Urban And Rural Economic Development

The United States has entered a new era. It is not an era defined by our politics, though they have played a role in getting us here, and it is not defined by our technological advances, though they too are important. The new era in which we find ourselves is defined by a gap, or a divide, a chasm between those who are on financially solid ground and everybody else. While we’ve experienced time periods similar to the current situation, in our nation’s past, we’ve never witnessed anything on this scale. The bad news is, it’s going to be difficult to find the political will required to address the problem. But there’s good news too… political will is only half the solution.

Large swaths of rural America have been stagnating or declining for more than a decade — some much longer. Simultaneously, many of our urban centers have experienced similar negative changes that have affected not only the physical place but more importantly, and no differently from rural areas, the people who call those places home. The reasons for each of these occurrences is not dissimilar. A combination of disinvestment (some purposefully, some not by choice) and an exodus of the young and creative folks, who are responsible for much of the entrepreneurial spirit we endeavor to, has left a significant hole that no amount of hard work can replace.

There are many exceptions that can be found, in both cities and smaller towns, but exceptions are not rules and exceptions are not always replicable, for a variety of reasons. In order to reverse current trends and correct the situation before it sets, several initiatives must be undertaken. Some of these ideas will work in geographic locations across the board (regardless of size or setting), others will be relevant to one place or another, and all will have people who naysay or attempt to discredit them as too far reaching or way-out-of-the-box; but at the end of the day, if major changes are not instituted, many cities will devolve into unrecognizable pools of caste and class and thousands of small towns will dry-up and cease to exist.

Rural places, like the one I grew up in, have been trying to find ways to remain economically and socially viable while their populations have shrunk, their tax-bases have likewise decreased (due to both population declines and wage stagnation), and their futures have become increasingly uncertain. This is not the case for all rural locales, but it does represent a significant portion of greater America. In many of these places, there is a strong desire, among some, to get back to the “good ole days” when life was “simpler”. The problem with that line of thinking is that that America, which was built on a combination of manufacturing, agriculture, and major infrastructure investments, ceased to exist more than 30 years ago. While we are in desperate need of new massive infrastructure developments (yet uncertain whether or not they will materialize), agriculture and manufacturing opportunities have declined as technological advances, outsourcing, and increases in productivity and efficiency have eliminated many of those jobs.

Regardless of where one lives, the loss of good paying manufacturing jobs, between 1980 and today, has had some sort of direct or indirect effect. When a small town or a big city loses manufacturing jobs, that impacts the workers, the family’s of the workers, the bartenders and servers that relied on them, the hair salons and barbers, the auto-mechanics, healthcare facilities, public schools (as local tax revenues decrease), movie theatres, retail stores of all types, etc., et al. We’ve seen it happen in small and medium size cities and former boomtowns like Milwaukee, Cleveland, and Detroit. And while many of the mid and small towns have found it more difficult to rebound after such losses, the situation in some of our urban metropolises is less dire, if only for the promise that comes from having a large and diverse pool of talent amassed there. Some of these places have taken steps to re-imagine themselves as hubs of the new creative centers that will carry their regions forward. Others are still trying to understand how best to tackle the issue; and a few seem not to be paying any attention to the plight of the impoverished, or the disparity between the two Americas.

In his new book, The New Urban Crisis, Richard Florida outlines several of the factors that have created the current financial situation and then lays out policy initiatives that might best address these problems. The overarching theme reinforces what we have come to know in these past decades. The future of industry lies in creative thought processes; and in places that generate more ideas, we will find more jobs, better paying jobs, and more opportunity for those on the lower rungs of the economic ladder. However, that does not mean that poverty will magically disappear as cities and regions reconfigure their plans to attract and retain more of this crowd. But it does provide the impetus, in the way of taxes, to supply the necessary services required to alleviate much of the poverty we have today.

Another idea that Florida (as many others have) points out is the benefit of diversity in a city/workplace. It is no coincidence that places with greater diversity have more success, regardless of the enterprise. Be it big or small, public or private, local or international, those ventures that include more diverse voices in the mix are more likely to find success. Part of this has to do with people bringing different experiences into the group, which can spark a completely new, and related idea, from someone who had never been exposed to radically different thought processes. Additionally, stepping out of one’s comfort zone (another part of the practice of working in a diverse setting) gets the mind to think from new perspectives.

Two other areas that Florida discusses in-depth are the need for greater investment in/development of mass transit (both within cities and between cities) and major investments in affordable housing for people/families who don’t make $100,000. or more, annually. This would address economic needs/issues in all areas of city and country, regardless of what divisions they feel may separate them.

Of course it doesn’t make sense to invest in high-speed rail between Eau Claire, WI and Ames, IA; but if we think about the potential for interactions between the knowledge bases surrounding and between locales (agriculture, manufacturing, energy, and the technologies that have not yet been realized), then maybe it makes sense to have some form of transit that could more easily connect people in those places. Having more modes of transport that connect major centers of industry, trade, government and hi-tech, can only benefit our future generations. Investing in great transit (aside from flight-based) that connects Des Moines and Minneapolis/St Paul (via Rochester – Mayo Clinic) and Chicago and Des Moines (via Madison – Univ of WI) with additional, and lower cost, transit options to carry people to destinations that are off the beaten path, like Ames and Eau Claire, would serve as a type of web that can create, within a predominantly rural region, corridors of knowledge that are specific to their needs. It would transform a disconnected or loosely linked place into a ruralopolis.

To be able to think more clearly about the challenges that we face, it is best to have a list of the issues/problems that need to be addressed. I’ve come up with 10 items that I have either witnessed first-hand and/or have been discussed by individuals who have researched and written about the issues. From Horace Cayton & St. Clair Drake (Black Metropolis: A Study of Negro Life in a Northern City – 1945) & Michael Harrington (The Other America – 1962), to Cynthia Duncan (Rural Poverty in America – 1992), Richard Florida, Stefanie DeLuca (Coming of Age in the Other America – 2016) & Matthew Desmond (Evicted: Poverty & Profit in the American City – 2016), to name but a few, many people have spent years, if not decades, studying the problems and working on solutions. The list is not exhaustive by any means and it applies to both urban and rural, and the spaces in-between — with the rural covering a wider scope of place and the urban drilling into specific problems in pockets of cities.

  1. Lack of money (wages, tax income/base, savings)

  2. Loss of jobs

  3. Loss of culturally significant attachments (many of which are tied directly to former manufacturing plants and the products they made as well as the local entities they supported)

  4. Loss of the “sense of place” that helped define people

  5. Loss of incentives that might retain more of the young adults

  6. Lack of diversity, which exacerbates the lack of new ideas problem (more pronounced in agrarian and sylvan settings)

  7. Insufficient planning for the future

  8. Insufficient action on future plans that have been developed

  9. Lack of a clear direction

  10. Desire to return to previous decades when life was simpler, this further inhibits the creative thought processes that are needed for progress to occur

    So how do we address all of this while maintaining fiscally sensible spending habits and without destroying communities in the process? The answers are not complex but they require buy-in from people at the local level. Mayors, city councils, school district administrators, businesses of all sizes, and the citizenry must get involved with the operations and revitalize the place from the ground up.

The first step in the process is creating a plan. And planning, whether for a ruralopolis region or for a smaller area encompassing several large metros with interspersed rural constituents, requires relationship building. Mutual trust and cooperation concerning the long-term goals will be paramount to the success of the plan. The people that make-up the planning committee should be representative of every group and every area within the defined territory and the work must include all of the necessary components of a region: affordable housing, jobs and industry, education, transportation, tourism and culture, government, and any additional pieces that impact the larger economic zone. The basis for the planning has to be developed with a “win-win” approach in mind; the alternative, zero-sum game, creates more losers than winners, which is how we ended up in our current situation. In the beginning stages of the process, funding options should be debated and implemented as quickly as possible…progress on this scale requires a large investment.

Raising taxes is neither popular nor easy. However, when small increases are made, incrementally, over a series of 25 years, they add up; and, they don’t negatively impact anyone’s business or individual income via one big bump. This type of enactment allows for well-developed plans to be put into place over a period of decades (similar to the way the Federal Interstate Highway System was introduced). Moreover, without adequate reserves set aside, for the unforeseen expenses, the best laid plans can be sidetracked and never get restarted.

New developments, and old developments given new life, should include mixed-use blueprints with a commitment to pedestrian friendly spaces. Integrating business, culture, low, middle, and high-income housing, on a human scale (keeping in mind density limits), attracts the widest variety of people to an area. Combined with investments in educational opportunities, both post-secondary and K-12, the integrated communities can provide opportunities to move up the economic ladder. Along with housing, business, public transit, and education amenities, green spaces are key; whether for relaxing or exercising, natural surroundings provide respite from the daily grind. Anything that can be done to attract younger and more diverse groups of people, can help achieve greater viability for the long-term.

And speaking of the long-term, investments in education are the best way to ensure a strong future for a region. Those cities/states that currently invest more in education (from pre-k through colleges of all types) are the places with the most opportunity for all people.  Therefore, directing some of the new revenues (taxes) to local public schools, and investing in new post-secondary training options: e.g. pipeline programs tied to Technical & Community Colleges, certificate programs, or innovative high school programming that prepares students for a particular industry upon graduation. Education spending brings a greater return on investment (when thinking generationally) than any other type of expenditure. And, as an aside, education is not a business and trying to run it as such is a sure-fire way to fail the students; but, that doesn’t mean you can’t use business terminology and number crunching practices to analyze what’s working and what isn’t.

Once a young person has graduated from high school or completed post-secondary schooling, they need to be paid a living wage. If they are not, one of two things will happen; either they will move somewhere that pays them a living wage or more (depending on skill set), or they will remain in the community and not “give back” in terms of decreased: productivity, taxes, spending, and engagement, that they otherwise are capable of. Neither of these options are preferred if the goal is to increase economic viability and growth. Depending on your address, a livable wage might be $10.00 an hour or it might be $18.00 an hour, cost-of-living across the nation varies from one zip-code to the next. An added bonus, for the employers, is the data that shows a correlation between higher wages and lower turnover. Training can be a major source of spending and cost reductions in that area can be directed to higher wages. And don’t forget, the large middle class that made America’s economy strong for the better part of four decades was built in part on paying people a decent wage to do jobs that were neither highly skilled nor particularly difficult to learn. But they were paid well just the same (whether that was due to strong unions or employers who were concerned about their employees is not as important in this discussion) and they were vital components of their community. People working in low-wage jobs today should be paid similarly and given the same opportunity to take part in all aspects of the American dream.

As wages rise throughout a region (because other businesses will want to attract the best talent possible), and spending in local stores increases, economic vitality will attract entrepreneurs and new businesses will take hold. This can promote further growth; and, along with existing companies expanding, if demand warrants, the region will likely see more young people choosing to stay in the area or return to the area after spending a few years away learning new jobs or attending school. This is all part of a win-win scenario. But, be aware of the business wo/men who are looking to take advantage of your success.

There are corporations who like to play the tax break game. While it is true that businesses move for a variety of reasons, rarely do they choose a place just because it is offering the greatest incentives in terms of tax breaks; they typically know where they want to be and take advantage of cities that are hungry for new jobs. This is often done under the guise of job creation, which is ultimately seen as a victory. However, when the numbers come in, it turns out that all of the incentives provided, to attract the new firm, were not any better for the local economy so far as realizing substantial economic growth. And in the end, when corporations pay less, somebody else pays more — the members of the community. Or, those taxes are never collected, reducing services, reducing education funding, and reducing the ability to invest in new infrastructure that will attract other businesses and people. The most important piece of a successful business, in modern times, is having an educated workforce that understands how to problem solve. Therefore, collecting the taxes that fund local educational endeavors, is critical.

Creativity, in all manner of work, is central to success. Whether we’re looking at manufacturing, agriculture, hi-tech, service industry, sales, healthcare, education, or anything else, a workforce that can help streamline systems and integrate new technologies is key to keeping local, regional, and national economies growing. Whereas R&D was once tasked with innovation and finding more efficient ways to increase productivity, all employees are now asked to provide their input. This is to say, those places that invest the most in education will likely be the same sites that will experience the most growth.

In the midst of planning and designing, and building, politics will inevitably become an issue. Localities should push for more control over allocation of funds. States, and the Federal Government, should work with local officials to allow for this to happen with a degree of oversight to ensure Civil Rights laws are not being impinged and to make certain that protected classes are not being left out of the distribution. If the community has a bigger say in how and where tax dollars are spent, their buy-in, into the big plan, is strengthened and their engagement in and support of the big picture can work to bring in others. It is a model that requires inclusiveness and a “we are” attitude to enlist those who are unsure of the “progressive” agenda that has been undertaken.

When we think about those who are on financially shaky ground (to include all the “middle class” folks who are living paycheck to paycheck), we have to remember that: financial hardship and/or poverty is not a state of mind; poverty is not caused by laziness or a lack of morals; it is not a “culture”, as some would have us believe. Poverty, and therefore the decline of a place, has everything to do with policy and practice. Which policies have been implemented that have advantaged some and disadvantaged others and which policies have not been implemented because they are cost prohibitive and targeting the “takers” of society. What impacts have these policy decisions had on any individual’s ability to grow up in a stable neighborhood and attend public schools that are well funded? Which policies have been made law only to see state and local governments find loopholes and not allow the law to be practiced as intended? How do we place blame on the person who has had far fewer opportunities to excel and succeed and far more impediments placed in their path? These are the realities we must consider when thinking about how we’ve come to this point, socially and economically, in a nation such as ours. In his most recent book, Florida states, “Poverty occurs in the absence of institutions that unleash the creative energy of people and neighborhoods, or, even more so, when there are dysfunctional structures that harness and leverage these clusters of human creative energy.” If we provide the spaces for people to learn and to grow and to fail, without fear of that failure being an end, rather than a learning opportunity, we can build a web of interconnected regions that will carry us into the next century and beyond.

The work of building a new and better kind of society is not only needed here, but also in many countries around the world. This too was an area that Florida spent time discussing and the similarities that are found between the various locations is telling. He states:

“Lacking the kinds of basic infrastructure and division of labor we take for granted in the advanced world, they were forced to spend the majority of their time taking care of life’s immediate necessities: fetching their own water, bartering for and preparing food, and traveling long distances by foot or rudimentary forms of transportation. This left them scant time to devote to things that bring greater development—the further enhancement of their own skills and the broader development of their communities.”

This idea of time commitment dedicated to the preservation of life is not entirely different from what we see in our own communities, where higher levels of poverty have taken hold. People are spending greater amounts of time surviving which leaves less time (energy, money, etc) to focus on personal growth or developing ideas that could become money-making ventures, i.e. businesses. We don’t have to sit back and watch America deteriorate, we have the people power, the funds, and the work-ethic to make this country work to everyone’s advantage, we only need the will to make it happen.

 

Published by

Leif

Bent on making public education more equitable, economic opportunities more widely available, the general public more empathetic, and food more tasty. Rich experiences in Inner-city public education, rural America (farm to factory), restaurant industry professional, and animal & plant caretaker extraordinaire. 11 States and counting.