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• Investing in Rural America

Transcript

Tim Sablik: For the seventh annual Investing in Rural America conference, the Richmond Fed worked with the Federal Reserve System, Rural LISC, and other community partners to bring together community development practitioners, financial institutions, policymakers, researchers, and rural leaders from across the country. The theme of the three-day event in Asheville, N.C., was "The Strength of Rural Places," highlighting the people, institutions, and strategies that power rural economies.

In today's episode, we'll take a look at one of the main topics covered at the conference: how rural communities support the development of their local workforce. First, I spoke with Sarah Gunn, a district outreach manager at the Richmond Fed, who leads a team focused on workforce pathways.

Why was workforce development one of the main topics at the Investing in Rural America conference?

Sarah Gunn: To me, a region's people are its biggest, most fundamental strength. The people in a region make up the community. They provide the vision and drive, and serve as the leaders. The workers are necessary for the region's ability to achieve its goals. The work they do is the driver for how the region's other assets get leveraged.

Sablik: What are some of the different considerations that rural places in particular have to make when it comes to fostering human capital development?

Gunn: Many of the considerations that rural and small towns face in workforce development are fundamental to what makes rural and small towns special.

For example, rural and small towns tend to have further distances to travel for most things. But included in that are accessing training programs, access to jobs and schools. So, you just have to factor in transportation and the time it takes to get places into offering any programs to accomplish workforce goals.

You also have to consider that rural areas tend to have fewer employers or more smaller employers, which may limit how many career pathways are available within a community or the capacity of those employers to offer employer-sponsored training programs.

I also want to highlight that school systems are often more constrained in rural places and play a more comprehensive role in their community. Individual students might not have access to role models who have pursued different career and education pathways.

As we're developing different programs to address workforce constraints in rural areas, we have to design our programs with those considerations in mind. It's important that programs are designed specifically for the rural communities they serve to meet their needs, and we're not just taking programs that work in an urban or suburban context and applying them in a rural area.

Sablik: Alex Ruder, an assistant vice president of the Atlanta Fed's community and economic development team, spoke at the conference about the importance of carefully thinking through the incentives and disincentives created by rural workforce programs.

A lot of your own research has been around benefits cliffs and how workers interact with those. I was wondering if you talk a little bit about how policies that are intended to help workers navigate job transitions — unemployment benefits, those sorts of things — can create frictions in that process.

Alex Ruder: A very traditional way to think about job training and workforce development — and this is a way that I used to think about it — is that a worker comes into a nonprofit or a job center or a technical college and asks a coach what should I get training in. That worker might look at how much do these jobs pay. But the problem is on paper what it looks like they're going to make might not actually translate to how much they're going to take home at the end of the day.

The reality is, particularly for low- and moderate-income workers, that a significant percentage of them are going to be on public assistance. When they go through that job training and take a job, they might lose that public assistance and be financially worse off than they were before the training. You're telling a worker that you're going to have a financial payoff from an investment in human capital. At the end of the day, if you haven't factored in this benefits loss, that payoff might not be there.

There are at least two consequences. Number one, what if that worker just doesn't do the training? That worker is losing out on the long-term opportunity to advance and the business, of course, is losing out on the opportunity to get that talent. The second is — and perhaps this is even more pernicious because it's less easy to see — that the worker could take the training, get the job, lose their benefits, suddenly be financially destabilized because they weren't ready for it, lose the job, [and] end up worse than they were before.

Sablik: Thinking about those strategies, if you're a policymaker or community leader in a rural community, what are some things that you can do to help your workers overcome these barriers and the challenges?

Ruder: The first is, of course, just awareness. It's perhaps been underappreciated how the benefits cliff experience might differ in a rural area than an urban area. There's a lot of reasons why it could be different: different jobs, different networks, different cost of living. I don't know if that's been fully appreciated.

One strategy that we've concretely heard about is coaching. I've just heard referral agencies that are doing financial coaching using tools like the Atlanta Fed provides with our [benefits] cliff tools. Individuals come in for a financial coaching session, look at these tools, and really try to get a lot more clarity about what their path forward is going to be.

Coaches tell me that individuals don't have a lot of role models. They don't think there's a lot of opportunity locally, so they don't have a clear vision of where they want to go.

Sablik: Julianne Dunn, the director of workforce and financial prosperity for Rural LISC, discussed how apprenticeships may be one way for rural workers to connect with mentors and role models and build their human capital.

Julianne Dunn: A lot of our folks are underemployed or don't have access to traditional learning pathways. Apprenticeships — or any earn-as-you-learn model — are the only way for them to be able to continue to support their families, support the lifestyles they have, and grow within their career. Being able to get paid while you're learning and working with mentors and highly trained people who are invested in your future, it's one of the few ways I think will actually work, especially in rural.

So, apprenticeships, we need more. We need more support, more employers who are willing to invest, more actual career paths. The apprenticeship could be the entry point, or it could be the third or fourth step in a long career.

It also helps build dignity — look what I did, I built this widget with my mentor watching; or look at this electricity line that is going because I did this. There's something really beautiful about seeing that.

Sablik: Melana Howe is a registered nurse who also works for Lake Region State College in Devils Lake, N.D. She shared how the apprenticeship program she helps run is training the next generation of rural healthcare professionals.

Melana Howe: I find apprenticeships very valuable in rural places, especially in healthcare. Registered nurses are the most highly in-demand occupation in our state, three times higher than the next one down on the list. I myself am a registered nurse, have been for 50 years. I know what it's like to be behind the desk in an administrative position trying to find qualified workforce.

Apprenticeships can be done at a distance, which is how we developed ours. That individual can stay and live in a rural community, do their coursework at a distance, and then do their work-based learning at the site where they will continue their occupation or their career.

Sablik: Distance is definitely one of the key factors in rural places. Are there other challenges that are particular to rural apprenticeship programs when it comes to scaling them up?

Howe: Yes, there is.

When apprenticeships first rolled out on the community college level, some of the federal grants that would help you build that up and promote it had to meet an unbelievable number of apprentices to receive the grant, just to even be in the competition. We were able to obtain a capacity building grant for the state of North Dakota and bypass that quota. Most of our employers that are in healthcare may have half a dozen at the most in various occupations, and so you can't meet that 2,000-per-year number in a state that's as rural as North Dakota is.