The Mississippi Delta is a region rich in culture but lacking in economic prosperity. With some of the highest poverty and unemployment rates in the nation, predominantly African-American communities are aiming to emerge from a tattered past.
Following the Civil War, African-American residents endured many economic hardships fueled by racism and segregation, including deteriorating infrastructure and scarce employment opportunities. Many migrated north to cities like Chicago and Detroit, which saw their African-American populations grow by approximately 40 percent between 1910 and 1930. During the second half of the 20th century, the increasing mechanization of agricultural labor and foreign competition for manufacturing jobs propelled a second wave of migration that has seen the total population of the Delta region fall by almost half since 1940, leaving vacant homes and abandoned businesses in its wake.
While farming and factory jobs have declined, service occupations that pay near-poverty wages have grown, targeting the nearly 18 percent of the adult population in the Delta that has less than a ninth-grade education. This has led to widening income disparities, not only between white and African-American Delta residents, but also between African-Americans in the Delta and those residing elsewhere in Mississippi. A report from the Task Force for the Revitalization of the Delta Region found that, in 2007, the median household income for African-Americans in the Delta was 23 percent lower than that of African-Americans in the rest of the state, an alarming testament to the degree of blight unique to the area.
In many respects, the Mississippi Delta is a regional example of how intersecting socioeconomic variables can erode entire communities. As a result, the area has become a focal point of community and economic development efforts.
While there exist countless proposals for what the Delta requires most to promote community recovery and progress, one particular resource for development lies in the anchor institution and its capacity to leverage jobs, wealth and community improvements. Anchor institutions are place-based entities with human and economic ties to their surrounding community. The institution and its community are naturally interdependent, as the welfare of one can have enduring consequences on the welfare of the other. For this reason, anchor institutions often utilize their economic and human resources to invest in the people, businesses and infrastructure that surround them.
Typically identified as a hospital or university, anchor institutions can also include large corporations, utility companies, and financial, cultural or religious institutions. Nationwide, universities and hospitals alone own assets in the trillions of dollars and spend billions. With such immense resources, anchor institutions maintain the capacity, incentive and—arguably—the responsibility to invest in job creation, business development, workforce training, infrastructure improvements and a multitude of other social and economic development strategies for their host communities.
In an effort to determine the impact of anchor institutions on communities in the Mississippi Delta, where a single employer can be a lifeline for an entire community, a mapping project was completed utilizing U.S. census data and Geographic Information Systems (GIS) software. With assistance from the Memphis Branch of the Federal Reserve Bank of St. Louis, 16 counties were identified as comprising the Mississippi Delta. These counties were then broken down into the 126 corresponding census tracts, and poverty and unemployment data from the 2011 American Community Survey 5-Year Estimates were matched to their tract.
A total of 14 anchor institutions were also selected based on their estimated contributions relative to the size of their host communities. Variables such as clients served, workers employed and financial investments in the community were all considered and weighted against the total population of the surrounding area. Having established the research area, collected the necessary data and identified the qualifying institutions, this information was joined using GIS software. Two maps were produced, illustrating poverty and unemployment rates in Mississippi Delta census tracts and how these indicators corresponded to the locations of anchor institutions. (See Figures 1 and 2.)
When the data from the 14 census tracts that included an anchor institution is averaged against the 112 tracts that did not, no significant difference was found when accounting for margins of error. The average poverty rate for census tracts that hosted an anchor institution was 27.7 percent, compared to 26.9 percent for tracts without a major employer. Similarly, the average unemployment rate for host tracts was 15.1 percent, compared to 14.6 percent for tracts that did not include an anchor institution.
Why might the success of anchor institutions in the Delta pale in comparison to other areas? While by no means a holistic representation of the obstacles facing Delta communities, the results from this research could be a testament to the longstanding, chronic socioeconomic challenges that have become synonymous with the region. These outcomes offer an opportunity for community development professionals to explore and harness the potential of anchor institutions to leverage jobs and wealth, and to promote recovery and progress in struggling communities. Despite the results from this study, one hypothesis is that the data would reveal an even poorer outlook if the institutions identified for this project did not exist. While further research is necessary to determine possible mediating variables, the ways in which an anchor institution engages a community and whether or not it carries a defined “anchor mission” is potentially where discrepancies like the ones illustrated in this research can arise.
Nevertheless, community development professionals in the Mississippi Delta could familiarize themselves with these establishments and actively pursue these resources. An opportunity exists for anchor institutions and community advocates to work together to take the necessary steps to transform their communities for the better. How available resources are leveraged during times of austerity is critical to meeting community and economic improvement goals, and collaboration with anchor institutions can provide a cornerstone to this endeavor, especially in rural America.
For the small towns of the Mississippi Delta and countless others across the United States, an anchor institution can often be the single indispensable factor necessary for the continued existence of an entire community. With the welfare of so many dependent upon these establishments, it is important not to underestimate the potential they have to impact the Delta.
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Fed in Print: An index of the economic research conducted by the Fed.
FedCommunities.org is a portal to community development resources from all 12 Federal Reserve Banks and the Federal Reserve Board of Governors.