Retirees good for rural economies

Published 12:00 am Friday, July 22, 2005

Many of Alabama’s rural counties have been losing jobs and people for years.

It is not hyperbole to call the situation in some counties a crisis. That is why many who are concerned with their plight urged Gov. Bob Riley to include consideration of Senate Bill 366 in his call for the special session of the Legislature. Time ran out in the regular session on the measure to create a state level Center for Rural Alabama to help rural counties deal with their unique challenges, and Riley declined to include in the special session that was called primarily to get a budget passed.

Meanwhile, though, there are things rural areas can do to help themselves. One is to broaden their definition of economic development. So often the reflexive answer is to build an industrial park and hope to attract tenants. There are some successes with that approach, but economic developers note that there are more communities seeking new industries than there are industries looking for new homes.

Email newsletter signup

It should be recognized that investing in preserving a community’s character, expanding public amenities and cleaning up litter economic development, too.

All over Alabama there are small towns that once had thriving squares. Many graceful old buildings on those squares now wear plywood where windows looked out or ugly facades that were added in futile attempts to look modern. Others have been torn down to make way for buildings with an off-the-shelf architecture that looks the same all over the country.

Yet in some of those old buildings are the seeds of renewal.

In a speech in Montgomery a couple of years ago, Ed McMahon, an Alabama native who was then vice president of the Conservation Fund and director of its Center for Conservation and Development, pointed out that tourists don’t go to a place just to see more of what they can see at home.

They don’t take an out-of-town vacation to visit another dollar store or fast food outlet.

And many people who come to an area as tourists decide to make a community they have visited their home for retirement.

In a presentation at the University of California in Santa Barbara recently, Dr. Mark Fagan highlighted two economic development strategies. One is to produce something and sell it. Agriculture and manufacturing fall into that category. The other is to have people bring money. That includes commercial and distribution businesses, tourism and retirement.

Fagan also outlined a RITE strategy as a means of rural economic development. The elements of the strategy are Retirement development; Incubating local industry; Tourism development; and Expanding existing industry.

It is retirement as an economic development activity that has drawn Fagan’s particular interest. He is the head of the Department of Sociology and Social Work at Jacksonville State University and a nationally known researcher on retirement.

In addition to creating jobs, he pointed out, affluent in-migrant retirees pay more in taxes than they receive in services, increase the deposit base in local financial institutions and increase retail sales. They don’t strain social services, healthcare services, school systems or the criminal justice system. They don’t create environmental problems.

Research into the number of jobs created by in-migrating retirees yields differing figures. One study in Florida, for example, found that it took 2.5 retirees to create a job. In Virginia, it took 2.2 retirees to create a job. Other researchers have found that 2.75 jobs are created for each new in-migrant household.

The kinds of jobs created vary, too, from highly skilled, such as medical professionals, to unskilled retail jobs.

The cost to governments for luring retirees is considerably less than those associating with creating industrial jobs. A chart in Fagan’s presentation in Santa Barbara showed that the cost per job of bringing Hyundai’s manufacturing plant to Montgomery was $126,500. In contrast, the cost per job created by a Del Webb development at Hilton Head, S.C., was $2,700.

Affluent retirees look for a moderate, four-season climate, scenic landscapes (mountains, lakes, beaches, deserts), quieter and safer communities and a reasonable cost of living, Fagan said. They prefer to locate outside an urban area but with easy access to health care, commercial transportation and cultural attractions.

“Retirees become permanent tourists,” Fagan said in an interview. They have the time and money to go out to museums and other attractions. “When they relocate to a community they become your best marketer,” he added. “They start inviting their friends to come so they can show off what they’ve found.”

Although tourism and retirement have much in common, Fagan said, there are differences in the way a community markets to them.

“The way communities market tourism is through brochures that show sizzle,” Fagan said. Retirement brochures need substance. He suggested that areas that are interested in recruiting retirees prepare guides to retirement in their county or community.

Marketing an area as a good place for retirement requires the same kind of effort as marketing to an industrial prospect.

Many communities have found that it can be just as rewarding.

Bill Brown can be contacted at 377 Quail Hollow Drive, Dadeville AL 36853 or by e-mail at

(c)2005 William B. Brown