Midwestern Towns Offer Young Workers Money To Move There

Many millennials, it seems, are content to pay sky-high rents while working low-level jobs in places like New York City just so they can eat their avocado toast, meet their friends for bottomless mimosas, and enjoy other compelling cultural attractions (like the nearly limitless dating pool).

But as young people struggle with an aggregate $1.4 trillion in student debt - not to mention tepid wages, high rents and a range of other factors that are forcing them to put off family formation and home ownership - rural areas are offering to help newcomers pay down their debts and buy a home. In exchange, the recipients need to settle in midwestern towns where jobs are plentiful, but workers are rare.

Indeed, the demand for college-educated workers in some parts of the midwest is so acute, many towns and civic organizations have started offering "reverse scholarships" to entice young people to relocate there.

Two

In a recent story, the Wall Street Journal profiled several young people - many of them couples - who've used money from these grants to pay the down payment on a house or to finance their relocation back to the towns where they grew up.

The "reverse scholarships" vary in size and scope based on location. Some are specifically intended to pay off student loan debt. Others can be used to help buy a home. The sizes range from around $5,000 to as much as $15,000. What's more, these grants are typically being offered in towns where labor shortages have been driving up wages.

Labor

One economist who spoke with WSJ compared the payments to "a modern day Homestead Act."

Mike Allgrunn, an economist at the University of South Dakota, calls the financial incentives "a modern-day Homestead Act," referring to the 1862 law offering public land to settlers willing to move West. A similar deal now stands in Marne, Iowa, where free parcels are available to people who move there.

Some of the relocation programs show promise, but it is a tall order. The pull of opportunity and amenities in large cities is hard to resist.

"The mere fact that they’re doing what they’re doing highlights the headwinds they are facing," said Enrico Moretti, an economist at the University of California, Berkeley. "There is no one in San Francisco trying to pay people to move here."

But even after the abysmal March jobs report, the official unemployment rate still stands at 4.1%, and the Fed believes that number will drop to 3.6% by next year.

For many of these towns, attracting a reliable supply of workers is vital to their long-term economic survival. Small businesses rank labor shortages as their No. 1 business concern, according to the National Federation of Independent Business.

The fear is that if local employers can't find workers, they could move to a more hospitable environment.

Midwest

But if nothing else, the fact that these grants exist shows just how many sacrifices some young people will make to live in hip urban centers like New York. For many towns, this tendency has turned low unemployment into a burden.

"Low unemployment rates, everyone thinks of that as a good thing and it is, but there’s a downside," Mr. Allgrunn said. "Eventually you run out of people to do the work."

In Hamilton, where state statistics who more than 5,000 jobs remain unfilled, workers with degrees in the engineering, technology, science or arts can receive a $5,000 grant to pay down their student loans if they agree to stay in the area for two years.

While that might not seem like much, for many young workers, it makes all the difference.

So far, a dozen people have applied for the grants, though they all live and work in the region. Kathryn Keefe, 24, works part time as an environmental educator for the city of Fairfield, Ohio, and part time at the Cincinnati Zoo. She pays $200 a month for student loans.

"For us, it’s a financial thing," said Ms. Keefe, of Forest Park, Ohio, about a 20-minute drive from Hamilton. "It really does depend on the scholarship or not because there are other places in the area that are cheaper to live."

So far, Hamilton's grants have mostly been awarded to young people who grew up in the area, and are now returning home to start a family. But for the program to ultimately be successful, it must eventually draw in more outsiders, the vice president of one community organization said.

Katie Braswell, the vice president of the Hamilton Community Foundation, said the scholarships should bring more local residents to downtown but acknowledged it would eventually need to draw more out-of-towners. "I’m not real sure yet how this is going to work out," she said.

To be sure, small businesses aren't the only employers in need of workers. Barclays opened a customer service branch in Hamilton a few years ago that is growing rapidly.

This only serves to emphasize the fact that local businesses must help contribute to making the town more hospitable to young people - perhaps by supporting the development of a more-vibrant down town.

Barclays opened a customer service center in Hamilton that has grown from 48 employees when it opened in 2016 to more than 500. They need more, starting at $15 an hour. The company has opened part-time slots to help alleviate the worker shortage, said spokesman Matt Fields. He hopes the scholarship program extends the city a "halo effect from a hiring perspective."

Unless Hamilton can attract new blood, Mr. Lippert said, its future is grim. Since 2010, local employers have added more than 1,300 jobs, but Hamilton’s prime working-age population has fallen by 2,800.

Grant County Indiana is another area that is experimenting with grants to young workers. The county's economic development office is offering $5,000 toward a home for people moving to the area - though they must have a job or college degree. However, the money must be repaid if the recipient leaves town within 5 years. So far, about 100 people have used the money to buy houses.

And the county's Chamber of Commerce is looking to expand on the program by offering a $9,000 to help repay student loans.

Still, some towns are finding that the grants aren't enough. North Platte, Nebraska launched a program last year through the Chamber of Commerce, but so far, only two people have taken the money.

For many, that should come as a surprise. After all, seven million working-age men are mysteriously missing from the US workforce.

But perhaps what this really shows is that maybe financial enticements aren't the answer. After all, with the midwest still in the grip of a deadly opioid epidemic, some companies have had more success with another strategy: Eliminating drug tests.

Comments

FireBrander beepbop Wed, 05/02/2018 - 22:56 Permalink

" Small businesses rank labor shortages as their No. 1 business concern"

Bullshit.

I know qualified people that apply and apply and their resumes' just seem to go into a black hole.

There is no labor shortage! There is a shortage of people willing to work for NOTHING so that ONE person can quickly become insanely rich!

$24k a year at a job?
or
$24K a year in welfare benefits?

For single person, the Medicaid benefit alone is min $10k a year.

In reply to by beepbop

Bobbyrib FireBrander Thu, 05/03/2018 - 05:34 Permalink

"There is no labor shortage! There is a shortage of people willing to work for NOTHING so that ONE person can quickly become insanely rich!"

But, but, but they're job creators! /sarcasm.

I personally do not know how it feels to provide someone with a minimum wage job myself, so I really shouldn't make fun..even if minimum wage jobs are not livable wages.

In reply to by FireBrander

FireBrander 3rdWorldTrillionaire Wed, 05/02/2018 - 23:00 Permalink

"Drugs"

So, if I get shit-faced drunk on Sunday, then come to work on Monday "sober"; you're good with that.

If I smoke a joint on Friday, take your drug test on Monday and fail; you're not hiring me.

See how stupid that is?

"Drug Test" at the door before work...every day...very simple software programs to test for reduced cognitive abilities and it takes less than 30 seconds per person....100 employees, 10 tablets, 5 minutes and everyone is "impaired" checked on the spot.

In reply to by 3rdWorldTrillionaire

MoralsAreEssential FireBrander Thu, 05/03/2018 - 10:46 Permalink

Sounds like a good practical idea.  It seems that because of the changes to our society which most would agree from about the 1930s to mid 1970s was mostly one of solid positive values and aspirations with enough homogeneity and economic opportunity to patrol those values leading to rises in material quality of life.  Purposeful breakdown by the PTB using the tools of multiculturalism, welfare and sexual irresponsibility and releasing the forces of outright depravity like pedophiles and criminal behaviors tolerated into this society has wiped out decency and what should be acceptable behavior in large swaths of this country.  Devolving back to competency tests at the door is unfortunately a practical solution to widespread character failings.

In reply to by FireBrander

Lost My Shorts 3rdWorldTrillionaire Wed, 05/02/2018 - 23:19 Permalink

Another factor to consider -- how many young men owe how much in child support, arrears and future?  Working on the books might not make sense if almost nothing is left after the paycheck has been garnished.  Most kids now days are born to single mothers, and that's a lot of baby daddies one step ahead of the courts.  Social breakdown is comprehensive, and total, and bound to get only worse.

In reply to by 3rdWorldTrillionaire

JohnG Lost My Shorts Thu, 05/03/2018 - 00:12 Permalink

Many employers will not consider an applicant who has had ANY contact with the legal system, AT ALL.

It's very easy to check, and a simple arrest (no conviction necessary) eliminates them.

With the proliferation of laws, they can get anyone, anybody, any time they want, and arrest them on wafer thin evidence/grounds/suspicion/don't like the look on your face, etc.  Don't have money for a lawyer?  Here's your overloaded, unskilled, barely speaks english PD.  Good Day.

Cops lie.

This is, I believe, much of the "labor shortage."  That, and recruiters looking to cherry pick egg laying milk pigs. (The mythical perfect farm animal.)

 

In reply to by Lost My Shorts

Green2Delta Wed, 05/02/2018 - 20:37 Permalink

A month ago I was playing poker at Jack Casino in Cincinnati. The guy across from me was an army recruiter. He told me that most of the people he's been getting are college grads who can't find a job. They're turning to the military because not only does it pay, but they're offering to pay off student loans up to a certain amount. He said that a lot of them are criminal justice majors who can't find law enforcement work. The only departments that are hiring will stick your ass in the ghetto and apparently that's not appealing to them.

I don't know what they think they'll be doing in the army, but when I was in about a decade ago, the MPs were doing patrols and getting their asses blown the fuck up just like the regular combat guys.

any_mouse DisorderlyConduct Thu, 05/03/2018 - 01:12 Permalink

Well, they don't want to deal with "those" criminals. In Minnesota. if one joins the Minnesota State Police, they have to do two years in the Twin Cities before they can relocate to anywhere else.

These CJ grads don't want to do a tour in US city shitholes, so they join the US MIC to do repeated tours in global shitholes?

What are they going to do when they get out?

In reply to by DisorderlyConduct

ghengis86 Green2Delta Wed, 05/02/2018 - 21:58 Permalink

This was the case 15 years ago too.  A buddy went national guard, MP, ended up escorting convoys in Iraq.  Said they'd regularly get pot shots when running down a 'regular' highway.  Get mortars dropped on you at your outpost.  Go swimming at base where the water was 90F.  Desert sand like talcum.  They got shit on, shot at and blown up just like every one else in the sandbox. Uncle Sam is an equal opportunity destroyer.

In reply to by Green2Delta

Lost in translation Green2Delta Wed, 05/02/2018 - 23:16 Permalink

I was also in a decade or so ago.  USAF was no different.

Balad AB with an F-16C fighter wing/NMSA.  “In the rear with the gear,” so it’s safe, right?

Nope.

40 attacks in first 42 days, IBA to be worn at all times.

One kid from 56FW got badly wounded standing guard in a shelter at ECP: lost both legs at the knee and one arm to a mortar round.  19 years old, engaged...

 

In reply to by Green2Delta

MoralsAreEssential Green2Delta Thu, 05/03/2018 - 10:54 Permalink

This sounds like a good thing to me.  Whatever their naive ideas they have at least gotten a degree, most probably have better morals than most of their peers (thug police and corrupt "justice" employees are usually created by the system which offers "choices") and spending some time in the military structure will have beneficial effects in modeling their characters.

In reply to by Green2Delta

CRM114 Wed, 05/02/2018 - 20:42 Permalink

Companies won't pay good wages or give good conditions if they can get the state to pick up the slack. Wages come from their profits, house grants cost taxpayer money.

But it's not enough. All the old guys like me who quit early will just go fishing, all the millennials will stick to dating and parties, even if both of us have to drink cheap booze (or make our own ;) )

I want to be paid a decent wage and be treated like a human being. Otherwise, forget it. There is no employment shortage, there is a slave shortage. And so there should be.

FireBrander CRM114 Wed, 05/02/2018 - 23:09 Permalink

"All the old guys like me who quit early will just go fishing"

Hell yes!

Cheapest, funnest hobby on the planet! $20 and I can fish every day for an entire year! I'm strictly catch and release...Thrown back some whoppers pulled out of rivers mainly...LOVE the look on peoples faces when I toss back a 20lb channel cat.

In reply to by CRM114

Let it Go Wed, 05/02/2018 - 20:43 Permalink

It is difficult to think "The Great Midwest" is such a shit hole that we have to pay people to live here. 

The truth is things are getting weird everywhere. My local government is the perfect example, several projects proposed in the city where I live reflects what is happening across much of America. We should all be concerned at how financial restraint is being cast aside to create cookie-cutter cities and an illusion of growth.

This is a strong signal that crony capitalism has grown to where government and quasi-government entities have become the main engine of growth. My only fear is that in the end taxpayers will be presented with a bill for these boondoggles and the current exuberance. The article below gives examples of overreach in the city where I reside.

 http://An Example Of Local Government Run Amuck.html

MoralsAreEssential Let it Go Thu, 05/03/2018 - 11:06 Permalink

I live in an USG-contract "prosperous" Metro Swamp area and they're digging up and building unneeded stores and business parks when the old areas have vacancy signs and shopping traffic is overtly DOWN.  My fear is that even if much of the corrupt and satanically evil portions of our government and institutions are defeated, any real change in returning our societies to positive moral values and less corruption is futile.  Housing they keep building as well and so what happens when all of these USG funded jobs get downsized to more realistic levels, the credit card society defaults and people have to live materially more like Eastern European societies without the homogeneity?

In reply to by Let it Go