Construction of Nashville Yards

Sandy Mazza | The Tennessean

This trend is a reversal from the prosperity rural and small towns experienced in the early 2000s.

As Nashville takes the lion's share of the economic recovery, many rural towns have been left behind.

Since the recession, the Nashville area drew about 100K more new jobs than the state's six other metro regions combined.

The picturesque northern Tennessee town of Red Boiling Springs, founded as a health resort for its natural mineral baths, prospered as a manufacturing hub after tourists stopped flocking there in the 1960s.

But now it’s one of the state’s many rural areas confronting rising poverty rates and declining populations.

As the Nashville region has enjoyed an unprecedented boom, rural areas have languished in the decade since the recession.

Other Tennessee cities have also trailed far behind Music City’s economic rise.

The Nashville area drew about 100,000 more new jobs than the state's six other metro regions combined since the recession, according to a Zillow analysis of Bureau of Labor Statistics data.

With a thriving job market luring an average of 83 new residents a day, housing values have skyrocketed in Nashville far beyond even their pre-recession high.

The city outpaced national housing price growth by 17.4%, according to data from Zillow. No other Tennessee region has seen housing values grow faster than the national average.

The widening economic divide between rural and urban areas is a nationwide phenomenon as companies have flocked to cities with highly educated talent pools during this longest recorded economic expansion in U.S. history.

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But Tennessee is unique in that only one city has taken the lion's share of economic development.

"I think it really is a case of the rich getting richer in terms of growing, wealthy job centers attracting more jobs," said Zillow economist Jeff Tucker. "In Tennessee, it's a really stark divide between the leading city and pretty much the rest of the state."

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Tourism replacing manufacturing

The closure of OshKosh B'Gosh's Red Boiling Springs sewing factory in 1996 heralded the end of an era of plentiful high-paying factory jobs in the village community built around Salt Lick Creek.

Three other OshKosh plants in neighboring Clay County shut down at about the same time.

Today, more than half of Red Boiling Springs households and one in five Clay County residents live in poverty.

From 2010 to 2017, Clay County's population dropped by 450 households, according to United Way's ALICE report, which studies groups living in poverty.

"In-state migration from rural to urban areas is dramatic," said Murat Arik, director of Middle Tennessee State University's Business and Economic Research Center. "Unless you do something for those rural counties, (residents) are just going to simply pack their bags and move to (cities), especially Nashville."

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Nashville's construction cranes

One of the last major employers in Red Boiling Springs, Nestle Waters, shut down its bottling plant last December.

The news came a month after Nashville cheered the arrival of its single-largest jobs announcement ever: a 5,000-employee Amazon operations hub.

Tourism industry jobs, centered in Nashville, have gradually supplanted manufacturing jobs across Tennessee, according to Zillow research.

In 2005, the state was home to about 57% more employees working in manufacturing than in leisure and hospitality. Today, the two industries employ equal numbers of Tennesseans.

"The rural parts of the state right now are facing a major skills and education challenge," Arik said. "We have some of the worst counties in the nation, in terms of growth and overall prosperity, in Tennessee. Think about losing a nice $80,000 manufacturing job and all you have are $9-an-hour service jobs."

'It can seem like a vicious cycle'

Since the Great Recession ended, the Nashville metropolitan area has added about 290,000 new jobs, according to a Zillow analysis of U.S. jobs data.

Nashville-area home values have jumped more than 80% overall, adding $67 billion in value to the housing market, Zillow found.

Memphis won the second-largest share, adding 62,500 jobs. Knoxville and Chattanooga followed with 50,300 and 37,900 new jobs, respectively.

The expansion in Nashville has brought skyrocketing housing values and decreasing poverty levels across Middle Tennessee.

Nationally, large cities including Denver, Seattle, Phoenix and Tampa are capturing most of the economic growth.

The 25 largest U.S. job markets won more than half of the post-recession job growth and almost two-thirds the country's overall increases in home values, according to Zillow.

Larry McCormack / The Tennessean

This trend is a reversal from the prosperity rural and small towns experienced in the early 2000s.

"I think this is just a really strong example of agglomeration economies where most companies and jobs benefit from being around other growing companies," Tucker said. "From a hiring perspective, it's advantageous to site offices in places where you know employees are doing similar work. It definitely creates this self-reinforcing cycle. But, if you don't have that underway, the continued absence of it can seem like a vicious cycle."

Tennessee has several programs devoted to assisting its 39 economically "distressed" and "at-risk" counties.

The most impactful is its rural broadband initiative to fund infrastructure for high-speed internet, said Tennessee Department of Economic and Community Development Commissioner Bob Rolfe.

"In Nashville, we take it for granted. But, unfortunately, most rural parts of the state don't have broadband access," Rolfe said. "So how does a student who would not have broadband access learn? It's used in every curriculum in every classroom."

In the past two years, the state has brought broadband to 13,500 rural homes and businesses. There are plans to "light up" another 10,000 to 12,000 this year, Rolfe said.

The state is also helping prepare abandoned manufacturing and industrial sites to be ready for new businesses to quickly take over.

"In 2013, the state had 26 distressed counties and today we have 15," Rolfe said. "In 2014, we had 34 at-risk counties. Today we are down to 24. That would tell us we're having success. But it is slow."