News From Terre Haute, Indiana

Opinion Columns

July 22, 2012

MARK BENNETT: Wanted: Young Professionals

Small city willing to pay a portion of your student loans; must agree to live in our town

Maybe it was a former classmate who skipped town on Graduation Day before the tears on his mom’s cheeks could dry.

Maybe it was a student at a local college. Or a friend living in another city who only knows your hometown’s reputation from days gone by.

Regardless of the source, most people have heard some disgruntled person utter the following words about their town …

“You couldn’t pay me to live there.”

Most Terre Hauteans have heard that, but their situation isn’t unique. Lots of small Midwestern cities struggle to attract prospective residents in the early stage of their careers. Towns located in “the Rust Belt” boomed in the early 20th century, offering solid, lifelong manufacturing jobs to workers straight out of high school. A half-century later, those cities still crave sprawling factories that employ hundreds, but in day-to-day reality survive best with a diversified mix of smaller employers with a few dozen folks on the payrolls. Thanks to energetic economic development efforts, Terre Haute has fared better than most. Still, populations in those places, including Terre Haute, peaked around 1960, as Baby Boom families grew, and have since dwindled.

Today, those cities rely on the Baby Boom kids — now in their 40s, 50s and 60s — for the bulk of their labor forces, volunteerism and charitable giving. The missing piece of the communities’ demographic puzzle is the young professionals; it’s hard to lure them to towns where the steadiest longtime job providers shut down in the 1980s, ’90s and 2000s. Opportunities look far better in large, metropolitan areas.

A few crafty places around the nation have created an innovative answer to the predicament.

To those who would say, “You couldn’t pay me to live there,” places such as Niagara Falls, N.Y., rural Kansas and Nebraska are saying, “Oh, yeah? Try us.”

Literally.

Local and state governments there are offering young people a hard-to-resist incentive. The localities will pay off a portion of recent college graduates’ student loans, if those young folks agree to live in those towns or states for a few years. Niagara Falls will guarantee a graduate of any institution of higher ed $7,000 to repay student loans if they’ll rent or buy a home within a specific downtown district, and stay there for two years.

Niagara Falls pooled $200,000 for the initiative, aiming to entice 20 young, educated adults to move there. That city, long a popular destination for honeymooners, is trying to reverse a shrinking population, which tumbled from 100,000 to 50,000 in the past 50 years, according to a report in the Christian Science Monitor this month. City officials there understand the presence of young professionals is a strong remedy for a bleeding economy, as countless research studies have shown. The goal is to have at least six or seven of the participants to maintain residences beyond those first two years.

Officials realize the project isn’t a cure-all, but consider it seed planting. Rather than going citywide, they’re hoping to stabilize Niagara Falls neighborhood by neighborhood.

Similar projects are underway in Kansas and Nebraska, the Monitor reported. Kansas is also offering tax waivers to young adults with outstanding student loan debts who have lived outside the state for at least five years prior to July 1, 2011.

The same thing could work in Indiana, a state with dozens of colleges and hundreds of thousands of students with 10s of thousands of dollars in loan debt.

The idea intrigues Leah McGrath, communications director for the Indiana Association of Cities and Towns. This year’s IACT mayors institutes have focused on economic development, “and a lot of what we discuss is retaining young professionals,” McGrath said. “It’s something we talk about a lot.”

She sees parallels between the Niagara Falls concept and large metropolitan school districts offering incentives to young teachers to work in blighted inner cities. “It’s not uncommon,” McGrath said.

Yet, the carrot involving student-loan debt assistance adds spice to the Niagara Falls, Kansas and Nebraska plans.

It’s reasonable to call America’s student-loan debt a “crisis.” We all remember the Great Recession, right? Housing bubble? Credit and financial market meltdowns? Well, student-loan debt in this country now tops $1 trillion and is the leading source of non-mortgage debt in U.S. households, surpassing even, yes, credit cards. The average bill owed by an Indiana college student after four years is $27,000. Any significant help in cutting that tab catches those graduates’ attention.

For Niagara Falls and others to succeed, of course, those communities must have jobs for those young adults. Once they clear that hurdle, the towns and states must also feature amenities that satisfy the under-35 crowd. “They want the quality of life, and the trails, and the good schools in their neighborhoods,” McGrath said. Those perks are necessary to turn the target group into long-term residents, beyond the two-year requirement.

“And that’s why it can’t be just, ‘How can we get these young professionals to come here,’” McGrath said. “It’s got to be, ‘How can we make our community attractive to a young family?’”

Economic development measures must be a top priority, said Kevin Christ, associate professor of economics at Rose-Hulman Institute of Technology. “It’s one thing to induce someone to stay here for two years, but they have to be able to find good jobs that evolve into interesting careers,” he explained. “I think that’s a much taller order.”

The incoming workers’ abilities must match a community’s prime labor needs, and vice versa, said Jerry Conover, director of the Indiana Business Research Center in Indianapolis and a Terre Haute native. The programs must be sustained, too, he added, “otherwise, once the incentives run out, they’ll just pack up and move to the next best place.”

Conover also questions whether $7,000 is enough. “By itself, it may not be worth moving to a place you’ve never heard of,” he said. Conover recommended towns invest in retention of their current workforce and incentives to businesses.

The two-year commitment might be sufficient for a city to win over young professionals, said Joseph Heathcott, associate professor of urban studies at Indiana University.

“Students mature very quickly after they graduate,” Heathcott said. “Two years is a long time.”

Such a pay-to-stay program won’t appeal to all young professionals. Some will be more inclined “to accept short-term poverty to live in New York City or Chicago” by working a job outside their field, Heathcott said, instead of moving to a small, unfamiliar city. Others, though, want a meaningful start to a career ASAP and would take the deal. Those are the people who could help jumpstart a local economy in a community willing to, in turn, help lessen their personal deficit.

Niagara Falls’ out-of-the-box initiative touches the two 21st-century dilemmas — small cities in need of young talent, and college grads starting careers with nearly $30,000 of red ink.

“We’re looking at graduating a whole generation with a huge education debt that we used to invest in publicly,” Heathcott said.

America has simply shifted the bill from the states to the students and their families. The raspy voice from that old Fram Oil Filter TV commercial echoes loud: “You can pay me now, or pay me later.”



Mark Bennett can be reached at (812) 231-4377 or mark.bennett@tribstar.com.

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