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The US unemployment rate has hit a nearly 50-year low. And five of the 10 states with the lowest unemployment are also among the most rural of states, including North Dakota. Yet that poses the challenge of finding people to fill new jobs. Large swatches of the rural countryside are losing population or barely holding their own. As a result, rural communities are trying creative ways to cope. In Devils Lake, N.D., local businesses have just agreed on a tuition reimbursement program for high school graduates who promise to return and work after getting a technical degree. The idea: If they come back for a job, they’ll stay and raise families. Fully 80 percent of tuition will be covered, mostly by each student’s sponsoring business. It’s costly for these small employers. But Brad Barth, head of the local economic development corporation that will act as a cosponsor, says, “We talked to 15 businesses in two weeks and they were all in.” Doug Darling, president of the local Lake Region State College, says that “if we work together on these things, I think it’s going to help.”
Dick Prozinski taps his cluttered desk with affectionate nostalgia.
“I’d have 100 [job] applications on my desk at all times,” says the Devils Lake, N.D., restaurant owner. Now, “you almost have to beg people to fill out an application.” Between his two eateries, he’s short seven or eight trained cooks.
Ditto for Kyle Blanchfield, owner of Woodland Resort on the shores of Devils Lake, the state’s largest natural lake and renowned for its fishing. If he could hire four or five more trained customer-service managers, he says he could boost business 20 percent.
The worker shortage that is affecting companies across the country is hitting rural America with a double-whammy. Last month, the economy added 250,000 new jobs, the Labor Department reported Friday. And there’s evidence that, confounding expectations, rural and small-town America are now seeing slightly faster job growth than metro areas.
There’s just one problem: While the strong economy is boosting the number of jobs, large swatches of the rural countryside are losing population or barely holding their own. As a result, rural communities are trying creative ways to cope with the worst labor shortage in decades.
Some offer to help pay for housing for workers who move in. Others are revamping their downtowns to attract millennials. Here in Devils Lake, a group of businesses have just agreed to a tuition reimbursement program for high school graduates who promise to return and work. The idea: If they come back for a job, they’ll stay and raise families.
“We have tried in the past to bring in new business; maybe that wasn’t the right approach,” says Ryan Hanson, principal of the local high school. “Maybe we should be strengthening what we already have.”
College costs in exchange for work
Under the new program, a business would partner with a high school senior who is interested in a one- or two-year technical degree. The business would pay 60 percent of his or her college costs and Forward Devils Lake, the area’s economic development corporation, would kick in another 20 percent. In exchange, the student would agree to work for the sponsoring company for three years.
That’s a sizable investment for small businesses. With tuition, room, and board at North Dakota two-year schools costing anywhere from $11,800 to $14,100 a year for residents, the tuition reimbursement could cost them nearly $17,000. But that hasn’t dampened initial enthusiasm for the plan.
“There’s not enough students in North Dakota, with the declining enrollment,” says Brad Barth, the economic development executive who dreamed up the idea. “So when a program comes along like ours, [local companies] are in…. We talked to 15 businesses in two weeks and they were all in.”
Business owners say it’s worth the investment.
“Most of our shortages come from our network technicians,” says Dave Dircks, CEO of North Dakota Telephone Company, which offers cable and internet as well as phone service in the area. He’s interested in sending students to a South Dakota technical school, whose program fits his operation to a T, down to using the same equipment. “If you get an individual out of there, he can basically step in” and start working, he says. (The students aren’t limited to in-state schools.)
There are signs that the rural economy overall is improving. Five of the 10 states with the lowest unemployment are also among the most rural of states, including North Dakota. And for the first quarter of this year (the latest figures available), a Brookings Institution study found that rural and small-town America were growing jobs at a slightly faster pace than large metros.
The challenge is that these averages mask big differences among rural communities. In North Dakota, for example, the oil and gas industry in the western part of the state has boomed, creating new jobs and attracting out-of-state workers. Here in agriculture- and tourism-based Ramsey County, the 2.2 unemployment rate looks strong, but it’s the result of a labor force that has shrunk faster than employment has. The county now has fewer jobs than during the worst of the Great Recession.
Devils Lake saw its employment boosted temporarily by construction, which has brought a new viaduct and a string of retail businesses on US 2, which runs through town. But workers were in such short supply that local firms poached employees from one another.
“All they did was rob Peter to pay Paul; it was almost like musical chairs,” recalls Doug Darling, president of Lake Region State College, the two-year college in town. When the Burger King first opened, he twice had to go through the drive-through because there weren’t enough workers to staff the dining area.
The lack of available employees also makes it hard for new businesses to come to the area, Mr. Darling points out. “They look at the unemployment rate, they look at the workforce available, and they're going: ‘We can’t see locating here because you guys don’t have a workforce for us.’ … [But] if we work together on these things, I think it’s going to help.”
For the first year, Mr. Barth of Forward Devils Lake is hoping to get five seniors to sign up. By 2020, he hopes to have 20 from the high schools in the region.
“I think he could probably get his five,” says Jean Baird, a school counselor at the high school in Devils Lake. Of its 480 or so students, some 50 to 60 percent go on to a technical school. “The tough part is going to be matching up the student with the appropriate business…. Committing to three years [of work] after college sometimes scares some of the kids.”
Local business owners, like Mr. Prozinski, are ready to make their pitch. “If I had more help,” he says, “I would love to open a bistro downtown.”