The State of Rural Development

Governor Kathleen Sebelius mentioned in her State of the State message to the Kansas Legislature and citizens that, in response to the economic recession of 3 years ago, the state's: politicians, policy-makers, business and community leaders, etc. (pick one or more or add your own) "made a commitment to ... promote investment in rural areas." Continuing on the subject of rural development, the Governor said, "I believe we must continue to encourage development in our state's rural areas, and we must help all businesses by giving them an incentive to create jobs in Kansas." And then, she went on to propose eliminating the property tax on new business nachinery and equipment. However, she did not connect the dots, namely, offer property tax exemption for new business machinery and equipment only in rural areas where she says investment should be promoted. What happened to the commitment to rural development? This is obviously a question of semantics and definitions.

Perhaps, the better question to be asked is, how feasible is rural development? In some economic models, the hinterland (rural areas remote from metropolitan centers) is traditionally a place of ample, low-cost labor for manufacturing assembly work and for the extraction or production of raw materials. Kansas has plenty of hinterlands with an adequate road network and water resources. But, they are being depopulated primarily by net out-migration due to lack of jobs, caused by shrinking agricultural employment. Is the critical mass of labor necessary to sustain economic development that involves investment in business machinery and equipment present? Many would argue 'Yes', citing labor availability studies that recognize a rural plant site's ability to draw workers from a wide area and by giving the work force credit for older, yet still able workers. Nobody would sanely assert that rural development in not feasible from the standpoint of availability of labor and other critical resources.

However, for rural development in terms of job growth to be possible, there must be a demand for manufacturing assembly work in rural areas. With all the out-sourcing of manufacturing asembly jobs to countries with cheap labor, the traditional concept of the hinterland has been drastically altered. No longer is it just those areas outlying metropolitan centers. Low cost sea, rail and truck transportation has redefined the hinterland to include any region with cheap labor. The wage differential between plants in U.S. rural areas and foreign factories is great enough that the cost of transportation still favors out-sourcing to the far reaches of Earth. Markets for manufactured goods have also been globalized, making cheap transport, efficient distribution, and low-cost labor an inter-related phenomenon. There doesn't appear to be any way to reverse the trend in job location that manufacturing has taken. Certainly, the actions of a state by itself will not influence the creation of base employment. The federal government, working in concert with the states, could possibly have some small measure of influence to create more jobs for rural areas. But, there is no panacea.

Rural areas need to start thinking that fewer is better, rather than try to recoup past population numbers. The available resources in rural areas has not shrunk. Greater productivity allows fewer people to operate larger farms. Central retail and service outlets provide greater selection and affordability of goods and services. State development assistance should be focused on rural economic centers, rather than extending imited resources to all towns and villages, using poverty as the primary measure of need. The low-income measure of federal policy, which is aimed at urban areas, is counter to the needs of the rural areas as a whole. There are more votes in the rural economic centers than in the remnants of once prosperous, but now decaying, villages. An effective rural development policy for Kansas would capitalize on the assets of rural Kansas, and not subsidize liabilities left over from an agrarian society that will never be revived.

An important question is, what type of development does the Governor envision for rural Kansas? Indeed, what do most Kansans see as the future of our hinterlands. Job creation through non-agriculturally related enterprises is unlikely. Tourism has made giant strides, but except for special niches, like hunting and fishing, rural areas still lack popularity as a vacation destination. The housing stock is aging overall, despite substantial new residences that grace many farmsteads. Thanks to forward-looking construction and maintenance programs, the rural highway infrastructure is a serviceable asset. Rural schools are by-and-large modern and adequate through state financial assistance in school construction. Facilities for health care such as hospitals, clinics, and a variety of life care housing are in general modernized. Municipalities provide many recreation amenities. Rural counties have up-to-date law enforcement and jail facilities and renovated public buildings. Basically, the development needed in rural Kansas is more of the same, modernization and replacement of basic facilities and additional sustainable amenities, but only in economic centers that can sustain themselves.

Actually, the state should be strongly promoting better quality housing in rural areas by pro-actively eliminating sub-standard housing. Fewer houses of higher average quality simply recognizes the population loss. This would also prevent in-migration of low-income residents who are attracted by low-cost, sub-standard housing. Reducing the low-income rural population relieves and prevents strain on rural social support systems of all sorts from law enforcement to welfare, programs that are more economically and efficiently provided in urban centers. Preventing in-migration of people who are dependent on employment incomes, reduces the need for job creation in rural areas, which is unlikely at best. At the same time, mobile home and manufactured housing development should be prevented, except for farmsteads.

Although a connection between meth labs and sub-standard housing is probably not statistically documented, intuitively it exists. Doesn't it make sense that high numbers of meth labs in Kansas and other states with extensive rural areas is connected to the availability of low-cost housing. Eliminating sub-standard rural housing would dry up the places where illegal drug production can occur. At least it would force illegal meth labs to gravitate to areas more readily observed by law enforcement. The State of Kansas should discourage habitation of sub-standard properties.

Somehow, I doubt if any of my suggestions for curing the malaise of rural Kansas will be considered during this coming legislative session. The commitment to rural development without specific workable proposals is nothing more than lip-service, empty promises to placate bygone dreams.