How Trump Can Help Revive Rural America’s Economies Through Local Initiatives

Cody: With around 10,000 residents, Cody is one of Wyoming’s larger towns. It mainly depends on seasonal tourism for its economy.

Imagine living the American Dream. You probably have more chances than your parents did. With hard work and maybe a bit of luck, you’ve got financial stability and freedom to choose your path.

Most likely, you live in a lively community with a strong local economy. We often think about individual success, but we also cherish our communities—our downtowns, schools, and local traditions. When these places start losing their charm, people notice, and younger folks often move away.

So, what makes once-thriving towns lose their appeal? Economists have been digging into this, especially in Wyoming. They found a key factor that many places share, and understanding it is crucial for helping these communities bounce back.

The health of a community’s economy often hinges on its ability to generate “tradable income.” This means money made from selling goods or services outside the local area. It could be crops, manufactured products, or services. This income circulates in the local economy, creating demand for other jobs. Think of tradable income as the oxygen that keeps the local economy alive.

Rural areas usually have fewer sources of tradable income compared to cities. They often rely on the same income source that brought people there in the first place. This makes them more vulnerable to economic shocks.

For instance, towns built around natural resources can face ups and downs based on market prices. If a mine closes, it can devastate the community, even if most jobs weren’t directly tied to it. The real issue is that the local economy depended on that mine for income.

This isn’t a new problem. It explains why many Western towns became ghost towns and why manufacturing hubs turned into the Rust Belt. In small towns, losing a school or a Walmart can have a similar impact since they might be the only sources of outside money.

When a vital source of tradable income disappears, the local economy struggles. Stores close, jobs vanish, tax revenue drops, and people leave.

Federal funding hasn’t been great at helping communities transition from old income sources to new ones. Today, climate change and efforts to reduce fossil fuel use can hit local economies hard, just like automation and globalization have.

The Biden administration has been trying to boost infrastructure and industries in struggling areas through various acts. But these efforts often rely on community leaders to find and compete for funding, which can be tough for rural areas with limited resources.

In Wyoming, for example, the state gets less federal funding per person than many others, and it reaches fewer communities. Many believe the grant criteria unfairly disadvantage conservative states like Wyoming.

But the main issue is simpler. Small towns everywhere face the same challenges in navigating the funding system.

There are growing efforts in Wyoming to help local leaders access federal grants by building support centers. But a better system is possible.

Instead of creating specific grant programs and making communities compete, federal agencies could work with local leaders to develop tailored projects based on regional needs.

This approach was seen in the Recompete Pilot Program, which awarded grants to locally driven proposals from struggling areas. A similar shift was highlighted in a recent report from the federal government’s working group on coal and power plant communities.

Creating new sources of tradable income won’t be easy or quick, but it’s a good place to start.