An interesting article by Reid Wilson had an update on population demographics and the news is a bit glum since it reports that rural areas of the United States have had a decline in population for the first time in census history.
The number of Americans who live in rural areas declined in the last decade, the first time in history that the nation’s rural population dropped between one U.S. census and the next.
The Hill
In Demographics: Farmers, Boomers, and Business, we outlined the projected shortage in farm and rural workers over the next decade and this new report confirms what we had already projected would happen last year. The article questions whether this is a temporary phenomenon or a long term one and we think it is the latter. Why?
We think the trend to migrate to cities will largely be driven by inflation. As the cost of goods and services explode due to labor shortages and supply chain reconfigurations around the world and higher energy prices, it will be nearly impossible for rural areas to support living wages.
In recent news, Target announced it was planning on raising minimum wage to $24/hour in some areas. Why work in a rural setting earning minimum wage or slightly higher doing extremely difficult farm work when you can work at a Target store and score twice or three times the wage working in a climate controlled store stocking shelves or checking out customers?
With the current Russian-Ukraine conflict and the cut off of all Russian agricultural commodities, rural farmers and areas may have a slight reprieve over the next few years but we don’t think that it will last long.
It is always possible that government may incentivize people to move to rural areas to help work on farms but it may not be enough.
The best thing to do is to plan accordingly for the future and invest in companies that are positioned to address these problems. Stay tuned and stay solvent….