Editor's note: The following article is a continuation of research
on the rural census in the Ninth District. See previous articles in the
In the battle for growth, some rural counties seem
to have all the right stuff.
Lake County, Mont., for example, is the lap of scenic luxury. Located
in the upper western portion of the state, Lake County is home to
most of Flathead Lake, the largest freshwater lake in the western
United States and reportedly one of the cleanest. Look to the east,
and you're staring at the Mission Range of the Rocky Mountains;
turn north, you'll see the high mountains of Glacier National Park.
The Bitterroot Range and Cabinet Mountains lie to the west and northwest.
Sharon Procopio sits in that lap of luxury. She is a vice president
and manager of the Glacier Bank branch in Polson, Mont., population
4,000, which lies at the foot of Flathead Lake. Procopio has an
office "about 50 feet" away overlooking Flathead Lake,
she said. "I have probably the best office in the U.S."
Procopio came to Polson in 1993, one of many others attracted there,
at least in part, by the natural splendor common throughout much
of western Montana. During the 1990s, Lake County's population grew
by 26 percent, to almost 27,000. While many small rural towns in
the district have languished, Polson has grown about 20 percent
in each of the last two decades, despite being better than an hour's
drive or more from the regional centers of Kapispell to the north
and Missoula to the south.
As baby boomers near retirement, as folks of all stripes pursue
leisure, and as telecommunications and other advances make the geographic
proximity of home and work less important, the pundits and prognosticators
said beautiful rural areas would reap much of the benefit. People
are going to get out of the rat race, they said, and into something
more comfortable and aesthetically pleasing.
In fact, that does appear to be happeningpeople are moving
to rural places with high natural amenities. The lure is obvious.
"You want to be able to sit on your deck and watch the sunset
over the lake," said Al Hanley, executive director of the Minocqua-Arbor
Vitae-Woodruff Chamber of Commerce in northern Wisconsin, a region
home to some 2,300 lakes, streams and other small water bodies.
The area has been a northern getaway since the 1920s, "when
the rich and wealthy people from Chicago, Milwaukee and Madison
found it was a good place to get away from the city," Hanley
said. Those with a slice of that heaven often tell their friends.
Steady transportation improvementsa four-lane freeway has
been slowly creeping north and is now just 20 miles short of Minocquahave
accelerated the pace of development in the area.
"Our biggest marketer is the [Department of Transportation],"
Hanley said. Easier access has cut the trip from Chicago from about
eight hours to five or six. Hanley ought to know because he got
recruited from Chicago about a decade ago, becoming part of the
16 percent population growth in Oneida County during the 1990s.
Real estate buying pressure in the area has continued unabated despite
the downturn in the economy, and prices seem to have no leash. Hanley
said one local real estate agent had closed on about $11 million
in sales in just the first eight months of the year. "It's
amazing. They [buyers] still continue to buy at the prices [sellers]
ask, and as long as there's a buyer, there's going to be a seller."
Yes, come closer
In the 1990s, many rural counties lost population,
but many others managed to grow. The full reasons are complex, but
there appears to be a link between rural population growth and the
presence or absence of natural amenitiesnamely, the amount
of water and forest in a county, and the presence of hills or mountains.*
Anecdotally, at least, that is the case made by many in rural America,
among both the amenity haves and have-nots. But there's more to
this scenic picture than meets the eye, and not all of it's pretty.
Research by the fedgazette investigated the effect or correlation
of natural amenities on population migration and income growth in
rural counties. A closer look found:
Weak population-to-amenity correlations among all counties.
Across all 274 rural counties in the district, there was only
a small correlation between a county's water or forest area and
its population growth.
Strong population correlations among the natural amenity
"elite." The 10 percent of rural counties with the
highest amount of water surface or forest, as well as those counties
with significant hills or mountains, saw population growth that
was much higher than the rural county average.
Weak income effects. Counties with the highest amount
of inland water saw income grow slightly faster than the rural
average. But across all counties, the "water effect"
had no significant impact on income. What's more, the top 10 percent
of forested counties, as well as counties bordering a Great Lake,
saw slightly slower-than-average income growth. Hilly and mountainous
counties saw income grow at a considerably slower pace.
Other research has found generally similar relationships
between natural amenities and population migration. Kikuo (Rocky)
Oishi, an economics graduate student at the University of Minnesota,
found that natural characteristicsrelative size of water surface
area, cooler summers and warmer winterswere all factors related
to population growth in Minnesota and its neighboring states.
A 1999 study by David McGranahan of the Economic Research Service,
a data arm of the U.S. Department of Agriculture, said that "[rural]
county population change is more highly related to these natural
amenities than to urban proximity, population density, or economic
type, although these too play a role."
Recent research by McGranahan and ERS colleague Calvin Beale found
that remote counties with small populations and few natural amenities
"were especially likely to lose population during the 1990s."
One reason, they said, was the quality of life in these locations.
"[T]hinly populated areas are difficult to live or do business
in, absent compensating natural amenities."
McGranahan also looked at the amenity effect on population in the
1980s, a period of profound strife in much of rural America. He
found that amenity measures were less effective as a predictor of
population growth during this decade, but suggested that "the
pull of high amenities is greater than the push of low amenities."
AVERAGE PERCENT CHANGE
IN POPULATION 1990-2000*
AVERAGE PERCENT CHANGE
IN PERSONAL INCOME
PER CAPITA 1990-2000*
use a simple average, that is, the sum of variables in each
county, divided by total number of counties.
** Does not include counties bordering a Great Lake.
Sources: U.S. Department of Agriculture, U.S. Forest Service,
Bureau of Economic Analysis, U.S. Census Bureau
In some cases, amenities appear to work in concert.
Many people, for example, are drawn to mountains and other scenic
vistas. But in fact, fully 20 rural counties that are designated
as hilly or mountainous in the district (a total of 55) lost population
in the 1990s, almost exclusively in Montana and North Dakota. The
"x factor" appears to be forests. Only three of the mountainous
counties that lost population had a forested area of more than 10
percent. By contrast, among the 35 mountainous or hilly counties
that gained population (mostly in Montana, but a handful in other
states) 28 were at least 10 percent forested, and most had a much
Careful what you ask for
Sparsely populated counties with poor natural amenities
appear to be on a slippery slope. Without natural amenities, family
connections are the mainindeed, onlydraw for some counties
to bring new people to town. As more residents leave, these critical
family connections get cut off. If there is nothing to attract labor,
there is also little to attract new businesses. Young people and
families facing meager opportunities decide to go elsewhere, and
the cycle continues.
By implication, amenity-rich counties have an inherent advantage
over their have-not peers in attracting people and importing economic
activity, and numerous sources acknowledged the advantage. But maybe
the most notable paradox is that comparatively strong population
growthitself considered a measure of well-beingin the
district's amenity-rich corridors did not translate into overwhelming
Go back to Lake County, Mont. It ranks among the top 10 percent
of counties in water and also, with its Rocky Mountain location,
has scenic vista status. Per capita income in Lake County grew just
34 percent during the 1990s, a rate that barely outpaces inflation
over the same period and is one-third less than the average for
all rural counties in the district.
But as one Montana saying goes, you can't eat the scenery. In a
way, the county tried, as it used to have many more good-paying
logging and mining jobs than it does today. "The environmentalists
have pretty much shut us down on that," said Procopio, who's
also head of the local chamber. State figures show that only about
325 people were employed in mining and lumber in the county as of
2000, or about 4 percent of total employment. It's been a struggle
to replace the wages of those lost jobs, in part, because "there's
no industry to speak of here," Procopio said.
But another reason for poor income growth in Lake and many other
high-amenity counties is the seasonal tourism economy that has replaced
natural resource extraction industries of years past. While seasonal
residents and tourists bring valuable activity to a region, they
have limited firepower as an economic engine.
Show me the money
It's not that there are no jobs. In fact,
there are plenty, as employment growth actually outpaced population
growth in most high-amenity counties in the 1990s.
In Crow Wing County, Minn., in the heart of a lake-laden region
known as the Brainerd Lakes Area, population grew a healthy 24 percent
in the 1990s. But employment grew almost twice as fast, adding more
than 10,000 jobs, according to census data.
The problem, some people point out, is that employment growth is
dominated by the low-paying retail and service sectors. In Crow
Wing, construction, real estate and finance, and manufacturing all
saw healthy gains in employment. But combined, they added only half
as many jobs as the service and retail sectors. Data from the local
chamber also showed that annual service and retail wages were well
belowby $5,000 to $18,000those of other major employment
sectors in the county.
Ravalli County, on the middle-western border of Montana, saw its
population grow by 44 percent in the 1990s, tops in the state. Most
of the credit goes to the Bitterroot Valley, a banana-shaped, postcard-beautiful
region that runs through the heart of Ravalli County. The valley
is wedged between the Bitterroot Mountains to the west and the Sapphire
Mountains to the east, a span about 25 miles wide that runs north
about 100 miles toward Missoula.
"People are moving here full time because it's very beautiful,"
according to Elaine O'Leary, program operator for the Bitterroot
Job Service Workforce Center in Hamilton, Mont.
Jobs are following that influx of people, as nonfarm employment
grew by 67 percent, or almost 6,300 jobs, during the 1990s and unemployment
dropped from 8.4 percent to 5.2 percent. But that job growth hasn't
changed the local economy much. Most openings in the county are
geared toward retail sales and service jobs, O'Leary said. "With
the influx of people, there have been more of those types of jobs.
... There's not much industry growth."
There is some good news, as construction employment in Ravalli grew
by about 160 percent, or 1,000 jobs, in the 1990s. But manufacturing
added only about 300 jobs, while retail added 1,300 new jobs and
service 1,800 jobs. Combined, retail and service jobs make up almost
55 percent of all private employment in the countytrue to
O'Leary's word, unchanged from 1990.
Meanwhile, average incomes have lagged, growing
just 39 percent in the 1990s. At less than $19,000, it's just 64
percent of the national average. Maybe worse, per capita income
in Ravalli stood at 73 percent of the national average as recently
That wage reality takes many newcomers by surprise. If they moved
there "with all their bills paid," then they tend to stay,
O'Leary said. But those who moved to the valley without jobs "probably
didn't do much research" before coming and often don't stay
long. "Some are lifers. ... Some come and discover wages [or
job opportunities] are not what they expected and end up moving
Montana is not alone on that amenity-rich, income-poor
scale. On a map, Luce County appears isolated on the north shore
of Michigan's Upper Peninsula, closer to Canadian caribou than to
lower Michigan. Heavily forested and looking out over Lake Superior
to the north, the county saw growth of 22 percent in the 1990s,
which doesn't count the flood of tourists and seasonal residents
into Newberry and other small county towns during the summer. But
per capita income rose a mere 9 percent, barely eking over $17,000.
Keweenaw County is a northern peninsular tip in the U.P., with significant
amenities in water, forest and hills or mountains. It managed a
fulsome 35 percent increase in its population in the 1990s, though
it still stands at 2,300. It achieved other successes as well, with
employment more than doubling during the 1990s, which helped cut
unemployment almost in half to less than 8 percent in 2000. But
per capita income rose a mere 27 percent and stands at just $18,300.
The city and county of Custer, S.D., saw their populations decline
during the 1960s. While the city has rebounded only somewhat, the
county has seen its population grow by 50 percent since 1970, including
a 16-percent gain during the 1990s, one of the fastest growth rates
in the state. The Black Hills were central to that rebound.
"I think you could say that," said Gordon Heggen, the
mayor of Custer and owner of a laundromat, video and tanning business.
"The aesthetics of the area, that's pretty much all there is."
Heggen has lived in South Dakota for 24 years, and 14 years in Custer,
but grew up in Colorado. "Came here on vacation and never left,"
Heggen said. "In the Rockies, a person can be overwhelmed by
the grandeur. Here [in the Black Hills], it embraces you."
The local economy is very dependent on tourism, as Heggen ticked
off a list of local natural attractions that included the Crazy
Horse Memorial, Mount Rushmore and Custer State Park. More traditional
businesses have had trouble taking root. For one, water in the area
is very expensive because of supply problems, which all but eliminates
many manufacturers from considering the county. "There's not
a lot of push for [traditional industry]," Heggen said. Average
income growth in the 1990s was 36 percent.
Oneida County in northern Wisconsin fared better than average on
wage growth57 percent during the 1990s, reaching almost $26,000.
Nonetheless, Hanley, the local chamber head, said the area needed
more living-wage jobs. "The local economy as far as income
is probably not the greatest because we're based in tourism ...
[and] tourism is highly underpaid." Hanley said. "It's
the same story. You can't continue to pay someone $6.50 an hour
and then expect them to work 60 to 70 hours a week, and with very
little gratitude" from owners.
The lure of amenities can also have some cruel twists for a local
tourism economy. High demand for real estate means the days of
old-time resortsa main lodge with four to six cabinsare
numbered, according to Hanley. It's not uncommon for someone to
resortsometimes for $1 million or moreand then either
sell off each cabin or bulldoze all of them to put up a new house.
While that might look like a spark to the local economynew
construction, more local property ownersultimately it has
a deadening effect, Hanley pointed out. Resorts typically have much
higher occupancy rates than seasonal residences, owners of which
might not be in town for more than a week or two during summer.
One local resort sold out this year, and "we lost 500 to 600
people" in terms of overnight stays, Hanley said, which hits
restaurants and other tourism-based businesses particularly hard.
See map: Recreational
counties concentrated in amenity corridors
Point us in the right direction
Though high-amenity counties might not have the
world by its economic tail, most seem to believe things are on the
right path regardless of what challenges might accompany a seasonal
Hubbard County, Minn., is home to the world's biggest muskellunge
(that's a fish, for you city slickers), as well as one of the largest
population increases among rural counties in the 1990s, at 23 percent.
Historically, tourism has always been a big part of Hubbard's economy,
and growth "has always kind of been there, but on a slower
pace," said Floyd Frank, a Hubbard County commissioner and
owner of the Round Bay Resort near Nevis, Minn., for the past 22
But the confluence of cheap land, particularly on Hubbard's many
small lakes, and a retiring baby boom generation fueled strong growth
in the 1990s. "This is just a great place. ... It's finally
been discovered as other areas [closer to the Twin Cities] become
saturated," Frank said.
Once upon a time people would note how cheap lakefront property
was in the area. "We don't hear that anymore." Six or
eight years ago, $40,000 could buy a cabin on a lake in Hubbard
County, according to Frank. "Now you don't even find a lake
property [without the cabin] for that. It's kind of spendy right
Nonfarm employment grew by 57 percent, adding 3,200 jobs to the
local economy and slicing the county unemployment rate from 9.4
percent to less than 6 percent. Average income went from $13,300
to more than $20,000at 54 percent, the increase was slightly
better than the rural average.
Frank said the area is a good place to be if you're an independent
contractor digging septic systems or doing other work related to
the area's housing boom. It used to be that contractors worked half
the year "and then they do their ice-fishing," Frank said.
No more. "They're too busy now."
A sunshiny day, whatever the weather
That's not to say amenity-rich counties are
without their own unique problems. Frank said Hubbard County is
dealing with a variety of issues related to the influx of retirees,
including long-time residents fighting change and relative newcomers
fighting the wannabe newcomers.
A source in a neighboring Minnesota county said many residents still
consider the county to be rural, but "the problems we're dealing
with are much more urban" in nature, including the need for
improved sewer infrastructure to protect local lakes and a shortage
of affordable housing.
RURAL COUNTIES IN TOP AND BOTTOM
30 PERCENT IN BOTH POPULATION
AND PER CAPITA INCOME*
(Based on Percent Change 1990-2000)
|* Calculations use a simple
average, that is, the sum of variables in each county, divided
by total number of counties.|
Sources: U.S. Department of Agriculture,
U.S. Forest Service,
Bureau of Economic Analysis, U.S. Census Bureau
The September issue of the
fedgazette analyzed 274 rural counties in the district,
ranking the performance of these rural counties on both population
growth and per capita personal income growth. In an effort to
investigate why some rural counties do well and others do not,
counties ranking in the top or bottom 30 percent on both measures
were than analyzed more closely to see what commonalities and
growth correlations could be found.
(See September fedgazette.)
As an extension of that research, top- and bottom-performing
counties were analyzed for average amount of water and forest
area. The results show that top-ranking counties have significantly
more of each natural amenity than bottom-ranking ones. In
fact, average amenity levels for top counties were not terribly
high; rather, there was a dearth of natural amenities in bottom
But at the end of the day, many rural counties
are only too happy to have such problems, because it beats the alternativeno
growth, period. Without tourists and retirees, some counties would
likely vanish economically, evident in the fact that many small
rural counties without natural amenities are vanishing, at least
in a population sense. Most of eastern Montana lost population in
the 1990s, and half of North Dakota's counties lost at least 10
percent of their population. Many rural counties hit their population
peak 60 to 80 years ago and have been on a steady decline ever since.
Frank said the increase in retirees has helped offset a stagnating
number of families and school children. "In doing that, it's
started to stabilize our economy," said Frank, adding that
new commercial and retail activity has followed, providing jobs
for the families that are still there.
O'Leary, from Ravalli County, suggested that things would be worse
there were it not for the natural surroundings. "I think we
probably would not have the influx of people and definitely not
the tourists," O'Leary said. "We'd probably be more economically
depressed if it weren't for how the valley looks."
Procopio, talking from her office overlooking Flathead Lake, said,
"I think all of us wish we could increase [business and] develop
things that would improve things in the off-season. ... We're not
grim [in our outlook] at all. We just wish we could do more."
In the Brainerd Lakes Area, home to 400-plus lakes that cover 100,000
acres in five counties, there are signs of a more year-round economy,
like small retail shops that are staying open longer into the fall
and winter season and have longer store hours, according to Lisa
Paxton, head of the Brainerd Lakes Area Chambers of Commerce. But
there is a lot of room for improvement in the local economy.
"We still need more living wage jobs ... and we need a better
connection between seasonal homeowners and the rest of the community,"
she said. "The message is, 'We're growing, but we can grow
The hump, if you will, for high-amenity counties might be in accepting
their place in the continuum of people's lifestyles and knowing
when and how to capitalize. "We're not a community for single
people who want activity. This is not downtown Minneapolis. ...
If I were 18, I'd get out of here too," Paxton said. "But
10 years later, these people are looking to come back."
And counties are trying a host of strategies to do just that. One
engineering firm told Paxton that their best method of recruiting
was to place an ad in the local paper. "The parents see the
advertisement and they say [to their kids elsewhere], 'Come back,
bring the grandkids, we've got a job for you.'"
See map: Recreational counties
concentrated in amenity corridors.
Rob Grunewald, regional economics analyst, and Nisha Lima, research
assistant, assisted with research and data analysis for this article.
*Data on water surface
area comes from the 2000 census. Rural counties bordering a Great
Lake (18 in all) were omitted from the calculations of the top 10
percent of counties for water area because these counties were assigned
significant portions of the water area of lakes Superior and Michigan,
thus distorting each county's water area. Data on forest area come
from the U.S. Forest Service and are a measure of all public and
private land with harvest-size timber that is not designated as
underdevelopable wilderness. Topographical categorization for hills
and mountains comes from nationwide research on land form topography
published in the 1999 report, "Natural Amenities Drive Rural
Population Change," by David McGranahan, Economic Research
Service, U.S. Department of Agriculture. McGranahan used the 1970
topography scale from the National Atlas of the United States of
America, U.S. Department of the Interior.