Small-Town Blues

By Richard Hornik

Even on a bleak, late-winter day, the little town of Clay Center, Kans., exudes all the homeyness and warmth of a Norman Rockwell painting. Tidy, freshly painted houses cover the small knoll that rises north of the town square. The homes of the middle class cost about $20,000; those of the poor are timeworn but neat. One of the tallest buildings in town is a barnlike structure built by a woman who gives baton-twirling lessons.

Serious crime almost never happens here; crack and heroin come to town only on TV news shows. Boasts the mayor, Thelma Bisenius: "This is a place where you don't have to lock your door and you can let your children come into downtown alone." Clay Center citizens care about one another, and about outsiders too. The 55-member Rotary Club has raised $30,000 in three years to help administer polio vaccinations around the world. In short, this should be an idyllic place to live. Yet something is wrong here. Clay Center (pop. 4,700) has lost hundreds of jobs in the past decade, which has prompted an exodus of its young people. In all of Clay County, for which the town serves as county seat, the number of deaths (1,000) since 1980 has substantially outnumbered births (900).

Clay Center, like thousands of other small communities from Maine to New Mexico, is struggling to avoid becoming a ghost town. The population of rural America is being sapped by an epic postwar migration to cities and suburbs, a trend that has accelerated in the past decade. Each year since 1985, more than half a million rural residents have packed up and moved away, usually in search of employment. While self-reliant, spirited towns like Clay Center are putting up a plucky campaign to bring back jobs and citizens, such communities now find they are threatened by conditions, ranging from global competition to deregulation, that are beyond their control. As the small towns shrivel away, so does a way of life that helped define America's character. The U.S. is gradually becoming a more congested, coastal megalopolis, with an increasingly lonely place in the middle.

Founded by land developers as a farming center in the 1860s, Clay Center had hopes of becoming a rival of Chicago. Nowadays the four stoplights that mark the corners of the town's courthouse square often change from green to yellow to red without anybody noticing. Most of the shops on the town square rarely get more than two customers at a time. Shoppers who once bustled along the dusty main strip have defected to the new mall in Manhattan, 40 miles to the southeast, or the Wal-Mart outside Concordia, equidistant in the opposite direction.

Though small towns have suffered a critical loss of business and services in recent years, their populations have been ebbing for decades. The decline began as farms started mechanizing and becoming less labor intensive. Says John Keller, a professor of regional and community planning at Kansas State: "Many of these communities peaked in 1890. This has been the longest deathbed scene in history." Many towns tried to diversify in postwar years by attracting industry, especially low-paying light-manufacturing businesses. Many of those jobs, however, were eventually lost to even lower-wage foreign suppliers, especially during the run-up in value of the U.S. dollar in the early 1980s. During this decade, rural areas have created new jobs at only 40% the rate of metropolitan centers.

Another heavy blow in the '80s was deregulation of rail, truck, bus and airline service, along with the breakup of the Bell system. These changes permitted corporations to abandon service or increase rates in thousands of small towns. H.E. ("Ned") Valentine, owner and editor of the Clay Center Dispatch (circ. 3,800), finds the outcome ironic: "Both Presidents Carter and Reagan espoused small-town American values. Both were admired for it. But Carter's deregulation program, amplified by eight years of Reagan, has taken its toll here."

Clay Center's once-a-day bus service along two-lane U.S. 24 stopped two years ago. The bus carried mostly the poor and elderly to see their doctors or relatives an hour away in Manhattan. Bus service also meant that the town's two florist shops could count on daily deliveries of fresh flowers. And repair shops could often get same-day emergency shipments of spare parts. Although the town's cooperative grain elevator still has access to a working railroad spur, weeds surround the tracks. Reason: the Kyle railroad has added a $750- per-car surcharge to the standard rate, forcing the cooperative to haul its grain 17 miles by truck to a main railroad line.

While deregulation has brought lower prices and better services for many Americans, it has not worked out that way for residents of sparsely populated areas. Most economists would argue that the old system subsidized small-town Americans by requiring companies to provide services at a loss to such areas, but the U.S. traditionally saw rural development as worth the price. Says Jack Tierce, an administrator at the Kansas state corporation commission: "The transportation system of the U.S. was based on moving people from the densely populated East out West. Now it is driving people from rural areas into metropolitan areas." Cities get better service simply because customers are more concentrated and thus more profitable to accommodate.

The indirect costs of deregulation are adding up. Moving grain by truck instead of rail increases the rate at which highways and bridges are being degraded. Says Tierce: "In the long term the public is going to pay the price, and rural America will pay a terrible price."

Clay Center's aging population is symbolized by the skyline of the federally financed senior-citizen housing on the town's west side. The eight-story red brick apartment buildings are the only high-rises on the horizon. "Our big industry is Social Security," says Thomas Lee, president of the Union State Bank. "Fully one-third of our checking accounts are senior-citizen deposits." The aging process has also led to a leadership vacuum, as older business people retire from civic life. And the town's young people show no inclination to stay. When a visitor asked a class of 20 Clay County high school students how many would stay in town or return after college, not a single hand went up. Volunteered their teacher: "They're not being shy."

Rural planners contend that communities need a critical mass of at least 2,500 citizens to survive. The shrinkage of America's small towns will only accelerate as young people continue to leave to find better jobs, even though some retirees have migrated from the big cities to rural areas in search of peace and quiet. Although their money is welcome, older people often fail to see the need for economic development, particularly if it means higher taxes.

Ginger Walker, a vivacious 30-year-old Clay Centerite, launched her own business, Ginger's Shoe Shoppe, three years ago. Her stylish boutique carries an impressive assortment of stock, and has attracted enough customers so far to make a passable profit. Says Walker: "The biggest challenge is to compete with the large communities around us. Our prices aren't that much different. It's just the magic of the malls."

The growth of huge regional discount stores -- despite all the convenience they provide -- has been devastating for many small downtowns, since one shopping center can draw customers away from a dozen or more communities. Says Robert Van Hook, executive director of the National Rural Health Association: "Wal-Marts are the last nails in the coffins of a lot of rural Main Streets." Because downtown retail shops are important employers, their decline can be fatal to the rest of the town's economy as well. Another major small-town employer, the local hospital, is disappearing at the rate of more than 40 institutions each year. A principal cause was the 1983 decision by Congress to eliminate suspected rural subsidies in the Medicare system by reducing payments to small-town hospitals.

Though the whitewashed grain elevators two blocks from Clay Center's town square are still in use, the county's economy is no longer primarily agricultural. Clay County benefited during the 1950s and '60s from the arrival of manufacturing companies that produced such goods as metalworking equipment and grain-handling machinery. But in the past decade almost 300 jobs have disappeared. Says Mayor Bisenius: "In the past few years we have realized that we cannot exist as a town without something new coming in."

In January, during three days of meetings that rang with a fervor akin to that of an old-time tent revival, almost 200 residents anted up more than $250,000 to buy a small equity stake in a new Kansas City-based company that plans to produce light aircraft. Townspeople hope their investment will help persuade the company to put its assembly plant in Clay Center, where it would provide 300 jobs. Says Deanna Fuller, a former farmwife who heads the local economic development group: "These people just want to make it possible for the young folks to come back."

Smokestack chasing, as the practice of wooing factories has become known, is rampant in small-town America. Although often portrayed as a response to problems in the farming sector, in many cases the search is an effort to replace the industrial jobs lost in the 1980s, says Kenneth Deavers, a chief economist for the Agriculture Department. Farming and related businesses account for only about one-eighth of rural employment. Attracting new industries to a small town can be tricky. "A lot of these firms are gypsies. They fly from one set of subsidies to another," notes Mark Lapping, dean of architecture and design at Kansas State.

Is saving small-town America worth the expenditure of more state and federal money? As U.S. cities face deeper problems, ranging from grime to gridlock, the rural option could become more important, or at least more appealing. In a recent USA Today poll, 39% of the people surveyed said they would prefer to live in a small town. (According to U.S. Census figures, less than 24% of the population dwells in rural areas, compared with 44% in 1950.) At the very least, says former Agriculture Secretary Bob Bergland, "it would be unwise for U.S. public policy to force people to leave rural North Carolina and come to Washington, D.C."

Rather than trying to re-create the web of regulations and subsidies that once supported rural America, federal policy should concentrate on helping rural areas compete in the new global economy. Economist Robert Reich of Harvard University believes that rural America must shift its dependence from production of low-value, high-volume products like grain and simple manufactured goods to high-tech manufacturing and services. To make that transition, business and government would have to pump more money into rural schools, hospitals, roads and other infrastructure. Says Van Hook: "We have to make some investments in rural America."

Access to high-quality telephone service will be as important to a community in the coming century as the railroads were in the last. Clay Center, because of its inexpensive real estate and literate work force, might be an ideal spot for a credit-card processing center or other "electronic cottage." Unfortunately, Clay Center's phone service, provided by Southwestern Bell, is so antiquated that hookups with international computer networks are impossible.

Telemarketing would not be the complete answer for small towns, because it generally offers mostly minimum-wage jobs. Several studies have found that the full blossoming of a high-tech economy comes only after it receives a heavy dose of defense contracts. The bulk of that money currently goes to the country's heavily populated coastal regions, which have the most congressional representation. Says Tom Daniels, associate professor of regional and community planning at Kansas State: "Look where all the defense dollars are going, and you can see we are creating a bicoastal economy."

Investment in rural America would pay off, says Reich, who believes that small towns will offer opportunities in the next century as urban centers become more congested: "The new economy toward which we're evolving operates on a smaller scale and is far better suited to rural environments. But unless we remove the present barriers to rural America's economic transition, more and more of us will find ourselves packed ever more tightly together."

The folks of Clay Center are anxiously waiting to find out whether the aircraft company will locate there. And Deanna Fuller, who maintains a storefront office next door to city hall, is working on a dozen other possibilities. Already she has assisted in organizing a community campaign to help expand a manufacturing plant that makes grain augers. Editor Ned Valentine, whose family-owned newspaper has chronicled the town's ups and downs for 100 years, is optimistic. Says he: "The difference between towns that survive and towns that don't is attitude, not population." Clay Center may have the moxie to thrive once again, but for hundreds of other tiny U.S. towns, their little spots on the map are seriously endangered.