Jobs return to rural South. But educated work force holds key to sustained growth

Yes, Virginia - and Georgia, the Carolinas, even Mississippi - there is life after factories in the poor rural South. Even if, not long ago, progress seemed to be going the way of the mule plow, in fact the small-town, country-crossroads, cracker-barrel South has been growing faster than the national average.

A new study coming out by the Southern Growth Policies Board - the very group that set the alarms sounding in 1985 with a dire report called ``After the Factories'' - finds the region's demise somewhat exaggerated.

A barrage of reports since 1985 has called attention to the ``shadows in the Sunbelt'' - the withering economies of the rural South, already the poorest, least educated region of the country. Rural areas withered despite the gleaming prosperity of cities such as Atlanta; Charlotte, N.C.; Nashville, Tenn.; and Orlando, Fla.

The message was that the century-old ``New South'' strategy of economic development by attracting Northern branch-plant factories with cheap, nonunion labor would no longer work. Instead, rural leaders needed to invest in educating their work forces and to encourage homegrown enterprises.

But those studies charted patterns that stopped in 1982, the nadir of a deep national recession.

The new report finds that from 1977 to 1984, the non-metropolitan South grew nearly double the national average in employment. The whole region only looked slow compared to the metropolitan South, which grew still 80 percent faster.

Even manufacturing industries bounced back. Many of the jobs lost through 1982, and feared gone for good, came back during the next two years. Further, they tended to return to their traditional homes - remote counties with a low-wage, little-schooled, nonunion work force.

Few, however, see a return to old ways in the South. For one thing, the growth is spotty. It is concentrated in the eastern part of the region, while Mississippi, Louisiana, Arkansas, and Kentucky still largely languish.

The manufacturing jobs, moreover, are not so promising. The low-wage jobs came back largely because of a weak dollar in recent years, but they are still tenuous, says Edward Bergman, a professor of city and regional planning at the University of North Carolina at Chapel Hill.

The dynamic industries, such as textiles, where business has invested massively in automation in the 1980s, are requiring fewer, better-educated workers.

The main lesson of the bleaker reports still holds, says George Autry, president of MDC Inc. in Chapel Hill, N.C., which produced ``Shadows in the Sunbelt'':

``Human infrastructure is more important than the highways were a long time ago. There is a closer correlation every year between education and prosperity.''

This is no secret in the rural South. The urgency of economic change is bringing forward a new generation of leaders, says Vaughn Grisham, a sociologist at the University of Mississippi. ``There is an excitement all over the South in places not seeing anything like prosperity.''

The new models are cities like Tupelo, Miss. For decades, Tupelo has pursued a strategy of educating its work force and diversifying its economy into service industries. In the 1930s, it was the poorest city in the country by various measures. Now, the town of 24,000 has more than 90 industries, including branches of 17 Fortune 500 companies.

Since the dire reports the 1980s, Dr. Grisham is getting calls from all over the South from civic leaders wanting to know how Tupelo did it.