Barr, Rural Communities: Worth the Investment

Home News & Events Speeches Speech PDF <div class="js-disabled text-center"> <span class='icon icon-alert icon--jsAlert'></span> <span><strong>Please enable JavaScript if it is disabled in your browser or access the information through the links provided below.</strong> </span> </div> April 14, 2026 Rural Communities: Worth the Investment Governor Michael S. Barr At Strengthening America’s Economy through Rural Investment: A Working Forum, Washington, D.C. Share Watch Live Accessible Keys for Video [Space Bar] toggles play/pause; [Right/Left Arrows] seeks the video forwards and back (5 sec ); [Up/Down Arrows] increase/decrease volume; [M] toggles mute on/off; [F] toggles fullscreen on/off (Except IE 11); The [Tab] key may be used in combination with the [Enter/Return] key to navigate and activate control buttons, such as caption on/off. It is great to be here with you today.1 During my career, I've had the opportunity to work on issues affecting rural communities, especially access to capital. My time at the Federal Reserve has only deepened my appreciation for the opportunities and challenges of rural America, as I've traveled over the past several years to rural communities. These communities share many challenges, and they also face distinct obstacles that require flexible solutions. What has stood out to me is the level of innovation and creativity behind many of those solutions. We should do more to elevate these examples, sharing what works and spreading ideas that can expand opportunity and support economic growth across rural America. For example, in 2023, I had the opportunity to travel the Blues Trail in the Mississippi Delta, from Jackson to Memphis. Along the way, I met with local leaders and financial institutions, some of whom are represented here today, to learn how once-thriving rural railroad towns are adapting to both long-standing and emerging challenges. In Moorhead, Mississippi, "where the Southern crosses the Yellow Dog,"2 I saw how a bank that had struggled to maintain a branch chose to donate its building to a community development financial institution (CDFI), preserving access to banking services for a community that needed it. In Clarksdale, Mississippi, I visited the Travelers Hotel, which was redeveloped using New Markets Tax Credits and is now contributing to the resurgence of the Blues tourism industry in that historic community. I also connected with the Delta Philanthropy Forum, a collaborative network of philanthropic partners investing in the region to deepen impact in sustainable ways. We discussed how philanthropy can serve as a critical bridge, providing capital for essential infrastructure like broadband and water systems, while also amplifying the voices of community members who are too often left out of local decisionmaking. On another trip, I met with leaders of banks serving members of the Confederated Salish and Kootenai Tribes on the Flathead Indian Reservation in western Montana. They spoke candidly about the challenges of providing affordable, accessible credit, particularly for home mortgages on trust lands. And I spoke with tribal leaders on the Blackfeet Reservation about the health and education challenges their communities were facing. And when I met with farmers, ranchers, and community leaders in Nebraska, I heard about how shifts in labor availability, production costs, and technology are creating uncertainty for them, as well as for anchor institutions like hospitals and schools. At the same time, I heard powerful examples of resilience and opportunity, from young entrepreneurs planting the seeds of innovation to farmers reaching new markets with their crops. Rural Communities Are Diverse but Face Some Common Challenges My travels have shown me the great diversity across rural communities and reinforced the importance of adapting approaches rather than relying on a single narrative or uniform community development policy. As this audience knows well, rural America is not one story but many. Its economic foundations, geographic characteristics, and future trajectories differ not just from region to region but often from one community to the next. Rural communities are highly diverse in ways that shape both their challenges and opportunities. Their economic outlooks are closely tied to local industries, which vary widely from oil and gas or manufacturing to agriculture. At the same time, the physical and spatial nature of rural areas differ across regions, with some places featuring closely connected, denser towns and others defined by vast distances and limited access to urban centers, influencing everything from services to labor markets. The outlook for rural communities is far from uniform: while some struggle with workforce shortages, affordability issues, and institutional decline, others are adapting and thriving by diversifying their economies, strengthening local leadership and institutions, and leveraging natural or cultural assets to attract residents and visitors. While each rural community is unique, these areas share a common reality: vitality requires sustained effort, coordination, and intention. This is true whether the challenges stem from intrinsic issues, such as population trends; externally generated events, such as trade policy and geopolitical events; or longer-term trends, including artificial intelligence. I will discuss each of these. Intrinsic Constraints in Rural Areas Research shows many communities face overlapping intrinsic structural challenges that complicate economic revitalization. A key constraint is population decline and aging. U.S. Department of Agriculture (USDA) data show that in 2023 rural counties had relatively low shares of prime working-age adults, those aged 25 to 54, while residents 65 and over grew from 7.4 million in 2010 to 9.7 million in 2023. This imbalance leaves a smaller labor force supporting both younger and older populations.3 At the same time, migration—especially from foreign-born individuals—has become critical: between 2020 and 2025, 47 percent of rural counties grew, but only 25 percent did so through increases in their local population, while over 86 percent relied on net migration.4 Rural areas also face the loss of key institutions like banks, hospitals, and sometimes regional colleges, weakening access to capital, services, and economic stability. Often, communities that rely on a large employer or single industry struggle when those employers and industries leave. Long-term employment declines in agriculture and manufacturing—driven by automation and globalization—have further reduced traditional job pathways without consistently replacing them.5 Even though regional universities and community colleges can buffer these losses, many communities risk losing this support because of college closures and financial strains.6 Affordable housing shortages are also a major constraint. Studies show that over one-third of rural renters are cost-burdened.7 But homeownership can be more attainable in some rural areas, with costs averaging 26 percent of median income versus 33 percent in metropolitan areas. Despite these challenges, there are numerous examples of resilience where rural communities have managed or overcome internal constraints. Before I turn to externally generated challenges, I'll highlight a few success stories that I have heard about. Success Stories in Rural Economic Development Like many small Mississippi Delta towns, DeWitt, Arkansas, depended heavily on agriculture and a single major employer. When a shoe manufacturing plant closed, the town lost a significant share of its jobs, exposing the risks of economic concentration. Young people began to leave, investment slowed, and a broader sense of decline set in. An early attempt to reverse this—a biofuel project built around a new crop and local processing—ultimately failed because of a poor fit with local conditions and market challenges. However, that failure proved pivotal: it brought community members together, introduced new ways of thinking about economic development, and shifted the local mindset from resignation to experimentation. What followed was a fundamentally different approach to growth. Instead of attracting one large employer, DeWitt focused on building many small, locally owned businesses, creating a more resilient and diversified economy. Leaders leaned into the town's natural assets, particularly its proximity to major hunting and fishing areas. This spurred growth in tourism, outdoor retail, and hospitality. Entrepreneurs began launching and adapting businesses based on real demand, supported by modest placemaking efforts and outside organizations that provided guidance without taking control. In the end, DeWitt's revitalization was not driven by a single project but by a combination of mindset change, local ownership, economic diversification, and a willingness to adapt, turning a failed initiative into the foundation for long-term renewal.8 Similarly, Thomas and nearby Davis, West Virginia, are two former coal and timber towns that reinvented themselves as hubs for arts, culture, and outdoor recreation after a period of economic decline. As traditional extractive industries faded, new residents—artists, entrepreneurs, and small business owners—helped rebuild the local economy around tourism, creative industries, and the natural landscape. A central player in that process was a CDFI, which acted as both a financial engine and a connector across sectors. It provided small business loans, grants to entrepreneurs and artists, technical assistance, and support for local government capacity. Just as importantly, it aggregated and deployed funding from multiple federal sources such as the U.S. Treasury's CDFI Fund, USDA lending programs, AmeriCorps staffing, and Appalachian Regional Commission capital. This is where public–private partnership became critical: federal dollars flowed through a locally embedded institu