crisis had on access to credit and household wealth.
The depth of that recession may also be the cause of the relatively slow job growth in rural areas, the report stated, as “larger (and presumably more diversified) counties were better equipped to bounce back from this exceptionally deep recession.”
Glenn Mills, chief economist for the Maine Department of Labor’s Center for Workforce Research and Information, said in a 2014 interview that Maine’s economy was less exposed to some of the industries hit hardest during the recession, but it also didn’t have as dense a concentration of industries primed to bounce back.
For the second quarter of 2015, Maine posted the strongest period of new establishment openings and the lowest level number of closures in 10 years, but whether that’s an indication of a broader recovery still to come for more rural parts of the country remains to be seen.