The Lancaster, Pa., Puzzle : The Indicator from Planet Money A heavily rural county with a big manufacturing base and a low share of college graduates has found a way to thrive.

The Lancaster, Pa., Puzzle

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Hey, everyone. It's Stacey and Cardiff. And this is THE INDICATOR FROM PLANET MONEY. Today on the show, we are shining a spotlight on Lancaster County, Pa. We visited the county a couple of months ago because it represents this kind of economic puzzle. It is a heavily rural county with a lot of manufacturing jobs and a very low share of college-educated workers. These are economic traits that have been devastating to the economies of other similar counties, including a lot of other counties in Pennsylvania itself.


And yet, Lancaster County's doing great. It's thriving. Why is that? What makes its economy special? Well, to find out, we took a drive through the county with an economist who lives there - an economist who happens to specialize in the very trends that have kept Lancaster's economy resilient.

On a recent Tuesday morning, THE INDICATOR team was driving through Lancaster County, Pa., with Adam Ozimek, an economist who lives there.

These houses are nice, by the way, man. The Falls at Olde Mill, the State Road - these are beautiful houses.

ADAM OZIMEK: I'm sorry. This is too early - left and back to that road.

GARCIA: Can I go right here to where we're going?

OZIMEK: You can just (unintelligible).

GARCIA: Yeah, OK, so we took a few wrong turns. It's fine. Yeah.

VANEK SMITH: That's some quality driving there, Cardiff.

GARCIA: And after passing through some leafy suburbs similar to the one that Adam grew up in, we stopped to check out the Mennonite Historical Society, which has exhibits about the county's famous Amish and Mennonite past.

OZIMEK: So this is kind of an exciting spot right here because you have, like, outlet shopping right here. But, like, right there - like, if you just go, like, 200 yards - you've got farms. Like, it's - it gets extremely rural extremely fast.

VANEK SMITH: Outlet shopping and farms.

GARCIA: It was exciting.

VANEK SMITH: That is exciting.

Lancaster County has this kind of unique topography. It is a rural county that is about a two-hour drive west of Philadelphia. It has 540,000 residents, and it's probably best known for its big Amish community and its sprawling farms where, yes, if you are driving along one of the highways, you will often spot Amish people and horse buggies.

GARCIA: Yeah. But here are two economic facts about Lancaster County, the start of our economic puzzle. First, it has a big base of manufacturing jobs. Three decades ago, more than 30% of the jobs in the county were in manufacturing. And then two decades ago, those jobs started disappearing, just like in other parts of the country. The jobs were either outsourced to countries overseas or replaced by machines. But even now, 15% of all jobs in Lancaster are still in manufacturing, and that's almost double the percentage for the United States as a whole.

And here's the second fact - the county has a much smaller share of college-educated adults than the rest of the country does.

VANEK SMITH: And if you look at so many other cities and towns and counties in the U.S. with these same economic characteristics, they have suffered brutally in the last few decades, as the lost manufacturing jobs often were not replaced by really good new jobs in other industries. And so those communities ended up getting kind of hollowed out. But Lancaster County has avoided that fate.

GARCIA: Yeah, exactly. That is the puzzle. Lancaster County is doing great. The county's households make more money than people in the rest of the U.S. A higher share of the adults in the county have jobs than in the rest of the U.S. And an index published earlier this year by the research company Gallup found that Lancaster County ranks eighth out of 156 U.S. counties that it surveyed for the well-being of its residents, and that includes things like good career paths, social lives and the health of those residents.

OZIMEK: And you can see the way that the strong economy sort of translates into overall quality of living is there, too. So the average life expectancy in Lancaster is higher, as well.

VANEK SMITH: So how did Lancaster County pull this off? Part of the answer is that there are other industries that have helped to cushion the blow of lost manufacturing jobs. For instance, two-thirds of the land in the county is farmland. So there's a lot of agriculture, like cattle and poultry and eggs.

GARCIA: Plus, the county includes dozens of small towns and villages with quirky names like Paradise, Mount Joy or, my personal favorite, Bird-in-Hand, Pa. And they are themselves tourist attractions, with architecture sometimes dating back hundreds of years to when German settlers first moved to the area.

VANEK SMITH: And then there is Lancaster City, which is by far the biggest and actually the only city in Lancaster County. The city has about 60,000 residents. So only about 11% of the people who live in the county live in the city.

GARCIA: But as we drove into the city from the suburbs, Adam explained that the city has an important economic relationship with the rest of the county, one that is still kind of evolving.

VANEK SMITH: Back in the '80s and '90s, when Adam was growing up in the Lancaster suburbs outside of the city, he remembers that the city itself had a lot of crime. And it also just, like, wasn't a place you wanted to go. In fact, he can only remember going there for two reasons throughout his entire childhood. One was to go to the eye doctor. And the other...

OZIMEK: I saw "Titanic" at the downtown movie theater, which doesn't exist anymore.

GARCIA: I mean, you had to, right?

VANEK SMITH: I'm the king of the world. Yes, you did. Yes, you had to.

GARCIA: But Lancaster City has been revitalized since then. Local business leaders and local politicians have taken steps to attract investment in new businesses, to lower crime, to restore and replace crumbling buildings. And now it has boutique stores, gourmet coffee shops and - we can confirm this firsthand - a fantastic ethnic dining scene.

VANEK SMITH: It's important to do that legwork reporting.


OZIMEK: Now people come downtown to shop. They come downtown to go out to eat. It's become, like, a - sort of a magnet draw.

VANEK SMITH: Adam says all this varied economic activity - tourism, retail, restaurants, construction, agriculture - is made possible by a powerful trend that exists in Lancaster County - population growth. That's the key to this puzzle. The size of Lancaster County's population has been growing steadily for decades, which is the exact opposite of what's happening in most Pennsylvania counties and also about half of the counties in the U.S. whose populations have been falling, especially rural counties.

OZIMEK: To think about becoming an entrepreneur in that environment is really tough because you just know you're going to have less customers every year.

VANEK SMITH: When a city or a county has a falling population, that usually means it will have a weak, less vibrant economy because it means there aren't just fewer customers, but there are also fewer workers for businesses to hire. So fewer businesses get started. It also means the local government will collect fewer tax dollars, which could be spent on infrastructure, teachers, police officers, social programs, pensions. This makes a place less attractive. So then even more people leave, and it creates a kind of downward spiral.

GARCIA: Adam says Lancaster County has had the opposite spiral - an upward spiral. A rising population has given the economy a boost, which itself disincentivizes the people who already live there from leaving it, and it brings in new businesses. A good example - the tech entrepreneur Kyle Sollenberger founded the Passenger Coffee shop in Lancaster City where, coincidentally, we had just stopped. Adam explains.

OZIMEK: So right now, we're on the east end of the city. And actually, the coffee shop that we were at earlier - they roast their own coffee, and they sell the beans to other coffee shops. And it was started by a local entrepreneur and then an entrepreneur who went to Silicon Valley, founded a few startups, sold those startups and sort of moved back here to do great stuff with the money he made out there. And he's been starting businesses, and he's not the only person who I've seen do that, as well.

VANEK SMITH: And there are a couple of reasons that Lancaster's population has continued to climb. First, its families have a lot of kids, which is enough to outpace the number of people who pass away, who die.

GARCIA: Not to be crude about it.

OZIMEK: Yeah, so there's a high birth rate in Lancaster for sure. And I think that that is partly due to sort of the Mennonite roots around here - is that, you know, people have bigger families here.

GARCIA: And second, immigration - Lancaster County and especially Lancaster City have a reputation for being welcoming to immigrants and refugees, immigrants from all over the world - from Vietnam and Somalia and Mexico. And immigration obviously, by definition, helps a population grow. It is literally people who move to an area. But immigrants also contribute to the Lancaster economy in other interesting, subtle ways. And they are a big part of the reason that Lancaster City in particular has become a unique place.

VANEK SMITH: And in fact, that is the subject of part two of our spotlight on Lancaster County, which will run next week.

GARCIA: By the way, if you live in a city with an interesting economic lesson to teach, get in touch with us. Let us know. Maybe we'll pay you a visit and shine a spotlight on your town.

This episode was produced by Leena Sanzgiri. Our fact-checker is Nadia Lewis. Our editor is Paddy Hirsch. THE INDICATOR is a production of NPR.


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