The transformation of Northwest Arkansas may be the state’s most significant development in the last 100 years. Once a desperately poor region populated by hardscrabble mountain-dwellers when agriculture was the big business in Arkansas, it is now one of the fastest-growing areas in the country, fueled by a hub of home-grown Fortune 500 companies.
You can chart change there from your car by counting the number of new restaurants, retail outlets and posh residential developments under construction. Or you can look at the statistics.
Benton County, where most of the expansion is concentrated, has seen its population go from 97,499 in 1990 to 179,756 in 2004 — an increase of approximately 85 percent — with about 25,000 of those people added since 2000.
Even with such rapid population growth, the unemployment rate has stayed remarkably low. The latest figures show a 3.3 percent unemployment rate in the area, compared with 4.8 percent statewide and 5 percent nationally. From January 2000 through June 2005, an average of 520 jobs were created there each month.
But this positive news is actually helping to create a less visible but undeniable dark side to the growth in Northwest Arkansas. As with any gold rush, people are drawn to the area by visions of easy living, but not everyone finds a fortune in them thar hills.
Debbie Rambo tells the story of a man who moved to Rogers from Portland, Ore.
“This guy was a framer,” she said. “His wife was eight months pregnant, and they had three kids. He heard there were high-paying jobs in Northwest Arkansas, and they sold everything they had to get bus tickets, with great hope to get ahead.”
Finding a framing job was not as easy as he thought it would be, and eventually he found his way to Rambo, who runs the Samaritan Community Center in Rogers, a non-profit organization that offers everything from career counseling to hot meals.
“I deal with this two or three times a week,” Rambo said of people who come to the area and find less than what they expected.
She said the problem is more complicated than simply not having enough jobs for everyone. The cost of living is rising, making it difficult to house and feed a family on a blue-collar salary.
Indeed, a report released this year by the Arkansas Advocates for Children and Families placed Benton and Washington counties among the most expensive places in the state to raise children. The findings also showed that average wages in the region would not be sufficient to meet the basic needs of working families.
As a result, the poverty rate over the last decade has grown by as much as 130 percent in Rogers and 104 percent in Springdale.
At the same time, public services for the poor aren’t able to meet the increasing demand. In one example, as a result of a national funding freeze, the Northwest Arkansas office of the U.S. Department of Housing and Urban Development, which typically provides rent assistance, ran out of money after processing the applications it received through November 2003. It has not been able to accept any new applications since then, even as the need for its services grows exponentially.
“It was the difference between making it or not making it for people on minimum wage and single mothers,” Rambo said of the HUD assistance. “Housing is a huge factor in poverty.” Now she sees a substantial increase in people going homeless.
Her observation is substantiated by Barbara Whitlow, the office manager at the Salvation Army in Fayetteville, which provides one of the few homeless shelters in the region.
According to her records, already this year the Army facility has provided 22,192 nights of lodging to individuals, compared with 17,760 total nights in 2004. Similarly, it already has served 62,078 meals this year, up from 52,360 in 2004. The Salvation Army has operated in Fayetteville since 1983, but in 1998 it opened an even bigger shelter in Bentonville to meet the growing needs there.
“They come to this area because they hear about jobs,” Whitlow said. “They come here with nothing. By the time we see them, most have given up.”
If there is an irony in the Northwest Arkansas economy, it is this:
As local companies like Wal-Mart, Tyson Foods and J.B. Hunt became powerhouses during the 1990s, they expanded their operations and attracted suppliers that opened offices nearby. This influx of high-paying jobs led to growth in the service economy, because the white-collar executives expected amenities like dry cleaners, restaurants and high-end retail. (Two million square feet of new retail space is expected in the next 12 to 18 months in Rogers alone.)
There was also a need for manual labor to build new homes, offices and stores. But low-skill and service-sector jobs don’t pay much, and the cost of living continues to rise. So ultimately you have an economy creating a lot of jobs that keep workers at or below the poverty line.
“We have a lot of high-paying jobs, a lot that don’t pay enough, and not enough of the ones in between,” said Eric Samuels, program director at the Seven Hills Homeless Center in Fayetteville.
Debbie Guthrie has witnessed this phenomenon first-hand. Two-and-a-half years ago she started a food pantry at the Assembly of God church in Lowell. After seeing how many people needed her help, she quit her job to open another food pantry as well as a thrift store that funds it. She delivers food to residents all over the region, and she says she is struck by how poverty can exist side-by-side with great wealth.
“In our area you have J.B. Hunt, Tyson, Wal-Mart and major corporations bring in vendors, people who have money to start with,” Guthrie said. “The poor become more poor because things get more expensive around them.”
The arrival of large numbers of Hispanic immigrants has complicated matters, because many are willing to take low-paying jobs, which depresses average wages for everyone and adds to the overall poverty rate.
However, Jeff Collins, the director of the Center for Business and Economic Research at the University of Arkansas, points out that Northwest Arkansas was disadvantaged for a long time, and the recent growth can’t be expected to eradicate poverty overnight.
“There were a lot of poor people here before,” Collins said. That’s what is funny about this — this idea that in Northwest Arkansas the streets are paved with gold. The per capita income in Washington County is below the national average. It’s the same with Benton County, though it’s getting closer. The projections show it will take, at the current rate of growth, until 2036 to get to the national average.
“So is it a wealthy place? By Arkansas standards, yes. But Arkansas is still a poor state. Is it a wealthy place by national standards? No.”
With that in mind, the poor rural foundations of Northwest Arkansas have made it even more difficult for the region to deal with the problems that often accompany rapid economic growth. There were few programs in place to cushion the impact of change.
“We have pretty much been a rural area, but we have become an urban area quick,” said Jill Darling, president of United Way of Benton County. “We don’t have infrastructure like transit and housing.”
Indeed, the lack of public transportation and affordable housing throughout Northwest Arkansas creates yet another burden for low-wage workers.
“If you don’t have a car, you are out of luck,” said Rambo of the Samaritan Community Center. “The apartment complexes where people can afford to live are several miles from where they could work.” She adds that the only bus service in Rogers is available by appointment for the elderly and disabled.
Samuels said he worked with one man who was able to find a job in a fast-food restaurant there, but he could neither afford an apartment anywhere nearby nor the transportation he would need if he lived farther away.
“The lack of public transportation is an issue because of how fast we have grown,” Samuels said. “There are more high-paying jobs in the area, which has caused property values to go up. Houses are being built for people who make more money. There needs to be some kind of initiatives for affordable housing to be built.”
Darling agrees, but only to a point.
“As long as builders can build and sell expensive homes, they won’t build affordable houses,” she said. “You can’t force people to build low-income housing. The market drives that. There have to be non-profit agencies stepping up to the plate.”
In fact, most of the services in Northwest Arkansas for those in need are provided by small faith-based or non-profit organ-izations.
For instance, Samaritan has a $650,000 annual cash budget, most of which comes from the Fellowship Bible Church in Rogers as well as companies including Wal-Mart and its vendors. And that does not include $1.1 million worth of food donated by Tyson Foods and other sources.
The breadth of Samaritan’s activities underscores the extent of poverty in Northwest Arkansas. From Tuesday through Thursday it operates a soup kitchen that serves lunch to 75 to 125 people a day. The center also prepares food for 50 house-bound elderly residents who receive deliveries from the Rogers Meals on Wheels program. During the summer, volunteers pack and deliver hot meals to 92 children five days a week. They also send healthy snacks home during the school year for 400 “at-risk” students in the Rogers schools. (Fifty percent of Rogers schoolchildren are enrolled in the free/reduced lunch program.)
Samaritan also has a food pantry and counselors on hand to assist people who are barely subsisting, even if they have jobs. (Forty percent of adults receiving emergency food assistance are employed.)
“So many more people are coming in,” Rambo said. “Minimum wage is not enough to sustain them. They work at Wal-Mart and have to have help.”
Scott Van Laningham, executive director of the Northwest Arkansas Regional Airport and vice chairman of the Northwest Arkansas Council (an association of regional business and civic leaders), acknowledges the imbalances that have come with economic growth, but he believes they will be corrected as time passes.
“Unfortunately it is a natural progression in the economic model,” he said. “As we bring in more and more higher-income folks into the region, there is more disparity. Over time that will pull the entire wage rate up . . . but it is taking more time than we would like.”
Van Laningham says that he is hearing that economic projections show that “the next five years are looking a whole lot like the last five years” in terms of the rate of economic growth in Northwest Arkansas.
But is such growth sustainable without substantial wage increases for the working poor and significant investments in public transportation and affordable housing? With state and federal assistance programs already strained, it is hard to imagine that community non-profit organizations can meet even a small portion of the total needs.
“When people think of poor people in Arkansas, they think of the Delta,” Rambo said. “And yes, there are higher percentages of poor people there because the population is low. But in pure numbers, Northwest Arkansas has more. And in 10 years, Benton County will be number one.”
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