Kristen Smith came home to Corbin, Ky., after grad school in California. That was 12 years ago. She nursed her grandfather through cancer and took over his farm.
“We have some of the richest farmland in Kentucky,” she thought to herself. A sixth-generation farmer, she started “peddling” – that was her grandfather’s word for it – her pork and beef in Corbin’s faded downtown.
The farmer’s market bloomed. Then, looking around at the beautiful, vacant old buildings, she got the idea for a restaurant, The Wrigley Tap Room & Eatery. That was five-and-a-half years ago.
Wrigley’s became a destination for Kentucky Bourbon and food from the region, like fried okra and stack cake, layers held together by apple butter. In Appalachia, Smith told a chef who visited as a part of a Food & Wine feature, people each contributed a layer for special occasions.
A month ago, Wrigley employed 15 people.
Last week, she had to close the dining room and lay off eight. She figures Wrigley can last six weeks on online takeout orders. “But two months …” her voice dwindled, tears threatening.
For the past 20 years, the struggling towns and cities of the Midwest and South have been a symbol of economic decline and America’s uneven prosperity. Now, the lower population densities and diverse economies may mean the middle of the country is spared the worst.
At least, that’s the hope.
“There is beginning to be a feeling of panic. But people are starting to realize: Maybe it won’t be as bad here,” said Ross DeVol, CEO of Heartland Forward, a new think tank supported by the Walton Family Foundation. “Maybe the Heartland can help the rest of the country.”
This week, DeVol released an analysis suggesting that the GDP decline in the 20 states Heartland Forward includes would be half that of the coasts. In the second quarter, he projects the decline in GDP at -5% versus -10%, based on the idea that new infections peak in late April or early May, and that shutdowns won’t be as severe in the region.
As the economy reorders itself following the most massive disruption since the beginning of the Great Depression, the Heartland may be poised to benefit — eventually. “There’s going to be a huge amount of layoffs. It doesn’t take much for people to think about moving back home,” said Steve Glickman, founder of Develop LLC, in Washington, D.C. “People are going to start to move back to places where it’s less expensive to live.”
He and others are starting to consider how fundamentally the pandemic will change patterns of migration to the coasts, as remote working becomes even more of a norm. “You see a pressure to be in big cities,” Glickman said. “How much does that change?”
For now, the lower population densities in the Heartland states seem like a gift: They are giving the hospitals and health care systems precious time to prepare. Even the cities metro areas, Dallas, Houston and Chicago, are not as dense as many that have been hardest hit, like New York City.
In addition, there were likely fewer travelers from Europe and China to seed the pandemic in January and February, before the danger was fully realized. Lower population densities mean it might not travel as fast, which likely means a de facto flatter curve. The key question is still at what point the curve crosses the capacity of the health care system.
“Because of the population density and other issues the pandemic is going to play out differently in the Heartland,” said Cam Patterson, chancellor of the University of Arkansas for Medical Sciences, which includes a 535-bed hospital and medical, nursing and pharmacy schools, among others. UAMS had 153,329 outpatient visits in FY 2019.
“What disadvantages us somewhat is that all the resources are now going to the states that are at the height of the epidemic.”
“I hope Ross is right. He usually is.”
Patterson believes Arkansas, which has a population just over 3 million and with 280 cases so far, is about four weeks behind New York City. Working with the governor, Asa Hutchinson, UAMS has been sourcing medical supplies for all the hospitals in the state. Patterson said his staff is working around the clock to order millions of units of gowns, masks and other protective gear from suppliers around the world, and seeking to acquire several hundred more ventilators. “I’m telling my team that if it’s not arriving the week after next, it’s too late.”
The preparations are serious – but they’re a far cry from the 30,000 ventilators New York governor Andrew Cuomo says his state needs.
Population Density Emerges As A Differentiator
The question of how population density affects different communities is only now beginning to emerge. Not everyone agrees that lower population densities help – America’s most dense city, New York, has become the epicenter, but suburbs have been hit hard in some cases – but the different experiences of America’s largest and second-largest city suggests density is a big issue. New York City had 20,011 confirmed cases and 280 deaths as of Wednesday night. Los Angeles had 662 reported cases and 11 deaths, also as of Wednesday.
Along with lower population density, there are other factors that point to the Heartland as a whole faring better than the coasts, though individual communities are more vulnerable, especially rural areas. “I’m worried about rural hospitals … they exist on a thin margin,” said Patterson. “Will they be able to make payroll? I worry about the most vulnerable people, people with mental illness. People who can’t take care of themselves.”
The pandemic is coming as the Heartland was beginning to turn around. A few dozen cities in the heartland were growing again, places like Indianapolis, Columbus and Kansas City. Small towns like Corbin were rediscovering strengths. Millennials had started to come home. Now, the region is waiting, for the pandemic, and whatever comes after.
DeVol identified a half-dozen factors that could make a difference in the economic crisis in individual communities: the share of the population over 65, exposure to supply chain disruption, employment in travel and tourism or aerospace, and energy.
Aside from the last, “all the factors that you’d look as related to the economic impact of the virus are better in the Heartland,” DeVol said.
But there are Heartland cities with characteristics that make them vulnerable to the pandemic and/or the economic decline. Cities with higher populations of elderly people include Cleveland, Detroit and Milwaukee. Cities with exposure to the decline in trade include Austin and Dallas, where computer components are made. But, DeVol noted, China is still buying U.S. grain under the recent trade agreement with the Trump administration, which should help agriculture in the region. Gulfport, Mississippi, and New Orleans will be hit by the decline in travel and tourism.
Saudi Arabia and Russia Struck The Heavier Blow
“The most extensive (economic) negative consequences of COVID-19 on the Heartland will be from the indirect impacts of reduced oil and gas exploration and extraction operations,” DeVol wrote. His report lists Midland, Texas; Odessa, Lared and Houma-Thibodaux, La., as those likely to be most affected, along with Tulsa and Oklahoma City.
Kentucky is part of the Heartland, but Corbin is in the east, in Appalachia, which occupies the divide between the East Coast and Midwest. Colonel Sanders, the founder of Kentucky Fried Chicken, was from Corbin. “My grandfather was at his first bankruptcy,” Smith cracks.
To survive this, she laid off eight people and started weekly family dinners for them. Within three days, she launched an online menu to keep the restaurant alive. Sales are down 55%. One customer gave $400 in one case, and another $1,000, and others are bringing smaller denominations to pass on to those she laid off while they wait for unemployment.
“Our spirits are high,” said Smith. “We feel like we’re going to make it through this,”
I reached her to ask some followup questions at her farm, where the phone and Wifi connections aren’t good, so she texted me some answers.
She’s thought about whether things will be different depending on distance and geography, in cities, hollers or the prairies. She also thinks it’s time her part of the country caught a break.
“I think at this point, we don’t know how this will play out,” she texted. “The virus hasn’t really hit our region yet so we don’t know. What I do know is, rural America doesn’t have access to healthcare like the urban coast. If it hits us, we might be in more trouble.”
We are in the state of hurry up and wait…and that’s a really scary position to be in. Here in eastern Kentucky coal country…we’ve been digging and digging ourselves out of an economic depression with the loss of coal. Losing the hope and pride we’ve worked so hard to build back could end the momentum and send us back into an unending depression.”
This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.