By rights, Scott County, a rural Indiana community of 24,000, should be flourishing. It’s in a pro-business state. It’s part of the large, successful 1.2 million-person Louisville, Kentucky, metro area that’s been growing total jobs (75,300, or 12.9 percent) and manufacturing positions (19,600, or 31.6 percent) in the last five years. Scott County is an easy half-hour commute from downtown Louisville.

Yet for years, Scott has struggled with severe economic and social challenges. Changes to the economy from automation and globalization eliminated many jobs and sent employers elsewhere. The Great Recession made things worse. The county is also grappling with a major public-health crisis, driven by drugs and HIV. It made national headlines in 2016 after recording 203 new cases of HIV in only about a year and a half. National media—NPR, the Wall Street Journal, and the New York Times—swooped in to cover the story. The HIV outbreak resulted from needle-sharing among drug addicts, particularly to inject the prescription opioid Opana.

Last November, Donald Trump, who stressed economic stagnation and the drug crisis during his campaign, won two-thirds of the vote in Scott—a substantial improvement on Mitt Romney’s 52 percent take in 2012 and even more impressive in a county that often votes Democratic in state and local elections. Thus, Scott makes a good case study for understanding the working-class dynamics that drove Trump to victory—and what prospects these places have for renewal.

Located about 30 miles north of the Ohio River, along I-65 between Indianapolis and Louisville, Scott dates its origins to 1820, when the young state of Indiana created it from portions of five other counties. Southern Scott County includes a section of the original land grant that Virginia gave to George Rogers Clark and his men for their service in capturing what became the Northwest Territory from the British during the Revolutionary War. Lexington, one of the towns originally considered for Indiana’s first capital, became the county seat. The county jail briefly held members of the infamous Reno Gang, perpetrators of the nation’s first train robbery, after the Pinkerton Detective Agency captured them. Throughout the nineteenth century, Scott remained small, with the principal excitement being frequent debates and litigation involving moving the county seat to a more central location. Ultimately, the county seat did move, to land adjacent to Centerville, along the Jeffersonville Railroad. This became Scottsburg, today the county’s largest municipality, with 6,700 people.

Agriculture anchored Scott’s economy. The area’s plentiful produce attracted several canning companies, especially in the northern part of the county, where Austin became a quasi-company town for Morgan Foods, founded there in 1899 and still family-controlled and operating in the city today. Morgan remains a major employer, with workers making private-label soups and other products.

Scott County was never especially prosperous and suffered repeated economic reversals. Agriculture has always been a high-risk affair. In the postwar years, automation and improved efficiency dramatically reduced local farm employment. Farmers had once worried about keeping their children on the farm after they finished school—but by the 1950s, that concern was obsolete, since there were fewer farming jobs for them to come back to. Economic changes affected other areas, too. In the early days of the car, Scott’s economy flourished along the US 31 corridor, but the construction of I-65 in the late 1950s transformed everything. William Graham, a Republican who has served as Scottsburg’s mayor since 1988, worked originally as a civil engineer and spent a decade helping build the interstate system. He says that within five years of I-65’s opening, half the businesses that had lined US 31 through town were gone; within ten years, 90 percent of them had closed. Yet it took about 20 years for the interstate interchange to develop as a commercial location.

The community took another blow in the 1980s, when Public Service Indiana canceled its Marble Hill nuclear power-plant project in adjacent Jefferson County. The move, made in the aftermath of the Three Mile Island accident, ended construction after $2.5 billion had already been spent—the costliest U.S. nuclear power-plant project ever abandoned. Many Scott County residents had worked on it. Graham believes that as much as a quarter of the community wound up unemployed as a result.

Like many working-class communities, then, Scott County was no stranger to economic hardship—and the Great Recession delivered more of it. The local American Steel plant, which made steel cords for tires, closed. Auto-parts supplier Freudenberg-NOK also shuttered, moving its jobs to Mexico. In 2009, Scott County unemployment soared into double digits and stayed there for four years, peaking at 15.3 percent in 2010.

The county has since rebounded somewhat. Unemployment declined sharply, to 4.8 percent in 2016; jobs are up 16.1 percent in the last five years. But the jobless rate has dropped so substantially partly because Scott’s labor force has declined by more than 800 people, or 7 percent, since peaking in 2006. And Scott County’s per-capita income of $34,400 is only 82.1 percent of the statewide average and 71.6 percent of the national average.

Economic woes are only part of the gloomy picture. Scott County is also reeling from a drugs and HIV crisis, fueled by the increasing availability of hard drugs. As Indiana State Health Commissioner Dr. Jerome Adams puts it, whereas people once self-medicated with moonshine, now they use drugs such as Opana.

Changes in medical-industry practices and government policy played an important role in making such drugs more widely available. Until the 1990s, the prescribing of pain medication had been tightly regulated, but that changed as pain management became a key medical goal. In 1996, the American Pain Society declared pain “the fifth vital sign.” The federal standard hospital-patient satisfaction survey asked patients questions, including: “How well was your pain controlled?” And: “How often did the hospital staff do everything they could to help you with your pain?”

“Only 12.2 percent of the population holds a bachelor’s degree or higher—and that’s up from just 7.3 percent in 2000.”

The result was a major rise in the quantity of opioid pain prescriptions. Indiana is one of only a few states averaging more than one opioid prescription per resident per year. “Before, you wouldn’t give anyone any Vicodin for a dental procedure,” observes Adams. “Now we’re sending them home with 90 Vicodin. The patient takes nine, leaving 81 in the bottle in the medicine cabinet.” As a consequence, he says, “It’s actually harder [for minors] to get alcohol than it is to get pills in the community.”

Another problem is family dysfunction. Previous eras of economic hardship took place against the backdrop of a largely intact social structure and stable homes. Divorce and out-of-wedlock births are now far more widespread. As recently as 1990, only about 20 percent of Scott County births were out of wedlock. By 2002, this figure had doubled to more than 40 percent. The causes and effects of these shifts are subject to debate, but it is indisputable that legal reforms facilitated divorce and changing social mores dramatically reduced the stigma associated with out-of-wedlock births. Americans broadly want divorce and even single motherhood to remain socially acceptable choices—yet these behaviors are associated with poor life outcomes.

Scott County and places like it are dealing with the fallout. Conditions in the county now sometimes resemble stereotypes of the inner city, where parents are unfit or unable to raise their own kids. Graham observes: “One of the biggest changes is grandparents raising grandchildren, where you used to never see that—never.” These social changes occurred nationally but have hit communities like Scott hardest, leaving a sizable segment of the eligible population unemployable, regardless of how many jobs might be available. The problem in many working-class American communities today is as much social as economic.

But even if they stay off drugs and graduate high school, people in these kinds of communities still face employment hurdles. Today’s jobs require increasingly sophisticated skills, but, like many rural communities, Scott County has low rates of college-degree attainment. Only 12.2 percent of the population holds a bachelor’s degree or higher—and that’s up from just 7.3 percent in 2000. Even many blue-collar jobs—from welding to computer-drive manufacturing—now require significant postsecondary-school training. The skill shortage limits access to jobs, both locally and regionally, and poses an obstacle to business recruitment.

Taken together, the employment crisis and the social dysfunction produce a sense of malaise in some places. People almost always wave, smile, and say hello in small-town Indiana; but in Austin, for instance, only one person I saw even acknowledged my presence while I drove around. The rest just shambled about with blank stares. One local assured me that had my wife not been with me in the car, prostitutes would surely have approached me, soliciting for money to buy drugs. Scottsburg looks much better, with a healthy business district centered on its interstate interchange, but it, too, has troubles, such as significant retail-storefront vacancy on its courthouse square.

The difficulties of communities like Scott are all the more striking, considering the region’s economic strengths. Scott is part of the federally defined Louisville metro area. The inclusion of rural areas within metro regions is not unusual. America’s metro areas are defined by commuting patterns, and they include large rural zones. To say that America is a metropolitan nation—86 percent of the country lives in metro areas—doesn’t mean that it all looks like Chicago or New York. Most of the metropolitan population is in suburban and even rural areas, and many rural areas, like Scott, are within easy commuting distance of a city. In Scott’s case, that city is the center of a bustling regional economy that is home to major corporations like Brown-Forman, Humana, and Yum! Foods (parent company of Kentucky Fried Chicken, Pizza Hut, and Taco Bell). In the last five years, the Louisville metro area added 75,300 jobs—a growth rate of 12.9 percent. Manufacturing grew 31.6 percent, adding 19,600 jobs. Ford maintains a major auto-assembly plant there, and General Electric still manufactures appliances in the city. Louisville is also the site of UPS’s primary global air hub. The shipping firm employs more than 20,000 people and supports a major distribution infrastructure.

The state of Indiana is economically strong, too, enjoying a budget surplus—with savings equivalent to 14 percent of the state’s annual budget—and an AAA credit rating. It has the eighth-best business-tax climate in the nation, according to the Tax Foundation. It’s a right-to-work state that has implemented nearly the full panoply of state-level conservative best practices for boosting business, and it has seen solid results in many places. But smaller, working-class communities without assets like a university have continued to struggle. Even within thriving Indianapolis, working-class neighborhoods and less educated residents have also lagged behind. These results pose a philosophical challenge for conservatives, who have typically assumed that economic prosperity will follow from implementing such business-friendly policies. For Indiana, a favorable tax and regulatory climate may be a virtue, but it hasn’t been sufficient to help everyone.

Other factors have played a role in making places like Scott County especially vulnerable to pathology and stagnation. Scott was always a more hardscrabble place than some surrounding areas. One suggestive way to compare small towns is to look at their infrastructure, especially the existence of sidewalks and the quality of the houses. More historically prosperous small towns often have sidewalks through much of the city. Sidewalks are scarce in Austin; in Scottsburg, they line the courthouse square but are otherwise not prevalent. In many surrounding towns, by contrast, sidewalks stretch throughout much of their historic areas. Nearby Seymour, hometown of John Mellencamp, doesn’t just have sidewalks but also alleys and landscaped medians in some sections. Similarly, Scottsburg and Austin boast fewer grand old Victorian houses than one often finds even in many small towns; instead, small workers’ cottages predominate.

Demographics are another drag on the county. Much of southern Indiana, like the Ohio River Valley in general, was heavily settled by German immigrants. To this day, 24 percent of the people in Clark County, to the immediate south, list their ancestry as German. To the immediate north, in Jackson County, that figure is nearly 29 percent; there’s even a Lutheran high school in Seymour. Scott County, by contrast, is only 15.6 percent German, being more Scotch-Irish-dominated. The area saw a heavy influx of Appalachian migration, with former residents of Hazard, Kentucky, flocking to Austin, in particular, drawn by jobs at Morgan Foods. Scott’s largest listed ethnicity, at 20 percent, is “American”—an appellation commonly used by the Scotch-Irish. Appalachia has long been known for its entrenched poverty and social dysfunction. The Centers for Disease Control recently released a list of counties at high risk for HIV and hepatitis C infections, and Appalachian areas were heavily represented. J. D. Vance’s best-selling book Hillbilly Elegy describes the tragic struggles of Appalachians in the modern world. Thus, communities like Scott County have a smaller reservoir of economic and social capital to recover from the big technological, economic, and social forces acting on them.

Still, for all its drawbacks, Scott County is working hard to improve its circumstances. The first priority was to address the HIV outbreak, and here, the state has played a vital part. The tight-knit Austin community had a long history of believing that it could solve its own problems, but the outbreak was too much to handle on its own. Even in this rural area, it turns out, many people didn’t drive or own a car, making effective treatment a struggle. So the state set up a “one-stop shop” in an Austin community center. The national media focused almost exclusively on the needle-sharing dimension. But the facility also provided HIV testing and treatment, addiction-recovery counseling, health-insurance enrollment, state identification cards, and birth certificates. The result: a dramatic decline in the rate of new infections. The drug crisis isn’t over, but tremendous progress has been made in stopping the spread of HIV.

The one-stop shop was created by then-governor Mike Pence’s executive order. Results suggest that it could be a model for how to deal with disease outbreaks in communities similar to Scott. Adopting it might be politically contentious in red states because it would involve spending more money to open field-office locations rather than relying on regional or countywide service centers; states have preferred service consolidation in rural areas, on efficiency grounds. But that old approach might not work anymore for deeply troubled communities.

Other developments offer hope on the addiction front. Medical and government officials are taking steps to reduce prescription opioid abuse. Last year, the American Medical Association recommended that the “pain is the fifth vital sign” concept be dropped. Washington is planning to eliminate the pain questions from the patient-satisfaction survey form. In March 2017, an FDA panel concluded that the benefits of Opana no longer outweighed the drug’s risks; the FDA is now considering whether to take regulatory action. This is just a start, though. The drug epidemic in America goes beyond Opana or OxyContin—it involves many illegal substances, including meth, fentanyl, and heroin. While reducing the scourge of legal-painkiller abuse is a worthy goal, stopping the flow of drugs like heroin will be much tougher.

Beyond fighting back against drugs and HIV, Scott County has also made a good start on retraining workers to help them find jobs and offering inducements to attract employers. The main effort on both counts is Scottsburg’s new $10 million Mid-America Science Park, financed half from stimulus funds and half from reserves in the local Tax Increment Financing district. Despite its own serious troubles, the county generously delayed the science park’s planned 2012 opening so that it could be used as a temporary high school after a tornado destroyed nearby (Clark County) Henryville’s building. Today the science park hosts training facilities for workers and high school students. IvyTech, Indiana’s community-college system, has opened a campus there.

Some training is employer-specific. For example, Jeffboat in nearby Jeffersonville, America’s largest inland shipbuilder, donated a special welding training machine to help people learn how to perform the extra-thick welds needed on the barges that it constructs. The science park’s goal is to become, in effect, an outsourced training department for employers—albeit one they don’t have to pay for. Mayor Graham tells local companies: “My goal is that if you need any training done, I’ll do it. You won’t have to do it.” This wouldn’t just be for new hires. “It’s also for our incumbent workers,” Graham says. “If they need to get their skills upgraded—and they do—they can come here and take some training.”

In a community that needs jobs, Graham’s can-do attitude is admirable. But it prompts the question: Why can’t companies do their own training, as they did before? The answer, in part, has to do with globalization. Businesses still manufacturing in the U.S. face such stiff competition from foreign firms that they often can’t afford to invest in workforce development. Nor can they always pay their workers much, which helps explain the low personal incomes in Scott County. (It’s notable that Jeffboat is protected from global competition by the notorious Jones Act, which requires domestic water transportation to be done using only American-made boats.) Scottsburg did lose one major employer, Freudenberg-NOK, to Mexico, but Graham is reluctant to blame trade deals like NAFTA. “I’m not sure that any of us here are qualified to say. I question it, but I’m not going to say it’s a bad thing.” Railing against trade may play well politically, but Graham would rather focus on what he can do with the tools available to him.

The outcome, so far, is encouraging. Globalization gave back some of what it took away when the Japanese firm Tokusen bought the shuttered wire plant and reopened it. Electronics firm Samtec merged two regional locations into one facility at the science park that will employ 300—a big jobs number in a community the size of Scott County.

These local business expansions are important because the purpose of Mid-America Science Park isn’t only training local workers for jobs but also attracting employers. Indiana local governments rely heavily on property taxes. The state’s tax-cap system limits single-family-home taxes to 1 percent of property value; commercial property is capped at 3 percent of value. This puts a premium on attracting commercial development. So the science park includes infrastructure targeted at business attraction, including generous meeting space, ultrahigh-quality videoconferencing capabilities, and rooms certified as secure enough for secret military-related teleconferences.

State and local government have had some success in adjusting to globalization and technology-driven disruption, but they’re weak actors in the face of broad economic forces. Only the federal government can hope to shape them fundamentally. Donald Trump was elected in part because he promised to change the status quo on globalization and the economy. The challenge will be reforming the system to help working-class communities without harming the aggregate economy. That’s not likely to be a simple task.

Even favorable federal policies will make little difference if communities like Scott can’t do something to address their crippling social problems—especially family breakdown, which enables all the others. Job openings go unfilled in communities with high proportions of drug addicts and dropouts. If changing economic conditions is hard, reversing negative social trends is even harder. A sense of humility about what can be accomplished is wise.

Scott County has made a good start on retraining workers to help them find jobs while offering inducements to attract employers. (MARK CORNELISON/KRT/NEWSCOM)
Scott County has made a good start on retraining workers to help them find jobs while offering inducements to attract employers. (MARK CORNELISON/KRT/NEWSCOM)

Does Scott County have a long-term future? “Give me two to three years,” says Scottsburg’s Graham, on his plans to improve the struggling downtown. One key area of focus in these localities is preserving historic downtown architecture, which even hardened urbanites love. Local leaders in Scott County understand the importance of these unique districts, not only to their community’s identity but also to the long-term viability of attracting and retaining residents. But they have little money to spend on such efforts. Overall, Graham is realistic but hopeful. “Do we have a terrible situation?” he asks, referring to the HIV outbreak. “We certainly do. We’re doing something about it.”

His confidence may seem unwarranted to outsiders, but Scott County does have a track record of coming through crises. It survived agricultural automation, the disruption of the interstate highway, the closure of Marble Hill, and other setbacks. More recently, when businesses threatened to leave over poor Internet quality in the early 2000s, small-town Scottsburg built one of America’s first wireless municipal broadband systems to provide web service after the local providers refused to upgrade the community’s capacity. And Scott County retains its significant geographic advantages.

While Scott and other working-class American communities may never be highly prosperous or glamorous, they might yet pull through this trial, as they have through others in the past. “What makes Scott County unique?” Adams asks. “My honest answer is: absolutely nothing. There are Scott Counties all throughout the country. All of the ingredients exist in many communities.” How Scott and its brethren fare will tell us a lot about America’s fate in the Trump years.

Top Photo: Scott County made national headlines for an HIV epidemic caused by needle-sharing among drug addicts. (AARON BORTON/THE NEW YORK TIMES/REDUX)


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next