Labor

Home Is Where the Jobs Are


Wallace Harwood worked for almost five years as an information systems manager for an energy company in Nebraska, commuting 90 miles a day between his home in Kearney and his office in Lexington. By 2011 he’d found little opportunity for job growth and was thinking about leaving the state when he heard about a job with Xpanxion, an Atlanta-based custom software developer that has three offices in Nebraska, including two in Harwood’s hometown. In April 2012, he started a job as an automation engineer. “It completely changed the game for me,” says Harwood, 34. “I’m bringing in a good salary without the two-hour commute and with all of the benefits that you get from rural Nebraska.”

Harwood’s job is one of about 100 created in Nebraska over the past six years as part of Xpanxion’s plan to hire skilled workers in the state’s smaller cities and towns. The effort, says Xpanxion Chief Executive Officer Paul Eurek, a native Nebraskan, cuts labor costs while bringing jobs and people back to areas where the population is stagnant or falling.

Decades of migration out of Midwestern farming states and manufacturing areas in the Northeast have left many communities with fast-aging populations and depleted talent. Population decreases can have long-term economic consequences, says Mark Mather, associate vice president of U.S. programs with the Population Reference Bureau, a think tank in Washington. The communities “get caught in a downward spiral, because businesses move away because there aren’t enough people,” he says. Recruiting businesses into these areas is difficult if the labor market isn’t strong, says John Cromartie, a geographer from the U.S. Department of Agriculture.

Eurek, who left the state in 1983 in search of a technology job after graduating from the University of Nebraska, is hoping to reverse the trend. “I had a feeling that if I got back to Nebraska I could really start generating some interest within the technology sector,” he says. He returned to the state in 2007 to open Xpanxion’s first Kearney office. Since then, he says, what he calls a “rural sourcing” model—to outsource work from urban to rural areas—has gained momentum.

The company has established a program with the Center for Rural Research and Development at the University of Nebraska at Kearney and with the university’s alumni association to recruit graduates. “We want to inform individuals who left a place like Nebraska that these types of jobs are available in rural America, where before they might not have been,” Eurek says.

The program, called the Rural Sourcing Project, is one of several efforts around the country—from student loan repayment programs to tax deductions—to spur economic growth by attracting more people and jobs. In upstate New York, the Niagara Falls Community Development Department hopes to draw residents back by auctioning off vacant city-owned houses, some for less than $3,000. The first three homes were sold in September, with another auction planned for February, according to community development director Seth Piccirillo. The city hopes to sell an additional 10 to 20 houses in 2014. “We are trying to find any way to make living here, staying here, and buying and renovating a home as financially feasible as possible,” says Piccirillo.

Kansas is trying to attract out-of-staters and its own residents in metropolitan areas to rural areas by offering student loan reimbursements of up to $15,000. Also, out-of-staters who move to any of its designated “rural opportunity zones”—those with shrinking or stagnant populations—can have their state income taxes waived for up to five years.

Because of the loan repayment option, Patrick and Amber Patterson, both 25, returned to their hometown of Phillipsburg, Kan., after graduating from Fort Hays State University in Hays, Kan. They’d expected to stay in a bigger city where higher salaries would have helped them pay off their student debt. The couple, who have two children, also find it easier to manage other costs. “When it comes to day care, that is cheaper, and we know a lot of people around the town if we need a baby sitter,” Patrick says.

This spring, Nebraska’a jobs program will expand to include additional businesses, says Shawn Kaskie, director of the Center for Rural Research and Development. Like Xpanxion, the companies will post jobs to a database to recruit alums.

“Addressing the brain drain revitalizes small towns,” Kaskie says. And, says Eurek, it gives younger Nebraskans a choice he didn’t have: “We are offering the students at least an opportunity to stay here.”

The bottom line: Rural and manufacturing towns hope to promote economic growth by attracting younger workers.

Smialek is a reporter for Bloomberg News in Washington.

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