Rethinking Rural and Urban Investment

In June 2008 David Hawpe of the Courier Journal wrote an interesting piece asking “Where should we focus, town or country?”  Hawpe’s question was based on an effort by the Center for Rural Strategies to create something they call the Rural Compact. As quoted in the article Dee Davis, one of the Compact’s biggest supporters states his goal to “…re-imagine the American trajectory so that rural communities can play their part and make a fair contribution.” By ‘a fair contribution’ Davis means contributing more to the GDP of their respective states through increased economic potential of rural areas. A quick look at the Center for Rural Strategies’ website indicates that the strategy behind the Compact is to advocate strongly for more investment in rural communities in the form of education, health services, and capital. This investment, Davis argues, will bring rural communities more in-line with their urban counterparts and enable them to stop draining and start contributing to state economies.

The ‘drain’ part of the problem Davis outlines is one we are all too familiar with in Kentucky. While farming remains the largest part of rural economies, working farms only represent a small % of the actual landmass designated as rural in the United States. The rest of our rural land consists of parcels of varying size that generate no more income than a backyard in Cincinnati or a rooftop garden in Manhattan. Occupations for these rural citizens vary as well. Some make a fine living by commuting into larger population centers to perform a number of jobs. Some provide a few vital services to their rural neighbors like doctors, lawyers, gas station managers and store owners. Some are employed by a medium to large company that has chosen to set up shop in an area where land (and labor) come cheaper than in cities. And the last of rural residents are either marginally employed or not employed at all for various reasons.

It is the last group that is most troubling. Unfortunately this group is growing as meth has exploded in rural areas leaving many unable to work. Still others simply cling to a geographical area they feel attached to despite the lack of opportunity. In both cases larger urban neighbors may end up footing the bill for social services to these rural poor through state budgets that over-emphasize rural aid in some states. Kentucky cities have long been a victim of this dynamic and for obvious reasons it breeds resentment.

While it is tempting to follow Davis’ suggestion of more rural investment, one cannot help but wonder if it is wasteful to try to create something from nothing in rural areas. Why invest billions in our rural areas so people can continue to live there when the easier strategy might be to pull social services and force them to migrate to urban areas? I believe Hawpe is edging in this direction with his own suggestions of a counter-Compact for urban areas. Hawpe quotes favorably from a study by the Brookings Institute to further make his case for cities:

According to Brookings, the so-called “Golden Triangle” (a dismissive usage invoked by many rural Kentuckians to suggest unjust advantage) accounts for 43 percent of the state’s population, 51 percent of the state’s jobs and 56 percent of the state’s gross domestic product. If you add the parts of Kentucky that help constitute six other top-100 U.S. metro areas, then Brookings calculates that the state’s nine biggest metros account for 57 percent of population, 66 percent of jobs and 72 percent of GDP.

We are a metro nation, Brookings insists, and we must create an “agenda for the nation that builds on the assets—and centrality—of America’s metropolitan areas.” An agenda that will “give cities, suburbs and metro areas the tools they need to leverage their economic strengths, grow in environmentally sensitive ways, and create opportunities to build a strong and diverse middle class.”

While I agree with Hawpe in the sense that cities are often neglected in favor of rural areas, especially here in Kentucky with a rural-dominated legislature, he and I disagree on the concept of where the money should be redirected. The truth is that our urban centers are not really much better off in most cases. Employment often remains lower than the national average and while jobs are being created they are primarily service sector or white collar jobs in most cities. Middle class employment is rare.

The answer that eludes both Davis and Hawpe is to drive more money into the suburbs. According to statistics provided by Joel Kotkin and quoted in an earlier essay, 90% of all growth in the last six years has been in the suburbs. That is where the nation’s companies are relocating (if they haven’t already) and that is where the majority of America’s population has chosen to live for decades. It makes sense to invest the majority of public dollars where the most potential for growth resides. that is not to say we should neglect urban and rural areas, but we have to have a proportional plan for public investment that puts the greatest number of people first.

The greatest benefit to a heavy suburban investment is that the suburbs can act as a bridge between urban and rural areas, providing transit areas for goods, revenue and opportunity. Suburban areas also provide a consumer class for the increasingly retail-focused urban areas as well as a source of employment for rural populations willing to commute. What is required to make this happen though is a shift in thinking. Cities are sexy and farms tug at our heart-strings. Suburbs though are where the majority of our population resides.