economic trends in rural Illinois based on data from the. 2000 Census of ...... The Small Business Development Center network and other groups can help with ...
Fall 2002 Volume 14, Issue 3
Keeping Rural Illinois Vibrant: State Policies for the 21st Century
www.IIRA.org
by Norman Walzer, John Gruidl, and Lori Sutton1 There is great interest nationally in maintaining and improving the quality of life in rural areas (Drabenstott and Sheaff 2001). This interest is prevalent not only among rural residents, but also among many urbanites who value the traditions of rural life and the recreational and scenic amenities of rural regions (Lasley and Hanson 2002). Support for the vitality of rural America extends to local, state, and federal government officials as well. For instance, a bipartisan survey of Congressional officials commissioned by the W. K. Kellogg Foundation (2002) reported, Federal legislators see rural America as an important part of the nation’s landscape. As the source of the nation’s food supply, it plays a central role in the vitality of the country. As an incubator of American values, such as self-reliance, stewardship of the land and faith, it represents an important source of American tradition. These are views held by Democrats and Republicans alike and are largely independent of the constituency they represent. (2) Too often, policymakers focus on the negatives rather than on the opportunities in discussing rural issues. With large cities and surrounding suburbs facing problems such as traffic congestion and sprawl, the competitive living costs and traditional values often available in rural areas offer distinct advantages. It is true that some rural areas need special attention to address systemic problems, but they also offer opportunities that could be developed to the benefit of both metro and rural areas alike. This is certainly true here in Illinois.
The objectives of this report are to provide a balanced overview of the current status of rural Illinois and to discuss what can be done to make it even more vital in the years ahead. First, we examine population and economic trends in rural Illinois based on data from the 2000 Census of Population. Many parts of rural Illinois have made progress during the 1990s in recovering from the significant economic setbacks experienced during the previous decade; however, population shifts also indicate a continued “suburbanization” of the population in Illinois. Shifting population can pose challenges in maintaining a strong economic base in rural areas. Second, opportunities for rural areas based on recent changes in technology, attitudes toward the environment, and other factors are discussed. Finally, based on these trends, a series of policy questions are posed that policymakers should consider in their efforts to keep rural Illinois a vibrant place to live. The days are long gone when government alone can provide solutions to endemic problems of economic development or quality of life. Instead, the key to a positive long-term future for rural Illinois is an enlightened and empowered local leadership base supported by a set of relevant and useful state and federal programs. Community leaders must build on available assets and work with local institutions, state and federal agencies, and private interests to address important local concerns. Many examples exist of communities that have done just that and with significant outcomes. State policies can play a major role in complementing these local efforts.
1 The authors are Director, Professor, and Research Associate in the Illinois Institute for Rural Affairs, Western Illinois University, respectively. They thank Burton Witthuhn and Karen Poncin for comments on an earlier draft.
Trends Facing Rural Illinois population living in rural areas declined from 16.2 percent in 1990 to 15.1 percent in 2000 (U.S. Bureau of the Census 1990, 2000).
Rural Illinois has been affected by many regional and national trends during the past decade (Crump 1997; Johnson and Walzer 1996). For example, while agriculture remains strong as an industry in Illinois, increased mechanization and other productivity improvements have made it smaller in terms of employment. In 1990, for instance, agriculture1 employed 2.4 percent of the employment statewide and 8.7 percent in the current 74 rural (i.e., nonmetropolitan) counties.2 By 2000, however, agriculture employed 1.1 percent of the state population and 4.8 percent of the population in the rural counties, a substantial decline.3 These employment changes occurred while total production in agriculture increased.
The slow growth in population in rural Illinois is cause for some concern because it does not mirror the experiences of surrounding states. For example, rural areas in the five contiguous states—Indiana, Iowa, Kentucky, Missouri, and Wisconsin—increased 7.6 percent compared with the 1.1 percent growth in Illinois. At the same time, metro counties in these states increased an average of approximately 10 percent, which is very similar to the 10.1 percent in Illinois. Thus, the pattern for rural Illinois is atypical of the six-state region and warrants further investigation or even targeted policy intervention depending on the causes (Figure 1).
It is clear that traditional farming alone is not a panacea for rural areas. In actuality, income must also be generated from value-added agriculture, tourism, retirement communities, manufacturing, and many other enterprises. The future success of family farms in Illinois is critically linked to the economies of our local communities. In fact, in 1999, a majority of the farm operators’ household income came from off-farm income such as from job(s) in surrounding communities.4
The population shifts in rural Illinois are not equally distributed either. Western and southeastern counties seem to have been most adversely affected (Figure 1). Both of these areas are based on agriculture and natural resource industries, neither of which has had major employment increases in recent years. Likewise, these areas have less access to modern four-lane highways than other regions, placing them at a disadvantage for attracting businesses.
Population Changes. During the 1990s, the population in Illinois increased by approximately one million people, and most of that growth was in the five collar counties of Chicago that grew by 25.9 percent between 1990 and 2000.5 As of 2000, 41.8 percent of Illinois’ population lived in the Chicago suburbs compared with 39.2 percent in 1990. Population in the city of Chicago grew during the 1990s for the first time since the 1950s and now represents 23 percent of the state population.
Children and Youth. Of special note in the population shifts is the 8.5 percent decline in youth (less than 10 years of age) in rural Illinois. Some regions such as westcentral and southeastern Illinois have suffered especially large losses in young people. This is troublesome because of the financial pressure that it puts on rural schools. As the number of students declines, state aid to schools, based on a per capita formula, also shrinks.
The encouraging news for rural areas is that they gained population during the 1990s (1.1%)—a turnaround from the population losses in the previous decade. Even so, due to the large gains in the suburbs, the percentage of the state
Furthermore, the cost of educating each student rises due to smaller class sizes and this, in turn, requires more revenues from property taxes to fund schools.
1 In the 1990 and 2000 Census, the numbers listed include agriculture, forestry, fishing, hunting, and mining. This does not include jobs in related industries such as agricultural machinery or food processing. 2 Except where stated otherwise in this report, the terms “rural” or “nonmetropolitan” are used interchangeably to refer to the nonmetropolitan counties in Illinois. The Bureau of the Census defines Metropolitan Statistical Areas (MSA) as a county or group of counties having a large population center and economic ties to adjacent communities. The area must either have a city or urbanized area of 50,000 or more inhabitants. All counties not contained in an MSA are classified as nonmetropolitan. In 1996, the MSAs were redefined by the Office of Management and Budget and, in Illinois, Boone and DeKalb counties were reclassified from rural to metro. The comparisons in this report are based on the 74 rural counties contained in the 1996 definition. This measure does not consider the many communities smaller than 25,000 in the MSA counties. 3
Data throughout this report are from the U.S. Bureau of the Census (1990, 2000).
4
Eighty-three percent of farm income comes from off-farm sources (Economic Research Service 2002).
The five collar counties are DuPage, Kane, Lake, McHenry, and Will Counties. “The Suburbs” include the five collar counties plus the Cook County area outside Chicago. 5
2
There is further evidence to support the explanation that families are leaving rural Illinois because of limited economic opportunities. For instance, a significant negative correlation is found between the county unemployment rate in 1995 and population changes for family households with children in rural Illinois between 1990 and 2000. There is also a negative correlation between unemployment and population declines of families with female household heads for the 1990s.
Figure 1. Population Changes, 1990 to 2000
These population shifts over the long-term may adversely affect the future workforce in rural areas as well as contribute to urban sprawl in northeastern Illinois. Mounting traffic congestion, increasingly unaffordable housing, receding open spaces, and stressful social patterns are among the impacts of such urban sprawl. A concerted statewide effort to attract better-paying jobs to rural areas could avoid some of these trends and help both metro and rural areas. Elderly. Changes in the elderly population in Illinois do not pattern the experiences in surrounding states either. In rural Illinois, the 65 and older cohort declined 1.6 percent while other states reported average increases of 4.0 percent in rural areas. Although metro areas in Illinois reported increases of only 6.1 percent, these increases were less than the growth of 8.5 percent experienced in surrounding states.
Percent Decreased (n=34) Increased up to 3% (n=27) Increased between 3% and 8.6% (n=23) Increased more than 8.6% (n=18)
Changes in elderly residents also exhibit clearly defined regional patterns within Illinois. The predominantly rural western and southeastern counties reported declines or slow growth compared with the more urban central and northeastern regions (Figure 2). People apparently are moving away from rural areas after retirement. This trend adversely affects rural areas because elderly residents represent an important economic stimulus to local economies. They bring pension and Social Security income into the community and spend a large share of their income on local goods and services (Pulver 1988).
Source: U.S. Bureau of the Census (1990, 2000).
Since property values are lower in these regions, there is pressure to raise property tax rates. In some school districts in these areas, the controversial issue of school consolidation is being debated. Of course, from a rural perspective, the loss of children portends more dramatic population declines in the future. Meanwhile, in the Chicago collar counties, the number of families with young children is rising rapidly. Clearly an ongoing shift of young families to the suburbs is underway, and the Chicago suburban area is expanding in a westerly direction (Figure 1). Some of the most rapidly growing counties in Illinois during the 1990s ring the collar counties: Boone County (35.6%), Grundy County (16.1%), DeKalb County (14.2%), and Ogle County (11%). The effects of these shifts can be felt as far west as LaSalle and neighboring counties.
Some elderly people may leave rural counties because they believe that local services, especially health care, are not adequate for their needs. Recent declines in the number of hospitals, pharmacies, and healthcare agencies in rural areas exacerbate the situation. The population losses among the elderly and youth highlight the importance of services, especially healthcare, in rural areas because both groups are heavy users of these services. Technology may enable even very remote areas to access services, but the provision of such services requires an investment in an information technology infrastructure. Telemedicine has made significant advances in recent years and, when coupled with outreach programs by physician specialists, has allowed more elderly residents to remain in their home communities because quality healthcare services are more accessible.
Jobs are a likely explanation for many of these trends as young parents who are starting careers move to better employment opportunities and higher wages, which, in turn, explains the outmigration of children from rural areas as well. The fact that the rural counties have more older residents and lower birth rates is another explanation for population declines or slow growth. 3
residents. This characteristic brings some encouraging news for residents of rural Illinois. The per capita incomes of rural residents improved in the 1990s by slightly more than metro areas (15.4% versus 12.4%).6 Income in nonmetro counties in the surrounding states increased 19.2 percent, a higher increase than in rural Illinois. Per capita income in rural Illinois was slightly higher than the surrounding states, however—$13,107 versus $12,736, respectively. Metro counties in Illinois and its surrounding states showed trends similar to nonmetro counties. The following are factors that contribute to these differences in growth.
Figure 2. 65-Year-Olds and Older, Percent Change, 1990 to 2000
Rural Illinois was more successful than metro areas in moving residents from welfare to work as part of the Personal Responsibility Work Opportunity and Reconciliation Act (PRWORA) efforts, which began in 1996. This legislation limited the number of years for which welfare recipients could receive benefits and required participation in training for work experiences or at least part-time employment to qualify for continued benefits. Rural counties actually led the way in the percentage of welfare recipients (Temporary Assistance to Needy Families) who found at least part-time employment. Specifically, when the October 1997 and October 2000 “available to work” caseload was compared, rural Illinois counties dropped by 92.2 percent whereas metro counties declined 85.1 percent (Table 1).7 This difference between rural and metro counties can partly explain the fact that incomes in rural areas increased more rapidly than in metro areas. As noted earlier, the fact that elderly people are leaving rural areas may also mean that fewer residents with lower incomes are left; this could explain the higher overall average per capita income statistic. Another factor that contributes to this trend is that both spouses (68.7%) were more likely to work outside the home in rural families with children under the age of 18 living at home than in similar families living in metro areas (59.2%). (U.S. Bureau of the Census 2000)
Percent Decreased more than 5% (n=25) Decreased up to 5% (n=31) Increased up to 5% (n=20) Increased more than 5% (n=26)
Source: U.S. Bureau of the Census (1990, 2000).
Distance education has brought classes to rural students and has helped prepare them for higher education or future careers requiring special skills. Expanding these services will require better access to broadband and other telecommunication facilities in rural areas, however. At this time, the population density makes these services expensive.
Table 1. “Available to Work” Caseload Information, October 1997 and October 2002
Economic Trends. Economic opportunities underlie many, if not most, decisions about where to live and, therefore, are key to understanding population trends. Trends in income, wages, and employment are examined next to form a background for the policy discussions in the last section of this report. When combined, these indices provide an overall picture of conditions in rural Illinois.
Region Statewide Metro counties Nonmetro counties
1997
2002
Percentage Change 1997-2002
153,012 137,478 15,534
21,749 20,541 1,208
-85.8 -85.1 -92.2
Source: Illinois Department of Human Services (2002).
Trends in Income. The level of income is a measure, albeit imperfect, of the opportunities and quality of life of
6 The U.S. Bureau of the Census income measure uses the notion of money income, which includes money received by individuals (including social insurance contributions). 7
These figures were provided by the Bureau of Employability Development Services in the Illinois Department of Human
Services.
4
Wages and Salaries. The largest component of personal income is wages and salaries and this constitutes 73.2 percent nationwide. Wages are traditionally lower in rural areas because the cost of living is less, and these differences in the living costs complicate comparisons. Nevertheless, the best information available shows a substantial, and growing, gap in pay rates between metro and rural counties (Figure 3). This gap can mean that future shortages in labor markets will hurt rural areas disproportionately as graduates are drawn to metro areas by widening wage differentials.
also exists in each of the major industrial classifications, including manufacturing, services, and trade. Equally important is that wages in rural Illinois have declined in constant dollars during the past two decades. For instance, the $12,288 paid in 1980 had declined to $11,788 by 2000. This trend compares with a substantial increase (14.2%) in purchasing power in metro areas. Higher unemployment combined with more routine jobs and increased foreign competition may help explain this trend. For rural areas to compete, the workforce must be dependable, well-trained, and current in skills. High productivity is essential to justify high wages.
The wages paid are expressed in constant dollars (deflated by the Consumer Price Index) and are wage and salary payments divided by number of employees (Figure 3). By necessity, these data are by place of employment rather than place of residence. The trends are similar to national comparisons made by the Bureau of Economic Analysis for other rural areas. (Economic Research Service 2002).
Since the composition of jobs in rural counties differs from those in metro areas, the wage comparisons reflect skills, work responsibilities, and other factors. Nevertheless, the pay differences do reflect economic opportunities in rural areas for recent graduates and others as they seek to upgrade their employment opportunities. Clearly, these comparisons suggest that metro areas are more enticing.
In 1980, the average wage paid in rural Illinois counties was $12,288—approximately $5,200 below that paid in metro areas. Rural wages were 70.3 percent of those in metro areas. The gap widened from $5,200 in 1980 to $8,178 in 2000, making rural wages 59.0 percent of their metro counterparts. Nationally, the gap widened from $3,972 in 1980 to $6,387 in 2000, making rural wages 65.4 percent of their metro counterparts. The urban-rural wage differential
For many years, rural areas have been marketed as low-wage locations to industry, and this perception may perpetuate the differentials shown. Making sure that rural areas have high-quality services and access to the latest technological advances could make them more competitive and attractive for future business attraction and retention. Marketing rural areas
Figure 3. Earnings Adjusted for Inflation, 1980 to 2000
Average Wage Per Job $22,000
$19,966
$20,000 $18,000 $16,000 $14,000 $12,000 $10,000
$17,491
Gap of: $5,203
Gap of: $8,178
$12,288
$11,788
Illinois Metro
Illinois Nonmetro
Note: The Consumer Price Index was used to adjust for inflation where 1980 = 100.0 and 2000 = 209.0. Source:
U.S. Department of Commerce, Economics and Statistics Administration, Bureau of Economic Analysis (2002).
5
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
$8,000
more on work ethic/quality of life or lower housing costs could also be a more effective approach in the future, and both of these strategies could lead to better-paying opportunities. This strategy assumes that the quality of education is maintained at a level to keep the workforce competitive. Investing in the educational system provides a better workforce for businesses that are experiencing difficulties in hiring personnel in metro areas, plus it will bring better-paying jobs to rural counties and help retain high school graduates.
then their incomes may be higher and it could explain the fact that incomes in rural areas grew more than metro areas. Commuting is another example of the interdependence between rural economies and the economies of downstate cities such as Bloomington-Normal, Champaign-Urbana, Peoria, Springfield, and the Quad Cities. Employment Trends. Statewide, Illinois lost a significant number of manufacturing jobs during the 1990s. In fact, manufacturing employment declined 11.7 percent in Illinois compared with a 1.0 percent increase in the surrounding states (U.S. Bureau of the Census 1990, 2000). Illinois fared even worse in terms of employment in wholesale and retail trade, with a decline of 25.2 percent in Illinois compared with a decline of 19.5 percent in surrounding states. The surrounding states also gained more service jobs than did Illinois.
Finally, it is important to recognize that many rural residents commute to better-paying jobs in the cities. In fact, more rural workers are commuting to cities now than before. The 1990 Census reported that 10.7 percent of the people not living in an MSA worked in an MSA. By 2000, that figure had increased to 13.8 percent (U.S. Bureau of the Census 1990, 2000). Better roads and highway access have reduced travel times, and the declines in businesses in rural communities have caused residents to travel farther.
Manufacturing, an industry that traditionally pays higher wages, performed much better in rural Illinois compared to its urban counterparts. Rural counties declined 2.3 percent in manufacturing employment, a loss of 3,739 jobs. Metro counties, on the other hand, lost 13.4 percent, or 120,146 jobs (Table 2). Rural Illinois relies more on manufacturing,
The fact that rural residents work more often in urban areas may mean that they have access to higher-paying jobs, even though the commuting costs may be higher. If this is true, Table 2. Census 1990 and 2000: Industry Employment
Surrounding States: Indiana, Iowa, Kentucky, Missouri, and Wisconsin
Illinois
United States
Area
Nonmetro
Metro*
Illinois
Nonmetro
Metro*
5-State Region
Nonmetro
Metro*
Manufacturing 1990 2000 Percent change
161,180 157,441 -2.3
893,867 773,721 -13.4
1,055,047 931,162 -11.7
830,048 920,561 10.9
1,394,299 1,327,020 -4.8
2,224,347 2,247,581 1.0
4,410,205 4,313,347 -2.2
16,051,873 13,972,658 -13.0
Percent Employed in Manufacturing 1990 20.2 2000 18.4 Percent change -9.0
19.3 15.5 -19.6
19.5 16.0 -18.0
23.3 22.6 -3.1
20.7 17.5 -15.4
21.6 19.3 -10.7
21.2 18.2 -14.3
16.9 13.2 -22.1
Wholesale and Retail Trade 1990 161,832 2000 129,678 Percent change -19.9
996,230 736,784 -26.0
1,158,062 866,462 -25.2
714,248 603,487 -15.5
1,495,967 1,176,570 -21.4
2,210,215 1,780,057 -19.5
4,156,475 3,516,063 -15.4
20,400,217 16,372,410 -19.7
20.3 15.1 -25.3
21.6 14.8 -31.3
21.4 14.9 -30.5
20.0 14.8 -26.2
22.3 15.6 -30.1
21.5 15.6 -28.9
20.0 14.8 -25.9
21.5 15.4 -28.1
274,774 364,950 32.8
1,885,700 2,513,426 33.3
2,160,474 2,878,376 33.2
1,126,847 1,596,898 41.7
2,605,274 3,618,884 38.9
3,732,121 5,215,782 39.8
6,831,565 9,911,137 45.1
39,034,170 53,459,656 37.0
Percent Employed in Services 1990 34.4 2000 42.6 Percent change 23.7
40.8 50.5 23.7
39.9 49.3 23.7
31.6 39.1 23.8
38.8 47.8 23.4
36.3 44.8 23.4
32.9 41.8 27.1
41.1 50.4 22.6
Percent Employed in Trade 1990 2000 Percent change Services 1990 2000 Percent change
*The Office of Management and Budget defines metropolitan areas (MSAs). Currently defined MSAs used for calculations in this paper were released June 30, 1999. Source: U.S. Bureau of the Census (1990, 2000).
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with 18.4 percent of its employment being in this area compared to 15.5 percent in metro areas. Losing relatively fewer manufacturing jobs in rural areas might seem like a positive trend; however, as shown, the wages, in constant dollars, declined in rural areas. In fact, the declines in rural wages may have attracted or helped to retain some manufacturing firms.
wholesale trade, with declines of 19.9 percent and 26.0 percent, respectively. Nevertheless, both groups suffered declines. These changes reduced the reliance on trade from 20.3 percent to 15.1 percent in rural areas and from 21.6 percent to 14.8 percent in metro counties. Several possibilities, including purchases over the Internet or mail order catalogs as well as increases in the use of discount stores and/or shopping malls, explain the declines in trade employment (Colavito and Walzer 2002).
The shifts in manufacturing employment did not affect all of rural Illinois in the same way or to the same extent. Northwestern and central Illinois reported declines more often than either southeastern Illinois or portions of west-central Illinois (Figure 4). The more positive trends reported in these areas, however, may partially reflect the smaller manufacturing base, which magnifies even small changes when expressed as percentages. Recent shutdowns in Sterling-Rock Falls, Galesburg, and Macomb may offset this trend in west-central Illinois.
Rural areas reported patterns similar to metro areas in terms of service employment—32.8 percent growth in rural areas compared with 33.3 percent in metro areas. Services are a higher proportion of employment in metro areas (50.5%) than in rural areas (42.6%); however, the consumer service jobs coming into rural areas, such as fast food and dry cleaning, usually pay less than the producer service jobs such as legal and engineering in metro areas (Crump and Walzer 1996).
Employment changes in rural Illinois counties were less adversely affected than metro counties in retail and Figure 4. Unemployment Rate, 1980-2002
Percent 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0%
Illinois Rural
Illinois Department of Employment Security (2002).
7
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
Illinois Metro
*2002 is an average of the first eight months of 2002 (January through August).
Source:
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0.0%
Opportunities for Rural Illinois The recent economic performance of rural Illinois is decidedly mixed; however, policymakers should recognize that there are opportunities on the horizon. Rapid improvements in communication technology, growing recognition of the value of the natural environment, lower living costs, and the increasing appeal of rural recreation are among the factors that bode well for the future of rural Illinois. State policies and initiatives, such as those described here, will enable community leaders to position their communities to take advantage of these factors.
come. Rural Illinois communities must develop their services and amenities to make them appealing to these new retirees. Third, communities that have discovered the benefits of rural tourism, arts and crafts, vacation homes, resorts, and retreats are enjoying a rebirth. Urban residents travel to scenic rural areas in search of scenic beauty, historic sites, and recreation options such as hiking and golf. Of the 285 rural counties classified as “recreation destination” counties, 93 percent of them gained population between 1990 and 1996 (Johnson and Beale 1998). Many rural communities, especially in southern Illinois, have the potential to develop their tremendous environmental and historical attractions.
First, rural areas are now much less isolated than they were even a few decades ago (Johnson and Beale 1998). Satellite technology and the Internet now enable information to flow quickly even to the most remote locations. Decades of steady investment by the state and federal government in building and widening roads have provided rural workers with easier access to jobs or other opportunities in nearby cities.
Fourth, there are growing opportunities in value-added agriculture, including many different types of ventures designed to increase income for farmers. For example, some farmers are turning to niche marketing and raising identitypreserved crops targeted for overseas markets. Another option is for farmers to form a cooperative venture to process or add value to agriculture products such as through an ethanol plant. Still other farmers are involved in organic products and/ or in community-supported agriculture (Walzer, Merrett, and Holmes 1999). These enterprises are driven by the fact that many Americans are willing to pay more for food that they see as safer and better for the environment. The overall results are lucrative economic opportunities in the more specialized and targeted production of agricultural products to meet the needs of increasingly sophisticated individuals and firms.
Many rural places have become more attractive as business locations because of their improved access. For example, catalog retailer Lands’ End operates a huge national distribution headquarters in Dodgeville, Wisconsin, a small town west of Madison. The Dodgeville site is possible because of improved highway access (a four-lane, divided highway), availability of overnight package delivery, and enhanced marketing opportunities afforded by the Internet. Second, retirees are often attracted to the scenic amenities and recreational activities available in rural areas. In fact, of the 190 rural counties classified as “retirement destination” counties, all gained population between 1990 and 1996 (Johnson and Beale 1998). Retirees are often footloose; they can go anywhere that their pension and Social Security checks can reach them. Furthermore, the retiree market is expanding. The aging of the affluent baby-boom generation will provide a plentiful supply of retirees for many years to
Fifth, renewed attention to conservation programs designed to protect the environment will be paid in the future. Conversion of marginal agricultural lands to rural homesteads, rural retreats, bike trails, and tourist destinations could create new economic opportunities (Drabenstott and Sheaff 2001). Rural residents should preserve these assets, yet, at the same time, they must find ways to convert them into valuable economic assets.
State Policy Issues for Rural Areas The state has a vested interest in the welfare of its rural communities:
•
Businesses in metro and rural areas alike rely on rural areas as markets and sources of labor.
•
Nearly one in five Illinoisans live in rural areas.
•
•
The quality of environmental resources, such as water and soil, is largely determined by what happens in rural regions.
Urban and suburban areas cannot accommodate a continued increase in migration of rural residents in search of better employment without suffering from increased congestion and crowding.
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•
place to raise their children, and a feeling that they are part of their community.
Illinoisans perceive rural areas as repositories of deeply held values and American traditions found nowhere else.
Local Capacity-Building. Research and practice shows that locally driven economic development programs are more effective than “top-down” programs. For rural areas to prosper, local leaders and municipal officials must have the expertise and knowledge to find innovative solutions. Therefore, one of state government’s most valuable and cost-effective strategies is to expand the quantity and quality of technical assistance and capacity-building programs to local communities, such as those offered by the Illinois Institute for Rural Affairs, the Department of Commerce and Community Affairs, and University of Illinois Extension. Ultimately, the decisions about rebuilding the rural economy will rest with local policymakers, and they must be as informed and knowledgeable as possible to ensure that effective decisions are forthcoming.
When rural areas do not prosper, both urban and rural residents are adversely affected. The most beneficial outcome from both urban and rural areas is to help build strong rural economies that can more effectively contribute to the overall welfare of Illinois. Our review of the 2000 Census data provides a snapshot of the conditions in rural Illinois as it enters the 21st century. In many respects, there have been major improvements in rural Illinois. Both population and income (corrected for inflation) have increased since 1990. Yet, the need for economic stimulus is apparent, especially in the west-central and southern Illinois regions, but also in selected areas that do not seem to be doing as well as other areas. While the statewide overall rural population grew, some areas experienced a significant loss of families with young children. Families with young children are leaving rural areas because of the relative scarcity of high-paying jobs in some communities. This conclusion is supported by the increasing gap in wages between rural and urban areas in Illinois. Many rural school districts face declining student enrollment and a limited capacity to raise funds through property taxes, making high-quality education more difficult.
Value-Added Agriculture. An asset of rural areas that often is overlooked in economic development discussions is the role that agriculture can play as an input in innovative new industries. In addition to the traditional food-processing industries, many exciting new opportunities exist for producers who affiliate with companies working with biotechnology, medicines, and a whole range of similar efforts. These new markets are expanding in neighboring states and should be expanded in Illinois as well, given the advantages here such as those provided by the National Center for Agricultural Utilization Research in Peoria, AgriFirst funds, and work underway in universities across Illinois. Incentives could be provided for the businesses that spring from these efforts to locate in rural Illinois.
Even the elderly population (over age 65) has declined in rural Illinois since 1990, possibly due to inadequate healthcare and other supportive services. Still, elderly people would often prefer to remain in their hometowns and offer their economic resources to their own communities as long as their needs were being met.
Infrastructure. The state can also help with the infrastructure necessary for job creation. This infrastructure includes waterways, airports, railroads, and roads, especially interstate highways; more recently it includes access to high-speed Internet connections. This access has become almost mandatory for businesses to participate in the “new economy.” Access to information technology is essential for business success and can also increase the quality of life needed to attract residents.
Several key concerns face policymakers in formulating a sound state rural revitalization policy. Many of these issues were also raised in other forums such as those conducted by the Governor’s Rural Affairs Council (2001), Rural Partners (1998), and the Illinois Institute for Rural Affairs. 1. Help local leaders create better-paying jobs in rural Illinois.
Workforce Development. A coordinated statewide approach to workforce development is important. A competent workforce is always one of the highest criteria in business decisions about where to locate. Providing training opportunities in conjunction with having an active business location program to work with local economic development agencies could help markedly in rural areas.
Given the problems associated with urban sprawl in the suburban Chicago area, both urban and rural areas will benefit from slowing the population shift to the suburbs. Given comparable economic circumstances, many individuals would prefer to remain in small towns and rural areas. Reasons for this include an awareness that they can count on their neighbors for help, a belief that small towns offer a good
Entrepreneurship. Small business creation is always at the heart of a successful rural development strategy and,
9
increasingly, policymakers are recognizing the important role that entrepreneurship education and promotion can play in starting these businesses. Most job creation in rural communities is likely to occur not from the relocation of a large plant, but, instead, through innovative efforts by residents (Dabson 2002). Expanding technical assistance and capital availability to entrepreneurs in rural Illinois will create new jobs there.
have meant that some rural areas must struggle to retain or attract medical personnel, and others are having difficulty keeping a hospital fiscally sound. A growing lack of dentists is becoming a serious concern, especially in southern Illinois, and a shortage of nurses is already a statewide concern. Because hospitals and healthcare facilities are often the largest employer in the community, the importance of these facilities to the local economy is clear.
Innovative Access to Financing. Rural entrepreneurs and business owners must have access to financing if they are to succeed. Obtaining this access means that they must have effective business plans as well as sources of capital. The Small Business Development Center network and other groups can help with the business plans. Local financial institutions are sometimes not familiar with the business opportunities and, in these instances, a regional venture capital type of approach might be more suitable. In general, access to venture capital tends to be lower in rural areas.
Furthermore, improved healthcare services may allow elderly people to continue to reside in their hometowns. Telemedicine and programs that attract medical staff will help improve healthcare access. The negative impact that differential Medicare reimbursement policies have had on the financial viability of small, rural hospitals has already been recognized, and the Critical Access Hospital program is a positive move. Access to healthcare and other essential services is crucial in preserving the quality of life in rural Illinois. As populations decline in rural counties, it is imperative that public services are coordinated and delivered in an efficient way. In some instances, this may require new approaches involving fewer agencies that deliver services. Work is underway to improve the delivery of public transportation in rural areas, especially in those counties without general public transportation programs. More of these types of activities will be needed if current trends continue.
2. Reduce the financial burden on rural schools and improve quality. Not only is the financial stability and educational quality of schools a quality of life issue, it is also crucial for economic development. Rural areas with high-quality public schools are more attractive to businesses at competitive property tax rates. Yet, many rural schools face declining enrollments and funding. Reorganization is sometimes necessary and is occurring; however, in relatively stagnant rural regions, reliance on property taxes will not generate the necessary resources. Other solutions must be considered, and there are several statewide initiatives underway to help improve the equity of education and more evenly distribute the burden across the state.
4. Protect environmental resources while encouraging economic development. Environmental protection and economic development are often seen as competing goals. In rural areas, however, they can be complementary. For example, income in some rural communities is enhanced by tourists, who are drawn by the scenery and/or the outdoor recreation opportunities. The appeal of small towns is enhanced partly by their scenic amenities. Additional work in the future will be needed to help rural communities find ways to maximize the income potential of available resources while at the same time working with community leaders to preserve the quality of life and environment that is one of their greatest assets for local economic development.
Of special concern in the near future is the growing shortage of teachers (McCaw, Freeman, and Philhower 2002). Differences in pay and workloads will place rural areas at a decided disadvantage in competing with schools in metro areas. Distance learning efforts in the past have allowed remote rural schools to offer classes needed by students for admission to higher education and for them to gain other specialized skills. More innovative approaches will be needed if rural schools are to attract parents of school-age children. 3. Improve local services, including especially for the elderly.
healthcare,
5. Coordinate the delivery of services to rural areas. Informed community leaders are essential to the future of rural Illinois since their decisions will ultimately bring about the needed progress. Many if not most of these leaders are part-time, however, and they often have limited experience with state or federal programs.
Quality of life as a determinant of where people choose to live will become even more important, and while rural areas offer many attractions, it is essential that they provide high-quality public services. Population declines
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Accessing information, technical assistance, and other support is complicated by the numerous programs available plus the above-mentioned unfamiliarity of part-time local officials with governmental agencies. The coordination of program delivery is also made more difficult because of these factors. Delivering state and federal programs in a coordinated fashion will maximize the ability of local officials and leaders to make effective choices regarding policies.
residents would have a much more difficult time accessing the types of help needed. GRAC also helps formulate legislative and programmatic initiatives that extend beyond a single agency, and it serves as a voice for rural constituencies in state government. Rural Partners provides a forum for rural private and public groups to discuss issues of concern and present agendas for state and federal agencies. It works with member agencies to coordinate educational and outreach programs on a diversity of topics of use and interest to select rural constituencies. These programs are of significant value in promoting rural needs and concerns across Illinois. The IIRA works with both agencies to find innovative solutions and to expand the decisionmaking powers of local leaders.
Currently, the Governor’s Rural Affairs Council (GRAC), chaired by the Lt. Governor, works on issues that can, or must, be addressed through a coordinated effort. It was designed as an initial point of contact for rural residents unfamiliar with how to access state government effectively and efficiently. Without this type of intermediary, rural
Conclusions Some areas in rural Illinois are lagging behind their metropolitan counterparts and need assistance if they are to prosper in the future. Carefully designed strategies to increase the number of high-paying jobs, to maintain or upgrade the quality of public services in order to retain populations, to evaluate the most effective and affordable delivery system for public services, and to enhance the compatibility of environmental concerns and economic development will go a long way to help rural Illinois.
Rural areas are important to Illinois for a number of reasons. Now is the time to invest in these areas—not only financially but also with effective well-thought-out policies. Collaboration among elected officials, business representatives, community leaders, and other groups will be necessary. The returns will be substantial for both rural and urban Illinois.
References Colavito, Justin, and Norman Walzer. 2002. Internet purchases by rural residents. Rural Research Report 13(2). Macomb: Illinois Institute for Rural Affairs, Western Illinois University. Crump, Jeff R. 1997. The changing rural landscape of Illinois: Hispanic immigrants in rural Illinois. Rural Research Report 8(6). Macomb: Illinois Institute for Rural Affairs, Western Illinois University. Crump, Jeff R., and Norman Walzer. 1996. Producer service workers in the nonmetropolitan midwest. In Federal Reserve Bank of Chicago report (RE-2). Dabson, Brian. 2002. Strengthening local rural economies through entrepreneurship. In The American Midwest: Managing change during transition, ed. Norman Walzer. Armonk, NY: M. E. Sharpe (in press). Drabenstott, Mark, and Katherine H. Sheaff. 2001. Exploring policy options for a new rural America. Kansas City, MO: Federal Reserve Bank of Kansas City. Economic Research Service, U.S. Department of Agriculture. 2002. Available online: . Downloaded: November 20, 2002. Governor’s Rural Affairs Council (GRAC). 2001. Rural Illinois: Making progress in a new century. Springfield: GRAC.
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Illinois Department of Employment Security. 2002. Local area unemployment statistics (LAUS), Annual averages for counties, 1975-2001. Available online: . Downloaded: March 7, 2002; and . Downloaded: October 15, 2002. Illinois Department of Human Services, Bureau of Employability Development Services. 2002. E-mail to author from Susan Gatlin, Chicago, IL (November 14). Johnson, Kenneth, and Calvin Beale. 1998. The rural rebound. Wilson Quarterly (Spring): 16-41. Johnson, Kenneth, and Norman Walzer. 1996. Rural Illinois in the 1990s: On the rebound? Rural Research Report 7(3). Macomb: Illinois Institute for Rural Affairs, Western Illinois University. Lasley, Paul, and Margaret Hanson. 2002. The changing population of the Midwest: A reflection on opportunities. In The American Midwest: Managing change during a rural transition, ed. Norman Walzer, Chapter 2. Armonk, NY: M. E. Sharpe (in press). McCaw, Donna S., Robert Freeman, and Susan Philhower. 2002. Teacher shortages in rural America and suggestions for solutions. Rural Research Report 13(8). Macomb: Illinois Institute for Rural Affairs, Western Illinois University. Pulver, Glen. 1988. Community economic development strategies. Madison: University of Wisconsin Extension. Rural Partners. 1998. Building a brighter future for rural Illinois: Goals for stronger communities. Springfield, IL: Rural Partners. U.S. Bureau of the Census. 1990. 1990 census of population and housing, summary file 1. Washington, DC: U.S. Department of Commerce. Available online: . Downloaded: July 10, 2002. U.S. Bureau of the Census. 2000. 2000 census, summary file 3. Washington, DC: U.S. Department of Commerce. Available online: . Downloaded: July 3, 2002. U.S. Department of Commerce, Economics and Statistics Administration, Bureau of Economic Analysis. 2002. Regional Economic Information System 1969-2000. Available online: . Downloaded: November 5, 2002. W. K. Kellogg Foundation. 2002. Perceptions of rural America: Congressional perspectives. Battle Creek, MI: W. K. Kellogg Foundation. Walzer, Norman, Chris Merrett, and Mary Holmes. 1999. Agriculture and local economic development. Rural Research Report 10(10). Macomb: Illinois Institute for Rural Affairs, Western Illinois University.
The Rural Research Report is a series published by the Illinois Institute for Rural Affairs to provide brief updates on research projects conducted by the Institute. Rural Research Reports are peer-reviewed and distributed to public officials, libraries, and professional associations involved with specific policy issues. Printed on recycled paper
