Rural Economies Have a Labor Problem. Are Remote Workers the Solution?

Vermont sparked plenty of buzz when it announced it would give $10,000 to organizations who hire remote workers stationed in the state (or are willing to move there).

The move grabbed headlines — including here — and online chatter. But it will take time to see if it nets the desired result: young, working residents.

The offer may seem excessive to some, but it underscores a tough reality facing rural areas like Vermont: years of lagging economic growth and losing skilled workers to cities like New York have rural community leaders fretting about their future. Remote workers could be one way to fix the growing divide, economic development experts say.

A stark split between rural regions and big cities has emerged, starting in 2010. Since that time, rural job growth rose barely 2 percent compared with more than 14 percent for cities of at least 1 million residents, according to the Brookings Institution.  Rural regions across the country are battling this trend. And some are experimenting with new economic development tools — including from repaying student loans, investing in co-working spaces, expanding broadband and job training for remote work — to capture a wave of remote workers.

While proponents say these efforts are bearing some fruit, economic development experts say the programs may not create a tipping point unless there are national policies to help bring remote workers into rural regions.

“It’s a discussion whose time has certainly come and some of that is the real concern over the economies of rural places,” says Matt Dunne, the founder of the Center on Rural Innovation. “The implications are pretty dire if it continues in that direction.”

Broadband access: a chicken-and-egg problem

It may seem ironic that the growth of broadband hasn’t pushed more companies to embrace remote workers. That paradox is due to the growth of agglomeration economies, says Ryan Nunn, the policy director of the Brookings Institution’s Hamilton Project.

“We basically are trying to relieve you of all debt payments for a two-year window. We want to give you a breather.”

“It makes it really valuable for firms to be located near other firms that are related to their business, and to be near a big pool of labor,” he noted. “Then you have a chicken-and-egg phenomenon, with workers moving there because that’s where the jobs are and companies moving there because that’s where the workers are.”
Investment in broadband and co-working spaces that help remote workers set up shop and connect with employers is essential, notes the Center on Rural Innovation’s Dunne, who worked remotely for Google from White River Junction, Vermont for several years. But turning a profit on a co-working space in a rural region may be difficult, which is why nonprofits and government programs have a role to play, he says.

“It’s going to be necessary for nonprofits and others to understand the value of this kind of modern-day commons as being critical for allowing people to have aspirational jobs from anywhere,” he notes.

“Come Home” Award

One rural community with an unusual approach is Michigan’s Huron County. Located more than two hours north of Detroit, the county has steadily lost residents since the 1970s. That prompted the county’s St. Clair Foundation to brainstorm how they could bring workers back.

“Some of our donors were criticizing our front-end [college] scholarships because they seemed to pay people to move away from home,” says Randy Maiers, CEO of the foundation.

Their solution: A reverse scholarship that provides $15,000 to pay off student loans for college-educated adults in their 20s who move to the county for work. The foundation sends the funds directly to their lenders over a two-year period.
“We basically are trying to relieve you of all debt payments for a two-year window,” which helps young adults save for a home and get their footing, Maiers adds. “We want to give you a breather.”

“I don’t think everything can happen over the phone or video conference.”

What it’s like to work remotely

Even though telecommuting is on the rise, 95 percent of jobs are dependent on location, according to FlexJobs. That means workers may work from home a day or two per week, but still commute to a home office.

Employees who work remotely in rural areas say there are challenges and opportunities to giving up a city office.

“I don’t think everything can happen over the phone or video conference,” notes Annaliese Griffin, a writer for the lifestyle news site Quartzy. “I do try to come down to the city on a pretty regular basis to see people face to face.”

Griffin, who grew up in Vermont, says she decided to move back to the state after working in New York City and starting a family there. Living outside New York provides new perspectives – as well as a better quality of life, she says.

“Here we have so much more space, and our wiggle room with money is much greater,” she says. “We’re able to go into the backyard and it’s green and relaxing in an authentic way.”

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Rethinking the development approach

Economic development has traditionally focused on persuading companies to relocate, says Mark Lautman, founder of the non-profit Community Economics Lab in Albuquerque. But that can prove challenging for some rural communities struggling with declining populations.

“If you see over the last 20 to 30 years that the population is going down and it’s because the workers are leaving, and then you don’t see any plan by the community to turn it around, you won’t invest there,” he says.

But remote work offers a different way for economic development officials to approach the problem, he says.

“There is an unlimited amount of solo independent jobs,” he notes. “They run the gamut from gig economy workers who have their own businesses to artists and writers.” But, he says, creating programs to attract those workers to rural regions means creating a new mindset about investment.

“Are the people in that community willing to do it, though?” He adds, “Are they willing to move money from a shrinking pot of funding to this effort?”