Author: Ria Bhandarkar; Graphic: Ella Suh
THE BRB BOTTOMLINE
As more and more small-town businesses close due to a decrease in revenue during the COVID-19 pandemic, rural America is forced to become more innovative. In order to stabilize local economies, do they risk spreading the coronavirus by allowing tourism or close up until infection rates decrease?
The COVID-19 pandemic is estimated to have killed 200,000 Americans and temporarily closed millions of businesses. But as metropolitan areas begin to open up and loosen restrictions, for rural Americans, the worst is still yet to come.
Rural local governments are stuck in a terribly difficult balancing act in order to keep their local economies stable. Many small-towns across America rely on tourism from urban visitors in order to sustain themselves so the lack of willingness to vacation during the pandemic would put them in a difficult financial position. On the other hand, letting in outsiders would increase the risk of COVID-19, which could easily spread within small populations that already rely on unprepared healthcare systems.
So what is the future of rural America? Although tourism should still be encouraged to prevent the shutting down of more businesses, fixing small-town economies will take more than just attracting more consumers. COVID-19 guidelines need to be adhered to for businesses to remain open in the long term, and support still needs to come from communities and all levels of government. To get small towns out of their current rut, Americans need to see them as more than quaint little tourist destinations; they are communities that cannot exist without the people in them, and those people should be prioritized.
Rural America is Hit the Hardest
To really understand the economic effects of the COVID-19 pandemic on rural America, it’s important to acknowledge the relationship between the virus, tourism, and local economies. The coronavirus has obviously led to a decrease in the number of income small towns got from tourism in 2020, but this had less to do with the number of people willing to make the trip and more to do with the lack of businesses, such as inns and restaurants, that were available to tourists.
Local politicians must be especially wary since their electorate tends to be older and at higher risk than other populations. There is much less room for experimentation when a significant number of townspeople could end up dead.
COVID-19 and the fall of tourism will create lasting consequences for small-town businesses, and responses should take into account the restrictions needed to isolate towns from a pandemic. It’s a feedback loop where businesses opening increases the risk of townspeople catching the virus, which influences business to close, which harms the local economy, which encourages people to open businesses. The only way to break this cycle is to take the coronavirus more seriously by enforcing stricter guidelines to decrease spread.
At the beginning of the pandemic, rural small towns seemed like the place to be. They were spread out and had plenty of COVID-friendly activities, like hiking, fishing, and camping. Yet, compared to their urban counterparts, rural areas are doing worse as the pandemic continues. From less education about social distancing precautions to local college campuses opening, recent developments have made the pandemic more difficult to manage for local governments.
That’s likely why these less populous counties had the highest rates of COVID-19 in the country in late October of 2020. Deaths tripled in small towns and rural areas this past summer. In rural Oklahoma, cumulative death rates have eclipsed metropolitan areas. Many experts have pointed to gathering places such as nursing homes, schools, rallies, and prisons as the main cause of COVID-19 spreading in small towns because there is no national plan to reduce spread.
In fact, the infection rates during the current surge of the pandemic have been worse in rural counties than in more densely populated areas. It doesn’t help that the rural healthcare system simply isn’t prepared for such a large-scale pandemic. Since 2010, hundreds of rural hospitals have been on the brink of closure or have already closed. For example, hospitals in rural Oregon are seriously underfunded, with 86% of physicians seeing a decline in patient health. This is yet another factor that has to be considered when building a plan for economic recovery.
The Fall of Tourism
These startling truths about the reality of the pandemic faced by rural America are enough to push possible tourists away. But for some small towns, the risks of the coronavirus don’t justify shutting down their entire tourism sector.
Some have turned to invest in trails and self-guided tours to create a safer way to explore local cultures. For example, the town of Marks, Mississippi is currently working to grow its tourism base through its cultural trail which honors the starting point of Martin Luther King Jr.’s Poor People’s Campaign, a move which has considerably helped its local economy. There is also a movement to increase transparency about safety protocols nationwide in order to encourage tourism while also moving more systems online to allow visitors to have a better understanding of what options are available.
Others haven’t been as careful. For example, some states don’t even require visitors to self-quarantine before crossing borders and have seen cases rise. Montana, which is largely rural, averaged more than 500 cases a day while North and South Dakota added more daily cases than any other state. Knowing now that the pandemic has only gotten worse as 2020 has gone on, that was probably a poor decision. In the future, states and counties with smaller populations and lower rates of the coronavirus would be wise to enforce tourist quarantine periods.
Tourism and the Economy
As tourism has declined, so have local economies, which are driven by small businesses. This became more evident after the summer, the season when small towns expect to receive the most tourist revenue.
One of the hardest-hit industries has been seasonal businesses, such as water sports. These businesses tended to shut down because they lost almost an entire year’s worth of profits in this tourism drought. Likewise, performing arts centers and sports arenas, which often hold summer events to encourage non-locals to participate in town traditions, are tourism-dependent.
In some rural or beach towns, tourism accounts for a majority of jobs in town. The lay-offs that resulted from the pandemic have increased the number of people seeking work, which could possibly lead to more people moving out of these communities.
Casinos and public transportation were also shut down by the virus, decreasing government revenue and increasing deficits. Funding from the U.S. Congress’ CARES Act was generally used for immediate needs such as providing testing and investing in medical facilities, which didn’t leave much aid for economic relief.
Small Towns Respond
Small towns can’t just sit back and passively allow their difficult situations to dictate their economies. Many are doing their best to put together policy solutions and community initiatives; however, this can only help so much without state and federal government aid and a more thorough nationwide response to COVID-19.
But how many of these solutions have actually worked? And why have some solutions failed? Municipal governments’ responses to their economies have been varied and can provide crucial lessons for the future.
Luckily, most small towns have prioritized improving their medical infrastructure over everything else. Many rural areas lacked intensive care units and other facilities prior to the crisis, so investing in developing them was a good first step for many communities.
Idaho Falls, Owensboro, and COVID-Resistant Industries
One example of a thriving small-town during this crisis is Idaho Falls, Idaho. Idaho Falls is a community of 60,000 residents with a current unemployment rate of 3.6 percent. Due to its cheap housing market relative to other similar cities, buyers are paying more than the asking price and even buying units that are yet to be built.
What sets Idaho Falls apart from other small towns is that it is located near Yellowstone National Park, an attraction that has managed to lure visitors even during the pandemic. Besides that, the town is home to the nation’s leading nuclear research center and multiple successful food processors. These jobs have stayed stable due to consistent demand. . All of that success has helped make Idaho Falls a key area for nationwide chains to open new locations and wealthy Americans to build new real estate, which in turn provides locals with more opportunities.
Most of Idaho Falls’ growth relative to other small towns seems to be based on the advantages it had long before the pandemic started. Yet, it is still important to note that the town put in place a mask mandate, indicating that social distancing measures are still a priority. Although the town did see an increase in cases during the rural surge, it has yet to suffer the same way others have.
Meanwhile, Owensboro, Kentucky is experiencing similar levels of success. It also has 60,000 residents, and its largest employer is Owensboro Health, a medical nonprofit. Although Owensboro Health’s profits decreased by 65% during April and May of 2020, its CEO chose to not lay off any employees, and has in fact seen an improvement in employment. Fortunately, sales picked up in Owensboro for the rest of the year.
The town also serves as the home of packing plants for chains such as P.F. Chang’s. In general, Owensboro is lucky to have an economy mostly made up of businesses that have avoided obsolescence during the pandemic. However, its tourism has seen a decline; the Romp Festival, which typically attracts thousands of bluegrass fans to the town, was cancelled. Without its other industries as support, it’s possible that Owensboro could’ve faced the same fate as other towns.
Logan and Tourist Innovation
Logan, Utah has a population of 52,000 and an enviable unemployment rate of 3.5 percent, the lowest in the nation. Like Idaho Falls and Owensboro, Logan has an economy built on manufacturing. It is also a college town, home to Utah State University, which employs many of the town’s residents.
Although college towns have generally suffered during the pandemic due to the loss of students and faculty that bring in lots of revenue, Logan survived by offering businesses such as restaurants incentives to be more friendly to social distancing by increasing outdoor dining and widening sidewalks.
Restaurant owners in the town even formed a collective to create a centralized delivery system, which brought a bump in revenue. They also conducted more business online to expand their businesses.
Lordsburg and the Downfall of Truck Stops
Things have not gone as smoothly in Lordsburg, a tiny town in New Mexico with a population of 2,400. Lordsburg doesn’t have a thriving manufacturing sector; it’s a pass-through town which relies on revenue from truckers and lodgers.
Unfortunately, both lodgers’ and gas taxes decreased by about 33% from March to July of 2020. Of the town’s 36 employees, a few contracted the coronavirus, and the town had to cover their sick leave. Despite receiving funds from the CARE Act, unemployment doubled.
Lordsburg represents many rural towns which rarely receive visitors that stay for tourism. Although they are treated as a stop-on-the-road trip, these towns still need visitors to provide for their inhabitants. Their mistake was a slow response to the pandemic, relying too much on a very small amount of federal aid.
Bristol and the Need for Federal Aid
Similarly, Bristol, New Hampshire, a town of 3,300 people has faced an economic crisis. As a beachside town, Bristol has faced a major loss in revenue because of its reliance on seasonal businesses. But the most devastating impact came from the local Freudenberg sealing technologies factory shutting down, laying off hundreds of town employees. The factory was also responsible for a lot of the town’s sewage plant revenue.
Besides the decrease in tourism, small businesses have also lost customers because of the decrease in disposable income amongst townspeople. Still, many business owners put community over profit, with some distributing sanitary products for free to those who needed them. Unlike Lordsburg, Bristol’s response was not as slow and its downfall can largely be attributed to the lack of state and federal aid they received.
So what sets the first three towns apart from the last two? And what can policymakers learn when making long-term plans for rural America?
For one, the towns that were most vulnerable had the smallest populations and relied on small industries which were easily affected by COVID-19. The towns that have survived have also put some social distancing policies into place, such as encouraging 6-feet between inhabitants or requiring masks. Though many of them relied on tourism in some capacity, those that relied on it heavily also faced the most economic devastation.
Future economic policies have to come on the federal and state level. While local governments know each town’s needs best, it doesn’t have the resources to make real change happen. The CARES Act ignored rural America, and future COVID-19 relief bills have to prioritize them in their funding.
For towns that rely on tourism, ensuring standards that prevent the spread of COVID-19 is imperative. From there, they need to invest in COVID-friendly infrastructure to attract more tourists. Nothing can happen until they adapt. If rural areas don’t prioritize their key industries which have been most affected by COVID-19, they are likely to suffer in the long term.
- The lack of tourism during the pandemic has been a major setback for rural America.
- The towns which have succeeded were mainly lucky to have COVID-friendly industries providing most of their jobs and did not suffer as much from the decline in tourism.
- Other towns innovated to make tourism safer while preserving key attractions.
- The towns which were hit the hardest received too little relief— in order to stabilize their economies, federal and state governments need to prioritize them in future stimulus bills.
Ria (she series) is a sophomore double majoring in Economics and Data Science with a minor in French Language. Her economic interests include labor, development, and education. She hopes her work in BRB can encourage people to learn more about how business and economics intersect with their fields of choice. Outside of BRB, her interests include film, theater, hiking, and trying new foods.