Despite the growth in services, manufacturing remains an essential part of the nonmetropolitan South's economy, responsible for 25 percent of total personal earnings. But low-education nonmetropolitan areas, which gained more than their share of manufacturing jobs in the 1970s and 1980s, lost jobs in the 1990s. Their manufacturing base is threatened not only by low-wage competition from abroad, but also by the spread of new technologies, which is raising the demand for production worker skills. Data from the Economic Research Service Rural Manufacturing Survey (RMS) show that labor quality is a central problem for adopters, particularly in low-education areas. The silver cloud is that these "New Technology" manufacturers have a much greater interest in raising local education and skill levels than "Old Technology" manufacturers.

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