The Economics of Hillbilly Elegy

In June, 2016 J.D. Vance, a native of Middletown, Ohio with deep familial roots in Kentucky, published his book Hillbilly Elegy, an account of his experiences growing up in Appalachia. His book draws attention to rural poverty, an issue which seems to have been largely forgotten by a great swath of the American populous. His book deals with the economic insecurity, rampant drug use, and cultural components of life in Appalachia and the “hillbilly culture” which defines the region. Vance’s book, along with the rise of Donald Trump, who was able to effectively energize this specific group of people, has drawn increased attention to the issue and has made finding a solution more necessary.



What is Rural Poverty?
Rural poverty, or nonmetro poverty, is an issue that has become more pervasive in recent years and is an issue that will continue to divide the nation unless comprehensive solutions can be found. According to figures by the USDA the rural population of the United States was about 46.2 million in July 2015, or 14% of the population, and this population continues to struggle with higher than average rates of poverty.


The Geographical Concentration of Rural Poverty

Rural poverty is highly concentrated in the South (especially the Appalachian Region) of the United States and thus the Appalachian Region can act as a case study of the more general phenomenon of rural poverty.

What are the Causes of Rural Poverty?

Poverty is a deep seeded issue with a complex range of causes. Rural poverty is a result of many of the same causes: namely educational inequality, labor market issues and changes, stagnation of wages for low wage earners, race, lack of affordable housing, drug use, medical costs, and regional inequalities.

Rural communities, Appalachia in particular, have been especially impacted by the changes in the labor market, educational inequality, the opioid crisis, and cultural components; it is thus these four causes that deserve particular attention in regards to rural poverty.

Labor Market Changes

The labor market has changed dramatically in the years since WWII. The growth of the information and technology based economy has made it incredibly difficult for individuals to find and keep stable and well paid work without an education. Mechanization, environmental regulations, and globalization have eaten away at rural jobs and in many cases the only new jobs being created in the region are in the service sector- jobs like greeting at Walmart. In an interview with the New York Times Vance argues that “Poverty is the family tradition” and the jobs of his ancestors: sharecroppers, coal miners, machinists, and millworkers, are specifically the jobs which are dying out in the modern economy.

The ongoing national discussion regarding the coal economy reflects the growing pains of the changing labor market. This coal jobs are not coming back and yet the rhetoric for these jobs reflect the real effects of the loss of work for low income and non-college educated individuals. The post recession rural job market has shrunk 4.26% since 2008 and it is this data which quantifies the “shuttered coal mines on the edges of rural towns and boarded-up gas stations on rural main streets. In these data are the angers, fears and frustrations of much of rural America.” (Beda).

Educational Inequality

Historically, the education system and educational attainment in Appalachia has lagged behind the nation. Although today there are governmental programs aimed at the region, the historical trend has continued. This regional educational inequality has had great impacts on Appalachia as education is one of the most important components in future earnings. Individuals with less than a high school education have a poverty rate around 35% and the average income of an individual with no diploma is $19,169-compared with $78,093 average income for individuals with an advanced degree (US Census Bureau). Education has become a necessity in today’s economy and yet remains out of reach of millions nationally and in Appalachia.

Drug Use

Rampant drug use is both a cause and effect of debilitating poverty. In Appalachia the figures regarding drug use are especially astounding. Since 1999 over one fifth (22%) of opioid related deaths have been concentrated in seven states in Appalachia: Kentucky, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia. Furthermore, in Kentucky, Tennessee, and West Virginia (the states hardest hit by opioid addiction and rural poverty) opioid addiction costs (as measured by loss of revenue due to jail time, treatment time, and decrease productivity) have accounted for $2.72 billion annually. This drug use thus is a product of and a cause of rural poverty.

Cultural Components

Although rural poverty is caused in large part because of these clearly quantifiable components: changes in the composition of the job market, educational inequality, and drug use, Vance also argues that rural poverty and Appalachian poverty also derive from a more abstract cultural norm. He argues that the Appalachian culture “increasingly encourages social decay instead of counteracting it” and that poverty will be pervasive in the region unless this culture can be altered.


What are the Impacts of Rural Poverty?

Loss of Communal Identity

In the Southeast, especially in Appalachia, the job market of a particular town or county was a large part of the culture of the area. According to Steven Beda, of the University of Oregon, “It used to be that, when someone first arrived at these towns, they knew what people did and that they were proud to do it” (Beda). The changing of the composition of the job market thus begs the question “how do you communicate your communal identity when the work once at the center of that identity is gone, and calling the local high school football team the ‘Walmart Greeters’ simply doesn’t have the same ring to it?” (Beda).

National Economic Burden

General poverty and rural poverty are problematic because they burden the entirety of the US economy. The economic costs of poverty include: a loss of productivity “that ultimately reduces the aggregate value of our economy” (Holzer), social welfare costs, justice system costs, and other costs.

Increased Regional and Societal Inequality

Beyond the economic impacts, it seems wrong that there could be such dire poverty concentrated in certain parts of the country. The US is a nation built among the pillars of equal opportunity “regardless of race, ethnicity, or family background” therefore “inequities associated with children growing up in poverty are troubling” (Holzer).


What are the Solutions to Rural Poverty?

According to Brian Thiede, Assistant Professor of Rural Sociology and Demography at Pennsylvania State University, the nonmetro- metro gap cannot be explained solely by factors impacting workers including education rates, job industries, and other factors that impact a laborer’s wages. In order to reduce the rural poverty there must be more “attention to the structure of rural economies and communities” (Thiede). These solutions are more difficult to determine, but general policies that are effective in reducing poverty include: conditional cash transfers (like the Earned Income Tax Credit) and  whole child policies (which focus on long-term child development).



2 thoughts on “The Economics of Hillbilly Elegy

  1. lokeefe18

    Great insight, Jenny. Your section on opioid abuse contains some startling statistics about its economic impact. As the opioid crisis continues to grow and affect far more than those living in Appalachia, its drain on productivity and local resources will be a difficult issue for cash-strapped urban and rural local governments. The newly formed White House Opiate Task Force led by Chris Christie seeks to tackle this growing epidemic, but in light of the recent health care cuts, it’s not clear if the much-stigmatized opioid crisis will be approached as the public health threat that it is. Although I would hope compassion in itself is enough for our elected officials to remedy this issue, the economic ramifications of the opioid crisis only further demonstrate the need for increased government intervention.

  2. petercampito15

    Great Article! I was just curious about the lack of education problem in Appalachia. Clearly having a college degree in this day in age is an integral piece to future income. However, is it a possibility that the Appalachia education system is so much weaker and less emphasized than the majority of the country because most of the jobs in the area are low skilled? I’m obviously uninformed about the Appalachia job market, but I just assume it’s an economy built off of coal mining and industry which generally requires no more than a high school diploma.


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