Millennials Could Be a Boon to Smaller Communities. How Can Those Towns Attract Younger Workers?

The skyline of Montpelier, Vermont. Small towns like Montpelier should explore opportunities to attract millennials.

The skyline of Montpelier, Vermont. Small towns like Montpelier should explore opportunities to attract millennials. Sean Pavone/SHUTTERSTOCK


Connecting state and local government leaders

COMMENTARY | Legislators and town leaders need to create incentives for young people to embrace small-town living.

Small towns across the country continue to struggle economically as they grapple with the lingering effects of recessions, aging populations, declines in industry and the economic fallout from the Covid-19 pandemic. These communities need the renewed vitality that comes from an infusion of engaged newcomers. At the same time, a generation of young people are searching for ways to build meaningful lives and careers without the expensive price tag of urban life.

One way for small towns to reverse population declines and accompanying economic struggles is to attract millennials who are growing both their careers and families. Millennials can bring a diverse perspective to local governments, small businesses and other cornerstones of small-town life. Likewise, small communities could provide millennials opportunities to own homes and increase their savings, while enjoying the local culture.

Why Millennials Are Good for Small Towns

Broadly speaking, millennials are socially conscious innovators and entrepreneurs who value community. They range in age from 24 to 39 and are in their peak career- and family-building years. They comprise less than one-quarter of the U.S. population but represent 35% of the workforce—a larger component than any other generation.

Millennials have taken up remote work or freelancing more than other generations, which affords them significant flexibility in their locations, allowing them to do meaningful work even in areas with limited job opportunities. For example, 70% of freelancers say they’re interested in living outside of urban areas, and 69% of younger managers allow remote work. Even if they earn their money from somewhere else, they’ll spend it in town, which boosts the local economy.

Why Small Towns Are Good for Millennials

Despite their majority presence in the workforce, millennials have faced—and still face—financial challenges. For one, they entered the workforce during an economic downturn, so they started off their careers underemployed, underpaid and saddled with crushing student debt. They also continue to experience high rates of unemployment and underemployment, especially given Covid-19's devastating economic impact. These factors only increase the financial burden that student loans and childcare can put on young workers.

The pace of small towns are often a welcome change for millennials already burned out on the demands of urban life. Perhaps that’s why as many as 39% have indicated a preference for living in small towns over big cities. Leaving crowded metro areas means ditching traffic congestion, cramped and noisy neighborhoods and unaffordable housing prices.

And with the current pandemic shuttering mainstays of city life and physical proximity to others becoming dangerous, countless Americans are also questioning why they live in dense urban centers at all. In April, nearly 40% of urbanites said they've considered leaving for less crowded spaces.

It seems like the perfect time for millennials to seriously consider small-town living.

Four Ways to Encourage Millennials to Move to Rural Communities

Although millennials and small communities look like a great fit on paper, the reality is harder to materialize. Legislators and communities alike will need to create incentives that prove their towns are appealing alternatives to cities and suburbs. Here are four strategies that could encourage millennials to take up small-town living:

1. Provide area-based incentives. Attracting remote-working millennials is one approach communities have taken. But many small communities have limited (or sometimes no) access to broadband, making remote work difficult to impossible. Given the large amount of workers now conducting business remotely, fixing this problem will become even more critical in rural areas.

States have started addressing this by providing incentives for small communities to make local broadband investments. These take a variety of forms, such as the statewide broadband plan Oregon is considering that allocates money for enhancing rural broadband or the rural broadband funding Georgia is exploring. With the necessary boosts to limited small-town broadband connections, new and current small-town telecommuters can enjoy workdays without worrying about spotty or unreliable internet connections.

Legislation promoting remote employment is equally important. In Washington, legislators are considering offering tax credits to employers who increase their telework initiatives, which could allow interested workers to move away from urban areas. And in Utah, one bill before the state House would designate a grant for expanding employment opportunities in small towns. Similarly, states have also created rural economic development zones that grant money to businesses to hire new full-time employees—and perhaps attract newcomers.

2. Offer individual and business incentives. Offering financial assistance to individuals is another option for attracting new workers. These individual offerings are certainly a welcome prospect for members of the millennial generation, many of whom have seen their scant financial safety nets weaken even more during this pandemic.

This can come in the form of student loan payment assistance, such as what New YorkMontana and Idaho have done to attract doctors and nurses to rural communities. Similarly, Kansas’ Rural Opportunity Zone Program offers assistance grants that cover up to $15,000 in loan repayment for workers who move to rural counties. Vermont’s telecommuting program offers $10,000 over two years for those who move there but work remotely for a company not in the state. Utah passed, and Montana is considering, individual grant programs to promote workers relocating to rural areas of their states.

For businesses, Nebraska launched the Nebraska Advantage program, which offers financial benefits and incentives for businesses looking to expand in or relocate to the state. This includes its rural development advantage, which provides refundable tax benefits to businesses that add two new jobs and invest at least $125,000 into sparsely populated counties.

3. Encourage rural homecoming initiatives. Programs that celebrate the best of small-town life can go a long way in drumming up enthusiasm for the community and attracting the attention of millennials looking to relocate. For example, Rural Homecoming organizes events intended to reconnect people who have moved away from their hometowns with the community. It also aims to connect young people to the small towns they currently live in. Although the emphasis is on returning to small towns, that doesn’t mean a homecoming can’t draw in entirely new people, too.

4. Revitalize Main Streets.  Kick-starting a revitalization of Main Street by offering economic incentives for would-be transplants could help old and new businesses alike survive what could be a transformed economic landscape following Covid-19. More importantly, these revitalizations can also rebuild a community spirit.

An example of this is Water Valley, Mississippi. About a decade ago, most of the buildings on the town’s Main Street laid empty and forlorn—but one couple’s investment brought life back to the local economy. Bozeman, Montana, is another small city with big plans geared toward Main Street revitalization. The town sees a surprising volume of visitors thanks to its proximity to an interstate, and it plans to revitalize its downtown to maintain its small-town charm.

Millennials can play a major role in revitalizing America’s small communities, but small towns can’t wait for an influx that might never come. By spending money wisely to create attractive opportunities for these younger workers, states and municipalities can begin to transform small towns into hotbeds of creativity, economic vigor and community. Building a plan like this for millennials can serve as a guide for a long-term talent pipeline to attract future generations, like Generation Z and beyond.

Chris Shaffner is the senior vice president of the Water and Community Facilities division at CoBank, a national cooperative bank serving vital industries across rural America by providing loans, leases, export financing and other financial services in all 50 states.

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