Rural counties in Minnesota leading economic recovery

The folks drinking coffee at Slayton's Left Bank Cafe on Broadway and the county workers lunching at the Country Host on the east edge of town would tell you that their county — Minnesota's Murray County — seems to be doing quite fine, thank you.

Its farmers have had a string of good years, though prices weren't so great this past fall. The meat-snacks plant is running strong, and some of the smaller businesses — VIP Floral Greenhouse and Page 1 Printers — have expanded and added jobs. Not many, but they grew. And there's a new Family Dollar store in Slayton.

But most people in this tiny county — pop. 8,500-ish — likely didn't realize until this month that Murray was one of only nine counties in the state, and one of only 65 in the country (out of 3,069), to reach prerecession rates on four key economic indicators.

What factors led to this result?

Josh Malchow, Slayton's city administrator, said: "We've had a good past couple of years: new homes, new businesses, older businesses adding new buildings. Lots of new tax base."

"I was surprised to see that," said Christy Riley, Murray County's community relations coordinator. "But we're such a big agricultural county, and agriculture remained strong through the recession — and it pulled us through the recession without the staggering employment losses and home foreclosures experienced in other areas of the state."

The economic study released Jan. 12 by the National Association of Counties found that Murray and eight other Minnesota counties, all non-metro and in the western side of the state — Clay, Jackson, Marshall, Pennington, Polk, Pope, Stevens, and Wilkin — have "recovered" from the recession. The criteria used in the study were: economic output (GDP), median home prices, jobs and unemployment rates.

Minnesota had the third-most counties making the "recovered" list, behind only the oil-rich states of Texas and North Dakota; 41 states didn't have any counties on the list.

Nationwide, counties with fewer than 50,000 residents were most likely to have fully recovered, as were those with strong agriculture and energy sectors.

The list indicates that, in Minnesota at least, outstate counties may be leading the economic recovery.

King Banaian, a former state legislator who teaches economics at St. Cloud State University, said that while such studies are always subject to scrutiny, the strong agricultural economy in recent years is a likely factor. "The devil is in the details, but the ag communities did real well in 2012 and 2013," he said.

Rick Goodeman, CEO of the Southwest Minnesota Housing Partnership, a nonprofit based in Slayton that works in many surrounding counties, said despite recent growth, there's a roadblock ahead: affordable housing for needed new workers.

"Most of southern Minnesota didn't lose the number of jobs that the metro area did, so there's a shorter distance to come back." Goodeman said. But the recession pulled a lot of state resources away from outstate Minnesota job growth and housing priorities, he said. His message to legislators: Employers are frustrated. They need state help in developing affordable housing or job growth efforts will stall.

Riley said that Monogram Meat Snacks in Chandler is the largest private employer in the county with several hundred employees and expansions in 2007, 2009 and 2011. The county's economic development authority helped to obtain loans for the Monogram expansions from the Minnesota Investment Fund to fill the gap between the financing available and what was needed to complete the projects, she said.

"And we have a lot of small local businesses that have expanded their services, added jobs and even started up since the beginning of the recession without any help," she said.

Joe Kimball, a former Star Tribune reporter, has written for MinnPost since its 2007 launch