US Spending Billions on Rural Jobs, but Impact Is Uncertain

Author: 
Coverage Type: 

The Obama Administration is investing billions of dollars to promote economic development in rural areas by bringing broadband service and small-business financing to regions with chronic poverty and high unemployment.But critics say the administration has little to show for its efforts, which highlight the difficulties of creating jobs in remote areas. They say the money has gone to areas where it is not needed, to promote broadband where it already exists and for industrial parks designed to attract business and jobs that may never materialize.

The Agriculture Department said it had provided more than $6.2 billion to help nearly 10,000 small and emerging rural businesses expand, creating or saving more than 250,000 jobs since 2009. The government’s figures for job creation or preservation are difficult to verify. Still, economists like Lionel Beaulieu, the director of the Southern Rural Development Center at Mississippi State University, said financing for rural programs might have prevented even deeper levels of poverty and unemployment. Either way, the government program underscores the slow, expensive work of job creation at a time when the administration is trying to make rural development a part of its economic recovery policy. While the nation suffers from high unemployment and a weak economy, rural areas have been especially hit hard. The latest Census Bureau figures show that 16.6 percent of rural Americans are living in poverty, compared with the national average of 13.9 percent.
Under the stimulus act, $7.2 billion was allocated for expanding broadband to unserved and underserved areas, most rural.

The efforts have expanded broadband service to more than seven million rural Americans, including three million rural households and more than 350,000 rural businesses. A 2009 Agriculture Department inspector general report found that the agency had made loans to provide broadband in 148 communities “within 30 miles of cities,” including Chicago and Las Vegas, and that 77 percent of all loans had gone to areas that already had broadband access available through private companies.

A report the same year by Northwestern University found that expanding broadband service to rural areas often did not offer the economic benefits promised or contribute to increased salaries or the tax base or create jobs.


US Spending Billions on Rural Jobs, but Impact Is Uncertain