West Virginia recently made a major economic development: 33 jobs coming to Greenbrier County, with an average annual salary of $125,937.
The number of jobs is nice but the six-figure average salary is jaw-dropping. That’s more than three times the county’s median household income of $40,200.
What kind of company is West Virginia luring that pays that much?
Ah, now here’s where things get interesting. What West Virginia announced wasn’t a new company at all, but rather the latest cohort of remote workers moving to the state through the Ascend West Virginia program that pays qualifying people $12,000 to move there – part of a total incentive package valued at $20,000.
We hear over and over that the modern economy is built around talent and that talent is mobile so communities who want to compete economically need to make themselves attractive to talented people. We also hear over and over that remote workers are constituting a much bigger sector of the economy, and remote workers by their very definition are potentially mobile. Some places are taking all that to the logical conclusion: Why spend time recruiting companies when you can just recruit people? Localities have long been accustomed to paying incentives to companies – whether they like it or not – so why not pay incentives to people?
That’s where there’s a small but growing list of localities around that country that, yes, are paying people to move there. Some are big by our standards but not necessarily glamorous by national terms – Tulsa, Oklahoma. Some are a lot smaller – Johnson City, Tennessee, for instance. And then there’s West Virginia next door, which has picked out three communities to market: Lewisburg (just over the state line from our Alleghany County), Morgantown (home of West Virginia University) and Shepherdstown (just north of Winchester in the eastern panhandle).
So far, no Virginia locality has done this but the obvious question is: Should we? We have lots of rural localities across Southwest and Southside that are losing population. Even if recent data – such as the latest Census Bureau projections – shows more people are starting to move into those places as part of a pandemic-induced Zoom-era migration, those localities will still keep losing population because deaths in their aging populations far outnumber births. To just break even, those localities are going to need to attract a lot more new residents. Is this one way to do it? Let’s see what the experience in some of these other localities has been.
First, let’s deal with the biggest objection to these programs. Should we really be paying people to move? “It’s marketing,” says Mitch Miller of the Northeast Tennessee Regional Economic Partnership, which runs the program in Johnson City. “It’s enough to capture someone’s attention to consider this. … It’s like when the bank offers a free toaster to open an account.”
The real payoff in these programs is that they attract people with lots of disposable income. The West Virginia program has lured 33 people to Lewisburg and surrounding Greenbrier County, which grows to 61 once you count family members – and even 61 new people aren’t to be discounted in a county that’s been losing population off and on since 1950 (and was down 947 people in the 2020 census). But what really matters is their incomes: That’s a lot of new money coming into the community that will get spent somewhere. Every restaurant, every store in town will sure like that.
Johnson City has found the same thing. It started a remote worker incentive program last year and so far has accepted 24 applicants. Their average salary: $98,000, more than double the county’s median household income of $42,174.
“Some of these people are making more than $200,000,” Miller says. He computes the estimated economic impact of that first cohort of 24 at $420,000 a year. “This is real economic development,” he said, no different than bringing in a company that employed 24 high-wage people – except the community doesn’t have to pay for infrastructure.
Muscle Shoals, Alabama – which set a minimum income of $52,000 as a qualification for applicants – has brought in 62 people and projects a $6 million increase in gross domestic product. Topeka, Kansas – which set a minimum threshold of $60,000 – saw its first cohort of 40 newcomers average $80,000 a year and generate $3.2 million in economic impact. Tulsa, perhaps the biggest community with an incentive program for remote workers, has brought in about 1,200 people, with an average income of $104,600 and a total $60 million addition to the city’s gross domestic product. In West Virginia, that first cohort to Morgantown averaged $105,000 in salary; Lewisburg is coming in higher at $125,937, which makes it the most affluent group of newcomers I’ve found in any of the communities I looked at.
Some rough math: West Virginia is probably spending $396,000 in privately-funded dollars (33 people times $12,000) to get $4,155,921 worth of income into Greenbrier County. Factor in whatever multiplier effect you prefer and that $396,000 turns into something well beyond $4,155,921. Even if it’s only 2x, which would be low based on most reports I’ve seen, that’s somewhere north of $8.2 million of new economic impact in Greenbrier County.
With numbers like these, it’s tempting to wonder why every locality isn’t doing this – the same way they’re out hustling industrial parks and shell buildings and whatnot. There are several possible answers to that. With any trend, there are always some people who are out in front of others. These localities are the early adopters. There are also some who aren’t convinced that remote workers are as cost-free as they might appear. True, they’re not requiring localities to lay water lines and sewer pipes the way some factory would but they’re also not paying a machine and tools tax the way a factory would. In theory, if a county only had remote workers, they’d be paying a lot fewer taxes than industry would – but still demanding services such as schools. Ultimately, the question is: What problem is a locality trying to address? The localities that have launched remote worker incentive programs are trying to reverse negative demographic trends (declining populations or aging populations or both) and bring new money into the community. They’re not the sole solution, just part of it. “Ultimately, the economy has changed,” Miller says. “Remote workers are economic development. We have an opportunity to change the median income.”
One thing seems certain: The places that have started these programs sure swear by them.
Vermont was one of the first, prompted by a desire for new and younger residents; Vermont has the fourth highest median age in the country, 42.8. In 2018, the state’s Republican governor (yes, the same state that elects Bernie Sanders also elects a Republican governor) announced that Vermont would offer up to $10,000 to anyone who moved the state and worked remotely. That first year the state gave out $500,000 to 140 people. The state’s auditor was skeptical; he grumbled that the people who moved had the resources to move without the incentive, so is there are some unfortunate political optics involved. Why should we be subsidizing rich people? If you can get past that, the example of the free toaster at the bank applies here. Would these people have moved without a marketing gimmick? If we’re spending money on marketing to achieve a goal, does it really matter who gets that money as long as the goal is achieved? Despite the auditor’s misgivings, Vermont deemed the program a success. When businesses complained they had trouble finding workers – this was even before the pandemic – Vermont expanded the incentive program to anyone who moved to the state to take a job. Earlier this month, Gov. Phil Scott signed legislation that a) reduces most awards to $5,000 but b) expands the program to the tune of more than $3 million. However, if someone moves to a part of Vermont with “above average unemployment or below average annual wage,” the grants can rise to $7,500.
Tulsa was another early adopter. The city was concerned about some of the same things that concern much smaller communities: More people were moving out than moving in, and most of those leaving were college-educated. Tulsa also wanted to establish itself as a more entrepreneurial city, so it didn’t just offer cash, it offered a free year of co-working space, workshops, networking events and other things a young entrepreneur might need. The median age of those moving through the Tulsa Remote program is 35 and more than one-third say they want to start their own business.
Based on the success of those programs, we’re seeing more communities offer their own incentives. Muscle Shoals was influenced by Tulsa; Johnson City was influenced by Muscle Shoals. Northwest Arkansas and Southwest Michigan have remote worker incentive programs. So does Natchez, Mississippi. Indiana’s state legislature just approved $1 million this year and $1.5 million next year for a statewide program. Some places have variations. Savannah, Georgia, helps pay for people with certain technical skills. Newton, Iowa – which had a big factory shut down – has a program that’s focused on people buying homes: If someone builds a new house, they get $10,000. It’s now issued 103 new permits – half of them to newcomers – and the population is starting to increase. There are lots of other variations out there. In the course of researching this, I found too many communities with such programs to easily list.
Let’s just focus on the two closest to us: Johnson City, Tennessee, and West Virginia.
“People are ultimately the new form of economic development,” says Miller, the Northeast Tennessee economic development chief. “When companies look at locations, the first thing they ask is, show us the workforce.” Just because someone is working remotely now doesn’t mean they will be tomorrow. Part of the imperative there is demographic: “We’ve got to increase population. If we aren’t showing a certain amount of population growth, we’ll be an afterthought.” Keep in mind that all the counties around Johnson City are already showing population growth – in contrast to counties in Southwest Virginia – and that’s apparently still not enough for Tennessee.
Johnson City launched a social media marketing campaign to identify people who might be interested in moving. “One remote worker was looking at Asheville and Chattanooga in their search but came across Johnson City,” Miller says. Score. Among the places Johnson City targeted: San Jose, Chicago, Dallas, Nashville and Florida. The best results came out of Nashville. The weakest came from San Jose. Grants are based on the income someone has. Those making the minimum of $50,000 would qualify for $2,500; those making more than $70,000 would get $5,000.
West Virginia might have the most ambitious program of all. Its Ascend West Virginia program was funded by a $25 million gift by Brad and Alys Smith – he’s a West Virginia native who made it big in Silicon Valley as CEO of Intuit. That private funding certainly helps assuage any concerns about tax dollars going to subsidize people with six-figure salaries. Ascend West Virginia has focused on three localities. The first class moved 110 people to Morgantown. The second class just accepted those 33 applicants (or 61 if you count families) for Lewisburg. Next up is Shepherdstown. If you want to be cynical, you’ll point out that these communities are basically the garden spots of West Virginia – the program isn’t trying to move people into, say, the coalfields of McDowell County.
On the other hand, the program seems wildly popular. For that first class in Morgantown, the program received more than 7,500 applications – from all 50 states and more than 70 countries. It finally accepted people from 21 states – and Berlin, Germany. For Lewisburg, the program had more than 3,600 applications – again, from all 50 states and 44 countries. West Virginia officials boast that, with an acceptance rate of less than 1%, their program is harder to get into than Harvard.
A few weeks ago, West Virginia hosted a virtual event where some of those newcomers could talk about why they signed up. They basically all said the same thing: They love the outdoors. Maggie Blume is a sales executive with a software company in Chicago who is already working remotely. “I’m a flatlander from the Midwest so mountains and being able to kayak are so much fun,” she said. “In 15 minutes you can get to the river, you can get to a hiking trail.” Julio Castillo is a cartographer for the U.S. Department of Commerce in Washington, D.C. He fell in love with West Virginia while camping. “I’ve been nothing but pleasantly surprised what a hidden gem the Greenbrier Valley is. It’s really a paradise in the Greenbrier Valley that we’ve stumbled upon.” Ben Issenberg calls himself a “serial entrepreneur” from Maryland. He was looking for a good place to raise his kids, ages 10 and 12. “My kids said, ‘This is like the town from ‘It’s a Wonderful Life.’”
So, I ask again: Should Virginia communities do something like this? Keep in mind that the Virginia Tobacco Region Revitalization Commission already is – sort of. It has a Talent Attraction Program where it pays the student debt of recent college graduates who agree to move to the commission’s footprint in Southwest and Southside and fill certain hard-to-fill jobs. In the most recent round, the commission accepted 77 people – at a price of $1.4 million in loan repayments. In all, the commission has helped pay for 299 people in all. Over the past three years, the most common occupation is special education teacher (24%), followed by physical therapist (14%), science teacher (12%), occupational therapist (11%) and math teacher (10%).
When Evan Feinman was the commission’s executive director, he felt this program was superior to the run-of-the-mill remote worker incentive program because it helped fill jobs that rural communities needed. (The Virginia Department of Health has a separate program that helps pay for certain health care workers in certain underserved areas.)
Ultimately, though, these are two different types of programs – related, but still different. The Tobacco Commission program performs a great service by helping fill hard-to-fill jobs – and bringing in young people to aging localities. It also requires a certain amount of community service, hoping that those people get invested in their communities and stay. But teachers aren’t making $100,000 a year – and these remote worker incentive programs are bringing in high-dollar people who can spend money. Ultimately communities need all those things, right? They need those teaching jobs and health care jobs filled, but they also benefit from people with more disposable income.
There are lots of ways to rebuild a community. This is just one way. But I’d sure be curious to see some place in Southwest and Southside try this to see how it worked. Thought experiment: Those 33 people with average incomes of $125,937.to Greenbrier County, West Virginia – what if they were across the line in Alleghany County, Virginia? Would that kind of income influx be worth paying for?