Is Small Town USA Ready For Expensive Gas?

I wasn't on Twitter long today, when TWalk posed this question.

I immediately thought of Small Town, USA (see recent post, Would You Live There?), and my own shopping habits.  There is no shortage of talk about our country's economic conditions.  Watch CNN, search Google, or read a newspaper, and somebody will be either proclaiming a recession, or that it's not so bad.  In the big city, while you use gas, everything is nearby, even though it may take you a bit to get through town.  Outside of the city, however, you often must travel long distances.  When agriculture is your economy, when everything in town, be it the hospital, school, or cafe, is made possible by the number of farmers in the area, every dollar counts.  When you must often drive long distances to get that ONE thing that your local town businesses don't provide, the fuel expenses quickly add up.

In my post, We're Long Overdue to See Food Prices Rise, I briefly touched on the financial aspect of farming, albeit with very favorable conditions on the grain yields and prices.  Southwest North Dakota, where I live, has been very dry for a very long time.  Farmers have slowly been giving up the chase, quitting the farm, and moving to the city to provide for their family.  With each farmer that leaves, the local economy loses a customer, the school loses some students.  After enough farmers leave, another business doesn't have enough traffic, so they close up shop.  The school doesn't have as many students, doesn't get as much funding, and has to let a teacher go, and sometimes that teacher has a family.  You can see where this leads.  This is a vicious cycle, and very few towns break out of it.

So as fuel prices continue to increase, this puts more pressure on farmers, as it not only effects them directly, but also indirectly as all of their supplies are shipped in, and the added freight drives up even more costs.  This also puts more pressure on the local businesses, as the freight drives their prices up.  The vicious cycle continues.

I give you this question:  When you look at your small town, the small towns around you, the small town you visited on vacation, the small town you grew up in, are they ready for rising fuel costs?  Does your town have enough offerings to keep people in town?  Or are they missing things, sending people to the bigger towns to get things they need, and as long as they're there, visiting Walmart, because it's cheaper than the stuff at home. 

I get the sense, from the variety of people I talk to, that they would prefer to live in a small town.  Technology is a major hold back.  Small Town, USA, you MUST grab onto this, as technology will help bring higher paying jobs to your area.  More money allows them to spend more in town, helping these businesses out.  If your economy is owned by agriculture, I am giving you the warning now, your town will die.  Farmers keep getting squeezed out, leaving fewer, but bigger farmers.  Bigger equipment makes them more efficient, so they need less hired help.  Less people will not keep your town going.  You need something else.  New business is only new if they are adding to the number.  If somebody go es out of business, and somebody else takes over the building, it's not new business, it's replacement business.  If someone in town starts a business online, that is now helping your LOCAL economy, as they bring outside money in.

Gas prices will either force more people to the convenience of the big city, or will keep more people from spending the gas money it takes to get there.  Is your town ready to provide for the people that are staying?  The internet makes it easy to find products online for extremely low prices.  Even the furthest behind person on technology will eventually take advantage of this.  If your town hasn't diversified its economy before then, that will only speed up the decline.

Comments

[MaxWeb]

We just bought a used Toyota Prius for no money down and $200 a month, which is about what we'll be saving in gas alone (during the non-snowy half of the year) each month vs. driving our 4 wheel drive... There are adjustments that can be made, but there's always a cost to life, it's where you place the value... Since moving from the city to a rural area, our habits have changed, we plan out our trips to town to incorporate many different errands into each trip which also cuts down on unnecessary expenses.

[Miss Mota Mouth]

Good question! Originally I am from a small town (Roswell, NM) which is 3 hours from any major airport. Growing up there we traveled a lot to Lubbock, TX, Albuquerque, NM and El Paso, TX to do everything from go shopping for clothing to going to the eye doctor and even just getting a haircut.

If that were still the case for the residents of small towns like Roswell then I would say that the rising gas prices could potentially kill their way of life. The development of the big box stores and franchises in coming to small towns has changed their travel habits dramatically now. There is very little need to travel 3 hours away for much of anything any more- including to major medical facilities which have been so improved in small towns due to privatized local hospitals.

The only area of their economy which is being hit relatively dramatically is the farm & ranch portion of the community and that works both ways. It affects the price of the fuels needed to run their businesses and affects the price of exporting the goods they produce out of the outside world.

I live in LA now & have been paying $4+ a gallon for a while. While at home last week I paid $3.45 & it felt frivolously cheap but considering that the average income per capita is less than LA, I am sure that it is hitting them hard their in some ways- but they don't commute 2 hours in small towns when their jobs are within 10 minutes from home.

[Kalei]

It's a scary thought for sure! We have a small business requires a lot of driving. Since we live in a small town and have to drive to the big city for most of our clients, our fuel bills are outrageous already. Since January 1st of this year, our 2 company trucks have costed us $5000 in fuel. If the fuel continues to rise we may have to move to the big city.
I've already seen 3 or 4 For Sale signs put up in the last week on some local farms. The farms are the reason we moved here to the country. It's a very sad thing to see. Hoping the government will step in and take care of this crazy fuel surge!

[Stuart MacDonald (@stuartma)]

What a great question. I don't live in a small town, but rather a big city. Everything we need is within 5 minute's walk, and the subway is 10 doors away. What this is a reminder to me of is not to take that for granted. If I *can* walk to the grocery store (it's a block away) I really should.

- Stuart

[Webomatica]

Seems to me that higher gas prices will draw people away from small towns, where you have to drive much further to get even the basic things done. I don't know how small towns can take advantage of that, other than to cluster more services into one place, which is basically creating a larger town or at least a downtown.

Frankly, I think high gas prices will hasten the death of small towns as people won't be able to afford to live there. We've enjoyed cheap gas for far too long which has encouraged urban sprawl. Now it's all the areas far away from urban centers which are losing real estate value quickly.

[Dimitar Vesselinov]

Have you read anything by Jim Kunstler, the author of "The Long Emergency"?

http://jameshowardkunstler.typepad.com/clusterfuck_nation/

[Tim (@Twalk) Walker]

Glad my tweet was inspirational! :)

You've hit upon the crux of the issue when you talk about diversifying small-town economies. For a variety of reasons, agriculture as a whole has spent a hundred years becoming increasingly reliant on petroleum, not just for transporting goods or fueling tractors, but for fertilizer and many other ag products. By extension, rural economies have also become highly reliant on petroleum.

This all works great when oil is cheap, as it was for 100+ years. But now that it's not (and probably won't be ever again), it's time for transitions. Some of these will be painful, and I have absolutely no doubt that many farm communities across the country will hollow out and collapse.

The difference for the successful ones will be in how they *adapt* to circumstances as they are now. It's not just about "making it work" with $5 gas; it's about changing the whole way that farmers and farm communities go about their business.

The cultural challenge embedded in this is to preserve what you and so many others (incl. myself, though I live in a city) love about small communities: closeness, lack of rush, a feeling of belonging, physical beauty, etc. Given your obvious concerns in this vein, I would challenge you to think of practical ways that you can take the insights you have here and inject them into the life of your community.

Good luck to you!