Factors Impacting Future Poverty and Inequality Patterns

Since the War on Poverty began, the number of persons living in poverty has remained relatively stable and the percent of the population in poverty has declined despite structural changes that create circumstances conducive to increased levels of poverty and inequality. The magnitude of these structural changes is likely to increase in future years. Based on the earlier discussion of structural theories, it can be expected that these economic and social changes will have major implications for future poverty and inequality trends. Most prominent among these structural trends are economic restructuring and a variety of changing social conditions. Each of these factors will be discussed in this section.

Economic Restructuring, Poverty and Inequality

Among the more profound changes affecting American society in recent decades are transitions in the way that people make a living (Bluestone and Harrison 1982; Sassen 1990). This economic restructuring has resulted in America moving from an agricultural society where most families depended on farming, to an industrial society where manufacturing comprised the largest segment of the country's GDP, to the post-industrial society of today where a majority of the labor force is employed in the service sector (Morris and Western 1999). Economic restructuring is important because agricultural jobs are fundamentally different from manufacturing jobs, which in turn are fundamentally different from service jobs. Different industries have different wage structures and different work schedules for their employees; they require different levels and types of education; they differ in the types of relationships that exist between owners and workers; and they vary in the proportion of the workforce that is either male or female. All of these and other factors are likely to have major implications for the economic stability of individuals and families, relationships within families, the strength of community institutions, political outlooks and numerous other aspects of life (Albrecht 1998). Of specific importance for this paper, researchers have found that economic restructuring has significant implications for poverty levels and the extent of inequality.

Communities in the nonmetropolitan United States have been dramatically altered by two major economic structure transformations that began during the twentieth century, and continue into the early twenty-first century. The extent of the impacts of these economic structure transformations vary greatly from one community to another. The first transformation occurred primarily through the middle decades of the twentieth century, though it continues today on a reduced basis. This transformation consists of a massive decline in agricultural employment, largely offset, at least initially, by increased manufacturing employment (Fuguitt et al. 1989; Johnson 1989). The second transformation has been unfolding since the late 1970s, though its full implications are just now being felt and understood. This transformation consists of a decline in both agricultural and manufacturing employment (Perrucci et al. 1988) with corresponding increases in service sector employment (Albrecht 2004; Kassab and Luloff 1993).

The First Economic Structure Transformation

Historically, nonmetropolitan America was economically dominated by the agricultural sector. Even into the middle decades of the twentieth century, farmers were by far the most numerous occupational group in the country. In 1940, for example, the farm population comprised nearly one-fourth of all U.S. residents and a majority of nonmetro residents (Albrecht and Murdock 1990; Beale 1978). Then the first economic structure transformation began to unfold. Largely as a result of technological developments that greatly increased the labor capacity of farmers and allowed them to operate progressively larger farms, there was a rapid increase in the size of the average farm, and a corresponding decline in the number of farms (Dorner 1983; Paarlberg 1980). Between 1940 and 2002, the number of farms declined from over six million to less than two million, while the farm population was reduced from 30 million to 3.9 million. This transition led to what Beale (1993) described as the largest peacetime movement of people in U.S. history as millions of people left the farm, many of them migrating to metropolitan areas. As the number of farm workers plummeted, the booming manufacturing sector began moving to nonmetro communities where industry could employ displaced farm workers and at the same time avoid unionization and keep labor costs lower (Fuguitt et al. 1989). The availability of manufacturing jobs in nonmetro communities slowed the pace of nonmetro to metro migration. Eventually, manufacturing employment far exceeded agricultural employment even in nonmetro areas.

The Second Economic Structure Transformation

Following World War II, the American manufacturing sector began a period of spectacular growth and it was soon apparent that the United States could best be described as an industrial nation rather than an agricultural nation. Manufacturing was the dominant industry in both metro and nonmetro areas from shortly after World War II until the late 1970s, when it became apparent that another major economic structure transformation was occurring in the United States. At this time, the number and proportion of manufacturing jobs began an initial decline (Bluestone and Harrison 1982; Sassen 1990) that has since increased in scope and magnitude (Morris and Western 1999). Some of the manufacturing jobs were lost as a result of technological advancements where machines replaced human labor in the production process. Many other manufacturing jobs have been outsourced to foreign countries by multi-national corporations to take advantage of lower wages in these countries (Harrison and Bluestone 1988). The loss of manufacturing has been offset by extensive growth in service sector employment.

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