Many rural counties are growing faster than urban centers. But when people move out of the city they often find that the same job pays less than it would in Boston or New York. Why?
Classical economics would note that rural workers often have to do more general tasks and aren’t as specialized as their urban counterparts. Ever since Adam Smith described that pin factory, the productivity gains from specialization have been part of economic legend. Ten pin-factory workers can make about ten thousand more pins per worker than just one artisan. And the more productive we are, the higher our pay.
But many factors can make rural life more productive. The internet and modern communication technology allow people to work together who are worlds apart. With conferencing software, Blackberries, and cell phones it’s as possible to collaborate from a barn loft as in a conference room.
Still, the distractions of rural life and lack of infrastructure can put some potholes in this road. But given the cost-of-living and quality-of-life advantages, I would expect this trend to continue.
Douglas R. Tengdin, CFA
Chief Investment Officer
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