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John D. Abell: Lynchburg’s economy was beginning to really take off in 2019. Then 2020 happened.
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John D. Abell: Lynchburg’s economy was beginning to really take off in 2019. Then 2020 happened.

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Lynchburg Skyline (copy)

The downtown Lynchburg skyline as seen from Point of Honor on the evening of July 28, 2020.

It would be entirely understandable if you overlooked the fact that in 2019, Lynchburg’s economy had a relatively good year. Much of the data on which such assessments are based come from the U.S. Census, but the release of 2019 data didn’t occur until mid-December 2020. At that time, you’ll recall, our attentions were focused on political recriminations, COVID-19, and recession.

You may be aware that Lynchburg’s poverty rate (using 5-year estimates from the U.S. Census) had been stuck above 20 percent ever since the Great Recession (2008-2009), reaching as high as 25 percent in 2014. In 2019, after five years of steady declines it finally dropped below 20 percent (19.5 percent to be exact). Median household income increased to $46,409 in 2019 with Black households for the first time experiencing the bulk of those gains. As a result, Black incomes as a percentage of White incomes increased from only 53.9 percent to 62.6 percent in a single year!

When I said that Lynchburg had a relatively good year, it is because there were measures of well-being suggesting that our work at fighting poverty and inequality are not yet over. Consider first, the reduction in income inequality (from 53.9 to 62.6 percent) just mentioned. While this is absolutely an encouraging outcome, let’s think about what that really means, as it is easy to get lost in percentages. White median household income was $54,197; for Blacks it was only $33,953. That is greater than a $20,000 difference! That is not inconsequential! Think of the contribution to Lynchburg’s economy if Black households had an extra $20,000 per year to spend. One year, that might represent sending a son or daughter to college. The next year, it might represent a new car. In other years, it might mean starting a new business, a home remodeling job, meals out at local restaurants, and so on.

Lynchburg’s poverty rate of 19.5 percent still exceeds that of other Virginia cities by nearly five percentage points. Even with the improved Black income in 2019, Black poverty exceeds White poverty by nearly 10 percentage points (26.1 to 16.2 percent). Black youth poverty exceeds White youth poverty by near four times (40.0 to 11.1 percent). In Lynchburg’s urban core, the part of the city that experienced red and yellow lining in the 1930s at the hands of the federal government (Home Owner’s Loan Corporation), (see Abell, “Redlining in Lynchburg,” The News & Advance, April 8, 2018), meaning that home loans or home improvement loans were likely to be denied, Black youth poverty exceeds White youth poverty by more than 35 percentage points (57.9 percent to 22.2 percent). Even in a world of improving poverty, those statistics suggest some persistent inequality with which we need to contend.

In 2019, assessed home values in the urban core averaged only $68,876. By comparison, in Boonsboro, an area of the city that received blue and green lining on HOLC’s security maps of the 1930s (where, and I quote, “the best people” lived, and where home loans or home improvement loans were likely to be approved), assessed values averaged $267,804. Blacks, in general, have a homeownership rate of less than 40 percent, and for those living in the urban core especially, they are missing out on a key source of wealth building.

Turning to 2020… we all know this was a bad year. The question is, to what extent will the good economic outcomes of 2019 be undone by all that occurred in 2020? Bureau of Labor Statistics data give us an early look. Their statistics lag only by about six months; thus, we have employment-related data for 2020 at this point. Lynchburg lost 3,457 jobs in 2020. When you take the 5,147 jobs that were lost during the Great Recession, and the fact that during the recovery only 2,100 of those jobs were recouped, Lynchburg is looking at net job losses since 2008 of 6,504. That will continue to be a source of drag on the economy.

One other indicator of what may lie ahead when the Census numbers come out in December 2021 is Lynchburg’s SNAP (Supplemental Nutrition Assistance Program) participation. This data is available with essentially no lag. After six years of decline from the 2013 peak (following the Great Recession), Lynchburg experienced an increase of 788 SNAP participants in 2020 (taking the total to 11,257). We’re back to where we were in 2017.

As I said, Lynchburg had a relatively good 2019. It was welcome relief to see poverty finally dip below 20 percent and to see Black incomes rise sharply. The employment and SNAP numbers, however, give us pause to wonder how many of the gains will be eroded. Job losses and more people on public assistance may make it difficult to make inroads into the inequality that still exists.

John D. Abell is the Carl Stern Professor of Economics at Randolph College.

When I said that Lynchburg had a relatively good year, it is because there were measures of well-being suggesting that our work at fighting poverty and inequality are not yet over. 

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