The Changing Economy of the Rural Heartland

T he economy of the rural, or nonmetropolitan, Heartland has undergone great change over the past 15 years. Deep recessions in agriculture and energy, restructuring in manufacturing, and the emergence of the service industry are just some of the forces that have reshaped the rural economy of the nation’s midsection. Having shared in this economic transition and now facing a common economic future, the states of the rural Heartland form an identifiable economic region. For the purposes of this book, the Heartland is defined as the 12 states that stretch from the Mississippi River to the Rocky Mountains and from Texas to Canada. These states include Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, and Wyoming. (Figure 1). After a dismal decade in the 1980s, the economy of the rural Heartland has recovered somewhat. Nevertheless, questions linger about the Heartland’s future. Although economic indicators have picked up on average, much of the new rural growth is in counties with scenic amenities or in emerging trade centers that draw much of their strength from surrounding counties. Many counties in the rural Heartland, meanwhile, remain in steep economic decline, with dwindling populations and growing fiscal problems. Farm-dependent and some remote counties appear to be facing particular economic challenges. In short, many observers wonder if the economy of the rural Heartland will trail the national economy in the period ahead. Concerns over future growth have prompted business and government leaders in the Heartland to reconsider the region’s future. As leaders look ahead, it is useful to answer three basic questions. • How is the region’s rural economy changing? • Why is it changing? • And, what are the policy options for boosting rural growth in the future? The purpose of this book is to answer these questions. This introductory chapter reviews the recent performance of the Heartland’s rural economy and explores the region’s outlook. The next three chapters examine changes at work in three of the region’s main sectors—manufacturing, services, and agriculture. The fifth chapter considers the fiscal challenges facing state and local governments in the region. The final chapter evaluates the policy choices facing the region’s economic development officials.