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Boosting employment opportunities for rural people and places

By James P. Ziliak

Apr 3, 2019

Over 50 years ago, President Johnson’s National Advisory Commission on Rural Poverty issued a call to action to improve the health and economic well-being of rural Americans. The ensuing decades witnessed marked gains in the fight against poverty and disease, but far too many people and places remain behind. This economic dislocation is exacerbated by a silent epidemic of rising joblessness among rural workers, especially those who lack formal skills and training.

Rising living standards and economic mobility for most of us come through full-time work. At the time of the Commission’s report, nearly every nonelderly, nondisabled adult male worked at some point during the year, regardless of their education or where they lived.

This is no longer true. Employment rates of men at all education levels have fallen, but this has been especially acute among those in rural areas without a high school diploma. Today, in rural areas, just over half of men with less than a high school education work, compared to nearly 7 in 10 low-skilled men in urban areas.

In recent years, these trends have impacted work by rural women, too: While employment rates for women rose steadily in both urban and rural places for 30 years, since 2000 they too have declined, and again more quickly in rural places. An opportunity gap has emerged between rural and urban America, and it shows no signs of abating.

In a recent proposal released by the Aspen Institute’s Economic Strategy Group, I suggested a series of ideas to bring “rural people to jobs” and “jobs to rural people.” The premise behind bringing people to jobs is to assist those who are geographically mobile. Indeed, many rural Americans are willing and able to work, but are unable to find gainful employment in their local communities and would benefit from a new place of residence. For those willing and able to move, I propose a new relocation assistance program operated out of state and local workforce development agencies that covers both moving costs and a temporary living stipend.

The second proposed strategy for helping workers is to provide a temporary credit to compensate for commuting costs. Transportation is the second largest expenditure for the typical American family, and the burden is greater for those in rural areas than urban communities. The Commuter’s Credit would be a transportation subsidy to workers in their first year of employment in a new job, and would be roughly equal to the average Earned Income Tax Credit received by families with at least two children.

An opportunity gap has emerged between rural and urban America, and it shows no signs of abating.

Not all workers are able to move, and some live too far from vibrant labor markets to benefit from the Commuter’s Credit. For these workers, I also propose “place-based policies” designed to improve the employment prospects in rural communities.

To start, I advocate for a large one-time investment in rural broadband infrastructure. Rural America was among the last to benefit from key infrastructure investments of the 20th century (roads, highways, water systems) and likewise lags behind key 21st-century infrastructure investment of broadband.

Financial capital for entrepreneurs is a natural complement to broadband expansion, but it is in limited supply and is more difficult to access in rural communities than in urban areas. Thus, I also propose an expanded program to improve financial capital access for entrepreneurs and other small business development initiatives in rural areas operated out of the U.S. Department of Agriculture.

Recognizing that some workers face greater barriers for finding and retaining employment, I also propose a program of public sector jobs to rejuvenate rural infrastructure. This could entail repair work on dilapidated roads, bridges, and public utilities, such as municipal water supplies; rehabilitation of long-neglected CCC trails; and the creation of tourist amenities such as “rails to trails,” among many others. The initial target population for this proposal is “persistently poor” communities that have regularly seen county poverty rates in excess of 20 percent over the past four decades. Currently about 11 percent of all counties meet this classification of persistently poor, and they are typically found in central Appalachia, the South, and Native American reservations in the West.

Rural America is home to Americans with diverse challenges and circumstances. The underlying reasons for rising joblessness are too varied to address with a single reform, and thus a multi-pronged initiative is needed to address the root causes. Combined, these reforms would bring new opportunities to both rural people and places and would be an important first step to ensuring that no one is left behind in sharing the great wealth of our nation.

James P. Ziliak is the Gatton Endowed Chair in Microeconomics and founding director of the Center for Poverty Research at the University of Kentucky.