Report highlights unique challenges, solutions for rural poverty


A new Federal Reserve Bank of Boston survey shows that poor people living in rural Northern New England have a tougher time finding jobs and affordable housing.

The bank asked 160 organizations that serve low-income populations to respond to its annual Community Outlook Survey. The groups included the economic development, affordable housing, community action, human services and workforce development sectors in the six New England states.

The survey gauges the organizations' perceptions of the economic and financial conditions experienced by lower-income communities and individuals in New England.

The findings show that levels of poverty often are amplified in rural areas and policy solutions that work in an urban context may not be suitable for rural areas.

Anthony Poore, senior community development analyst at the Boston Fed and co-author of the report, said all but one of the six New England states have rural counties. More than 1 million people live in rural or small-town New England.

"That's a big picture story that I think policy makers should be thinking about from the context of their work," Poore said.

The Boston Fed, one of 12 regional reserve districts for the nation's central bank, promotes financial growth and stability in New England. The Fed is trying to hone regional responses to rural poverty, which is not always adequately addressed by programs that tend to be tailored for cities. Urban planning tends to dominate the program landscape -- and garner the most funding.

For example, the report points to low population density and limited public transportation as possible reasons that services like the Supplemental Nutrition Assistance Program and housing vouchers don't have the same impact in rural areas as compared with urban settings.

People in rural areas are more likely to receive SNAP benefits, but they typically live further away from stores that allow them to redeem the benefits. "Thus, the people most at risk have the least access," the report states.

The report says limited funding for subsidized or low-income housing is increasingly channeled toward "high-impact urban/suburban development projects, leaving rural affordable housing development behind and competing for a smaller share of resources."

This rural service gap is masked when New England is viewed as a whole because Boston and its surrounding communities comprise almost half of New England's Gross Domestic Product and nearly a third of the region's population, according to the report. But that leaves two-thirds of the population outside its greatest activity.

Stripping Massachusetts out of the region's data, the report says, "(a) more dismal picture emerges."

New England's poverty rate increased 1.4 percentage points between 1999 and 2011, to 10.5 percent, while the rural poverty rate in the region jumped 2.1 percentage points to 12.6 percent in the same time period.

Poore said this urban-rural divide is mirrored by clear trends across the region's northern (more rural) and southern (more urban) stretches. Poore and co-author, Kaili Mauricio, are hoping to get rural policymakers on the same page about the unique challenges they face -- and the potential solutions they share in common.

"The issues important to the Northeast Kingdom, those issues are reflected in Augusta (Maine)," Poore said. "Kaili and I are taking the show on the road to begin a dialogue on these issues."

Poore is promoting development of Children's Savings Accounts along the lines of Vermont's existing 529 college savings plans. He said the concept could expand economic and educational opportunities and bolster the state's workforce development aspirations. Poore and Mauricio met with stakeholders and state officials in mid-January to discuss the Children's Savings Accounts idea.

Poore's pitch for CSAs also reaches the "middle skills gap," described by another researcher from the Boston Fed as a "mismatch" between the skills employers need and those a workforce has -- especially skills stemming from some college education or an associate's degree. Alicia Sasser Modestino found that New England is more susceptible than other regions to this gap.

Policymakers in Vermont are pushing for new workforce training programs that help workers improve their skills.

Lawmakers also see high-tech and knowledge-based enterprises as the foundation for economic development in Vermont.

In the House Committee on Commerce and Economic Development, Reps. Paul Ralston, D-Middlebury, and Heidi E. Scheuermann, R-Stowe, have sponsored sweeping legislation that targets "new economy" entrepreneurship. Though the bill is in the drafting stage, it's already being considered by the Senate Committee on Economic Development, Housing and General Affairs, which intends to incorporate segments of H.736 into its own jobs bill, S.220, where housing issues also will be addressed.

But the Fed's Community Outlook Survey brings attention to more than jobs, housing and the conundrums of fiscal uncertainty and funding cuts to programs.

Some organizations, in anonymous survey comments, pointed out eligibility structures that perversely incentivize chronic reliance on public assistance.

"If government benefits could gradually decline as people gradually increase income and savings, then families would have a chance to become self sufficient," wrote one respondent from Vermont. "Right now we see alot (sic) of people choosing to stop working because the loss of benefits is so high that they can't afford to work."

Changes to the Reach Up program that place new limitations on welfare benefits for single parents are now under review in the House Human Services Committee.

Rep. David Sharpe, D-Bristol, has sponsored H.711 to introduce a "slope" to the unemployment compensation program, so that beneficiaries could ease off assistance. The calculations are complicated, as a presentation in early February by the Department of Labor to the House Commerce Committee illustrated. Questions remain as to how a benefit slope would work.

And in addition to short-term challenges, some survey respondents said chronic rural poverty is taking a toll on morale among workers.

One Vermont respondent connected poverty's self-perpetuating cycle to a "persistent confidence gap," especially among rural youth, and cynicism that pursuit of a better quality of life is even possible.


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