ï»żEpisode 65. Education, Workforce & Tariffs: Rough Roads for Rural Ahead with Jeff Strohl & Gbenga Ajilore
Episode 65. Michelle's Intro
Michelle Rathman: Hello one and all and welcome back to a new episode of The Rural Impact. I'm Michelle Rathman and I am thankful, and I mean it that you joined us for this conversation that as always works to connect the dots between policy and rural quality of life. And in the context of today's show, we're talking education, workforce, and rural economies.
So, before I introduce you to our powerhouse lineup of guests, and I do say it is a powerhouse panel, I wanna spend just a few minutes on health policy because although it's been well over a month. Since the passing and signing into law of the O-B-B-B-A, also known as H.R.1, which included massive tax cuts for the wealthy and massive cuts to Medicaid and changes to the Affordable Care Act or ACA.
Of course, new restrictions, and red tape work requirements and much more that will negatively impact rural. There are some other health policy gymnastics going on right now. And by that, I mean work on the 2026 Labor Health and Human Services, education and related Agencies bill, you may not have known that, but you do now.
And on July 31st, we're recording today on August 22nd, the Senate Appropriations Committee did its markup, and I've asked Alexa McKinley Abel, Director of Government Affairs at the National Rural Health Association to give us a really quick rundown of what came outta that session, recognizing that the Senate's full debate and vote will not be taken up until after their August recess, and as of today, that date is TBD as they say.
So, here's a quick overview from Alexa.
Alexa McKinely Abel: On Thursday, July 31st, the Senate Appropriations Committee held a markup of its fiscal year 2026, Labor Health and Human Services Funding Bill. This bill includes Federal Office of Rural Health Policy Programs, as well as other health resources and services administration programs. What this means for rural health is that many of the programs that we saw propose to be eliminated in the President's budget are actually funded and funded at higher levels than we've seen in the last couple of years.
Some highlights out of the bill include 66.27 million for the Medicare Rural Hospital Flexibility Program, 13 and a half million for the State Offices of Rural Health. Both of those received a bump. Like I said, the Rural Residency Planning and Development Program received a bump up from 12.7 million to 14 million.
The Rural Healthcare Services outreach programs received a $3 million increase to 100 and 3 million and the Rural Communities Opioid Response Program would be funded at the same level it has been for the last couple of years at 145 million. Outside of the Federal Office of Rural Health Policy. Other programs were funded at the same levels, including the Area Health Education Centers program at 47 million.
Overall, this is a big win for rural health, as I said, because the programs that the president's budget proposed to cut were funded by the Senate and we can see Congress really, supporting the rural health safety net. That being said, we have not seen house numbers yet, and of course, the House and Senate have to agree upon numbers and pass the same budget.
So, it remains to be seen where the house will come out in the FY 26 funding bill.
Michelle Rathman: My thanks to Alexa and you know, we're gonna continue to follow this and other health policy developments. And with that I encourage all of us, and I really do, I encourage all of us to continue bending the ears of members of Congress to let them know how imperative it is to support legislation that sufficiently, and that's an important word, that sufficiently funds the programs that Alexa mentioned.
Okay, so moving on to the heart of this conversation today, the topic, as I said at the top, we're connecting the policy dots from education to workforce and from their rural economies. This is not a light subject at the end. I do hope that is our goal here, that you are enlightened, even if just a little and inspired to learn more.
So, for this conversation, I am grateful to welcome Dr. Jeff Strohl, Research Professor and Director of the Georgetown University Center on Education and Workforce. Now, if you've been following us, you know, it was just about a year ago that we were joined by Jeff, but much has happened since then.
So I'm really grateful that he was able to carve out some time. And then after a break, when we hear from our awesome new partners at the National Association of Rural Health Clinics, it is my pleasure to welcome Gbenga Ajilore, Chief Economist of the Center on Budget and Policy Priorities as we shift the conversation to talk about tariffs, taxes, and the impact on rural workforce and local economies.
It's a lot. So, with that, I invite you to get yourself comfortable or get yourself moving with your earbuds and listen to my conversations with Jeff Strohl and Gbenga Ajilore. I am ready, and I bet you are too. So, let's go.
Michelle Rathman: Hey, welcome back to The Rural Impact, Dr. Jeff Strohl, director and co-founder of the Georgetown University Center on Education and Workforce. I mean it when I say thank you for joining us again on The Rural Impact. We have a lot to talk about, and I can think of nobody better than you to have this conversation with.
Jeff Strohl: Thank you. Thank you.
Michelle Rathman: Okay. You know, there is a lot going on. I say that I feel like we're just on this never-ending treadmill, but what we really want to talk about today is there, you've got a, a great new report out that I've been waiting to talk to you, but I think it came out in June. But honestly, Jeff, it is impossible not to see a headline today about the challenges facing public schools, community colleges, university systems across the U.S. and of course with rural feeling the impact in ways that other areas are not.
And, there's a number of reasons for that. So, with that said, I'd like to just have you start us off from your big picture view, a few insights on how the Trump administration policies are having an impact on both education and America's workforce through a rural lens. So, what could you help us start with unpacking?
Jeff Strohl: Well, I mean, this is a hard question 'cause from our perspective on some of the educational side, it's not clear that we're fully have felt the impact. So, but they're big. So, we know that the funding cuts hitting across the rural K-12 is gonna have an impact on our ability to create pipeline of talent moving forward.
and we know that employers, as much as there's initiatives to try to revitalize manufacturing and other industries, there's no reason for a manufacturing firm to move somewhere if they don't believe that the workforce is qualified at that point, and at the education system is good enough to create replacement workers.
So a lot of the underinvestment happening, or the clawback of investment in the rural areas is gonna be damning. And then secondly, I've got a big concern about the push for vouchers because you need to have enough people in an area to create a new school system. The voucher might do on some of these, , more private schools.
In the rural areas, they're, depopulating. So, it's gonna be more difficult to, have a new type of school system evolve, even if vouchers were to be successful. And my past history in this world suggests that it's a 50/50 bet. You know, you don't wanna cross a bridge if you only have a 50 50 cent chance, to cross it.
So, this is one of the big fears. And then. You know, health, health issues have multiple impacts, I think, on both the education and then the workforce. So let's just step aside from health support services, which are very important, but the investments that are made in rural hospitals create jobs and, and help move the economy forward.
So, I think we're gonna start losing that as well as, again, the health of those populations. And we see then, layered on top of this on [00:03:00] the workforce side is with our immigration policies, we're seeing huge amounts of labor both, you know, official and unofficial, laborers being scared outta the country.
It's a very difficult solution to increase our labor force participation 'cause workers in our who are out of the labor market are out for a reason, disability, we know we had the opioid crisis, and the administration isn't ponying up major investments to, to have education and training policies to help those, students, those potential students that you want to draw back in the labor force.
Be work ready 'cause they're not going to be work ready now. So, this revitalization of manufacturing, well it, it's unclear that a firm's gonna go to a rural area when it's going to have a much better workforce closer to a city.
Michelle Rathman: All of those are such excellent points and could be each of them an episode on their own. And you and I were kind of talking offline about, you know, this, you know. For example, with rural health, the rural, transformation fund, the Rural Health Transformation Fund. And I just wanna tell our listeners, if someone tells you that it's the Rural Hospital Fund, it is not, it's the Rural Transformation Fund.
And a big, big part of that, Jeff, is kind of recognizing the importance of, of, more domination of AI, for example. And, you know, you, you kind of touched on it just a moment ago. I mean, that is not gonna re, AI is not gonna replace the thousands and thousands of kinds of jobs that we need to keep our, you know, to keep businesses running and our economy going.
What, what are your thoughts about that?
Jeff Strohl: Well, I mean, you raised a really great point. AI does not buy stuff. 70% of all economic activity, in almost any economy of a capitalist economy is farm consumption. So, if it was the case that AI replaces all the jobs, they're not gonna be people to buy stuff and things, things will trail down. So that's one thing.
Secondly, I do believe that there's an awful lot of hype and little evidence, smoking, no fire when it comes to AI, at this point. I do believe it's going to be disruptive, but the US economy has had disruptions before, and I think that we can learn to work with it. And I think the thing that needs to be understood about AI is it's gonna be, I think, impacting at a skill level, at a task level, and not necessarily in an occupation level.
So, if you look historically in the United States over from like 1970 to about 2010. Two thirds of all changes, growth in EC and educational requirements, were inside of occupations as task change. So, if we move towards an AI enabled world, we need a workforce that's able to work with it, and that population is more likely going to be college educated.
So, as we pull back on, investments in rural post-secondary education, we're going to be, again, eating the seed corn. We're not going to be setting up a workforce that's able to move with changes in the labor market, and reliance on manufacturing and agriculture are going to be a little difficult.
Michelle Rathman: Okay, Jeff, let's shift a little bit because we talk about, and I wanna really get to your report about bridging the middle, skills gap. It's so important and middle skills gap brings me to something I read this morning and as we talk about in rural, I mean there's a big push to grow your own is a term that we hear so often is to make sure that we are engaging younger people in communities, grade school, middle school level through high school, and then following 'em all the way through, hopefully community college and maybe a four year institution.
But just today, I read a piece about a middle school in Oregon that will be closing come fall, setting the loss of the Secure Rural School funding, which for those of you who do not know, is a program that is run out of the US Forest Service.
Congress failed to reauthorize it and the One Big Beautiful Bill Act or H.R.1 ended some mandatory public land payments that rural communities have relied on since, 1908, diverting those funds away from local budgets to pay for tax cuts. I mean, that's just the reality of it. So, at the end of the day, when we're taking a look at $207 million being taken away from Secure Rural Schools and Community Self-Determination Act, I mean, what is that gonna mean for our young people to be even prepared to qualify to go to community college, even trade schools?
Because there are some requirements. Even going through that transitional process.
Jeff Strohl: Yeah, I'm greatly worried about this disinvestment in the, in the K 12 and I keep using the, you know, eating our seed corn. You know, we need the workforce, and we keep people talk about the future of work. And when you say that you have to be thinking about the workforce of the future. And if our K 12 system is not preparing students to move forward and if we see stuff like, you know, disinvestment in broadband, right?
So, a lot of the rural students can get to an AP or an IB course, perhaps online if it's not being provided in their schools. So, a lot of these pieces are just gonna undermine that rural workforce. So back to the thing you with manufacturing. You know, to get a manufacturer to move to a local area, you want to make sure you've got a good workforce that is technologically savvy because the modern, manufacturing facility is highly robotic, highly computerized.
You need to have technical skills, and most of the modernized career and technical education programs acknowledge this and build towards having at least a post-secondary linkage. So, if you're going, making it outta high school prepared. You're not gonna make it into college prepared. And we'll do a big disservice to these students and we kind of urge them even into technical programs if they're not ready.
'Cause they get saddled with the debt but none of the benefits 'cause they tend not to succeed; they tend not to graduate. So it is, you know, it's a slow-moving train wreck in that regards. And so, we want in the current administration have this reinvestment in skilled blue collar trade school tub. But your, your point's, well taken, you need to have students ready for those programs 'cause it's no longer hammering a nail.
Right. You know, the middle skills work is, you know, become more and more complex and you just very little of, it's available to workers with just a high school degree.
Michelle Rathman: Yeah. And then you take into consideration, again, we connect the dots on this podcast, $550 million in funds that connect rural Americans to the internet, for example. And so, when you don't have robust community colleges, you might rely on e-learning. And I mean, the slow-moving train wreck paints such an image of my head.
Alright, I do wanna move over to your report. The bridging the middle skills gap, connecting a diverse workforce to economic opportunity through certificates and associate's degrees. And I know that you guys didn't parse out rural per se. However, the populations that you do discuss can certainly be identified is more predominant, especially when you take into consideration that, you know, rural students are enrolling in post-secondary education at a far lesser rate than shall we say, those who are, might be in metropolitan areas.
So, talk about this report. I know it's a big one. Just give us an overview of, you know, why you guys did it and what, what were some of your high-level findings. It's really fascinating.
Jeff Strohl: Well, thank you. Yeah, I really enjoy this work and it's something we hope to continue with. The main, underlying premise of this work is trying to think about how we can help community colleges in particular align with projected labor market demand. 'Cause often there is a disconnect between, when students start school, they look at the current labor market, but when they hit the the, when they graduate, it's a different labor market.
So, first piece of this is to kind of connect with projected job demand and then take that information and help the community colleges think about what kind of programmatic delivery is going to meet that projected demand, as they go out. And so, so the first idea here is how to think about alignment between program delivery and labor market demand.
And as you can see in the report, it falls short. Now, the one thing that we're not a hundred percent certain of is what would a natural rate of alignment be? That's a hard question to ask 'cause the US labor market is based on a lot of churn. What we do is we educate, and train students and we toss 'em into the labor market and let 'em splash around, job churn.
And we have about 12 job changes in the in the career. So, it takes a little bit of time for a student to latch onto the right career. More information about what's there and how their program aligns. We hope will help students make better decisions and help community colleges, especially since they're the most underfunded portion of our post-secondary system, help them make different or better enrollment management choices.
Now we want to be careful, we don't want to use work like this to just slash and burn programs 'cause there are a lot of community college programs that are aimed at transfer and provide more of a general skillset of what we focused on, primarily. Where programs where you have a more of a named program to a named occupation.
So, there was also a, a set that, links over. So about, I forget in the, bridging the middle schools gap, all the numbers, but overall in our earlier report called, the Great Misalignment, only about 50% of programs in the community colleges, and here we nest, we look at the community college delivery for entire labor market shed area about 50%.
So that's telling us at about 50% of the programs could be reallocated, to meet projected labor market demand. And this is really important, because we're using education too, as our vehicle, our chosen method to give people access to economic opportunity. And so, the alignment is the first step, right?
That your program has a reasonable chance of landing a job. 'cause you can have a really good program, if it doesn't pay attention to, , demand in the market, you just create unemployment for the best program in the world, right? , and so, and this is doubling important for the rural areas that are more likely to be served by a single or a, a lower number of institutions.
So, they're really, the demands upon those institutions are much more broad 'cause they still have the community service aspect. They've got the transfer aspect, and they've got the demand to kind of, satisfy local labor market demand there. So, it, it's, it's a tough, a daunting task I think, but it's something would be important for those, those institutions.
Michelle Rathman: It is. It is so complex. And there was, I kind of highlighted this line. It said to address the credential shortage and open up high paying jobs, the re your report says that educators, policymakers and employers must remove the barriers that exist at multiple junctures in the pathway from school to work.
So I wonder if you could talk a little bit about those like barriers in terms that our listeners can say, this is concrete.
Jeff Strohl: Yeah.
Michelle Rathman: We have now, we, we have an assignment, if you will.
Jeff Strohl: Yeah, I mean the, the barriers part of this is fairly lengthy, so I'll just try to try to summarize. We've got the problem of first time go, well, first going, you have to start to go, and we know in the rural areas, fewer students are even going to go. Secondly, we've got persistence problems, right? So, if you have a financial burden or you need to work as a student,
Michelle Rathman: Which many of them do
Jeff Strohl: Yeah,
Michelle Rathman: most, I should say,
Jeff Strohl: Yeah, it's actually the modern, modern model now, that lengthens the time that you have to be in school. So, a two year degree in the United States is now actually takes three years, a four year degree, takes five to six. So those students are getting encumbered with more and more debt, and they have more.
The longer you're in school, the less likely you are to graduate. So that in itself is a big problem. Back to your K-12, preparation issue, modern, the modern economy demands sort of this, a bit of STEM education, knowing to do your math and et cetera. And so, if the k 12 isn't providing this, then we pass it on to the community college and say, well, let's do developmental ed.
What do they do with developmental ed? They send the kids back to high
Michelle Rathman: Student's first exposure to it.
Jeff Strohl: Yeah, exactly. And they basically send them back to high school where they couldn't do well. And hopefully, the movement might be towards what we call learning, contextual learning. So if, like, I learned math as a carpenter, not in school.
I failed outta college, did a carpenter and all of a sudden learned how to do math. Same with many of these, more trade-oriented pieces. We should teach, students who have suffered, and not done so well in math, in high school, math in their career 'cause then they become interested, they become attached to it, and they can learn, I think much better.
So those are some obstacles. And then of course we have the single parent. We've got the first generation, you know, problem meaning that for those of you who whose parents did not go to school, there's not necessarily a home community that understands the challenges that you have on studying, working, transportation, and especially back to the broadband issues.
And so they kind of, it, one of my professors called it snowballing, non ality. One thing adds to the other, adds to the other, adds to the other. Any one of them by themselves doesn't necessarily mean you won't make it but put 'em all together and it's very difficult. And the graduation rates at community colleges show that, right? I mean, they're very low for a variety of reasons, and, you know, it's, it's tough.
Michelle Rathman: You know, Jeff, I'm gonna put one other condition, if you will, in here, which is now what we're seeing with respect to, health policy that has onerous work requirements and the shift towards mandates for employer-based insurance. Oh my gosh, how hard is this going to get? I mean, I don't even know if you guys have even touched on that, but these, the, the, these are the things that I'm looking at is that, so how do you make the determination, I want to go back to school a, a rural adult learner, but if I don't meet these requirements, and I mean there's just, it seems to me that we've just added a significant amount of new barriers, , potentially as a result.
Jeff, I wanna go here because, you know, community colleges, and I've, I've traveled to so many different rural areas, like four-year colleges, community colleges, many of them are the best and only option for rural learners, and they are also grappling with disappearing federal grants.
They are also being squeezed, if you will, by policies that, um, want to erase diversity, equity, and inclusion guidelines. And we know that in rural communities, those, that population those populations, it's not one singular, but rural is diverse, period. End of sentence. And so, so with all of that being said, ,how do you see.
Let's discuss kind of the impact of these policies with community colleges. I mean, they're not going to be exempt from these policies and the mandates that come along with them.
Jeff Strohl: Yeah, that's, that's a big one. And we know that the community colleges carry more of their educational costs than other institutions to start with. And then that's been chased down by, up, by, legislators cutting even more funding for the, the community college. So, add the rest of this on top. It's going to be very difficult for those institutions to meet need, especially in high-cost programs.
So, if it's the case that we, let's say, computer manufacturing, right? You require a lot of money in the lab there to do that. But if you don't have it, you're not gonna provide it. And it goes back to this downward spiral for trying to get manufacturing in, to the local economy.
So. then another level of these, funding cuts that you don't think about. It's a just a sort of a ripple turning into a tidal wave. My dad, when he was alive, lived in bi Birmingham, Alabama, where they have a very large medical facility. So, you pull away federal dollars from those grants. That's gonna really lower economic activity. You pull away indirect costs, which also have a spillover effect, then people start to leave.
You're going to have the, I'm gonna say like the rust belt problem, right? We're gonna have this rural problem that you're gonna keep pulling away foundational elements that feed into, creating robust localized economies. So, if the community college is in some worlds, you have, you know, higher level professionals at the four-level year level, every one of those people needs support services through technicians, through, you know, people with associates degrees, certificates, and certifications. Move one of those, you move three or four of those people out of the band. And so, you don't have funding coming in to provide the services. You don't have people who can afford to go and it's, it's just scary.
I just keep using the analogy of eating our seed corn. You know, we cannot, let's just say tariffs would work wonderfully and revitalize America from 7% production workers that it has today, back to the 30 that it, 30% that it had in 1979. It ain't gonna happen overnight. So, the people who are going to pay the price for this are those who are dislocated.
And if we don't have, education and training related services and investments, we aren't gonna be able to help those, dislocated workers. And the community college is the place that we tend to do that because it's more able to work, it tends to historically work more with employers to try to, you know, change curriculum to meet employer needs.
And so were, we're chopping, chopping all the legs out from under the rural stool in this, in this scenario.
Michelle Rathman: Yeah. And it makes me think be, before I talked to you about policy, it makes me think about even what this might be doing to our rural educatorsâ workforce. When you know that you are working at a deficit, when you know that the resources will not be there, you, you could potentially lose your motivation to even want to enter.
Because I know that in nursing, for example, we have, it's, we need nurse educators, right? We need, we need educators who are teaching those courses and so forth. So, I am sure there are implications there as well. Are you seeing anything?
Jeff Strohl: I'm not seeing anything, but I'm concerned going back to the voucher discussion is, you know, teacher education is extremely important. It builds, you know, helps build, build our citizenry up and so, if people in the rural area don't want to work there and they're not being supported, and then all of a sudden you get rid of the school structure, what kind of incentives are voucher driven, newly private, innovative schools going to be able to create, especially if they're small scale. Right?
And so, one of the things that is lost with, some of the charter schools and some of the voucher programs is teacher security, right? So, would you come into a position where you're on a one year contract?
I mean, you're gonna move to rural wherever, you know, if you only have a one-year contract, you have no guarantee of security. I mean, there are efforts, you know, where they give bonuses, et cetera, trying to revitalize, but that's gonna be undercut by this movement to rethink public education through the kind of these voucher efforts.
How much pickup there is in that, I don't know. But, you know, work that's been done on vouchers is they suck more dollars from the public, schooling system than they deliver in education in the voucher side of the house.
Michelle Rathman: And we are, we are, we have yet to really understand the quality of set education and it, that is the, the proof is in the pudding, as they say, and how our students, what their outcomes are. That's another whole conversation.
Before I let you go, Jeff, the last, the part three of this great paper, which to our listeners, we're gonna make sure the links are on our website for you to go, go ahead and, and go to Georgetown's website to download this.
But you talk about policy and practice recommendations. Can you give us a couple of doozies that, that our listeners can take away because, you know, we all responsible for advocating for this policy as well. It just can't just be, you know, employers or, or these higher education institutions. We all play a part in this because we are going in this future together, whether we want to or not.
So what are some of the policy and practice recommendations that, that you, that come to mind?
Jeff Strohl: Well, the ones that I are, my, most important to me is one, I think we really need to up our investments in career and college navigation in the world that we're in today, there's so much data there. I couldn't make it through, through it myself. My son who just went to college with somebody who does data, just did what his cohort did. We need better guidance for these students to make it forward.
Secondly, I think it's extremely important that we have employer engagement in part of this process, the employers have pulled back from their commitment in the American workforce. They don't train as much as they used to. We move to, we move from a layoff model to a fire model in about 1992-93.
It turns it so that the workforce, in some sense, is being created as a spot market. People, the employers, when they talk about, I can't find workers, they mean I can't find workers today, rather than a worker that can even train up. And so, we really need to get this engagement because the data, you know, in our report is kind of a higher level.
We need the employer to get engaged and say, we're falling short here on these particular programs and invest so that the students have higher likelihood of becoming employed, what kind of engagement can we get, especially in these rural areas, right? In these rural, I worked with a lot of those firms, and they are really engaged.
I just need to up their game and so does the, the states, the states have to help here, which is we want it tighten that engagement sometimes by bringing the workplace and the classroom closer together so that the employer knows some, some risk sharing agreements, so that the employer. Knows when they're taking a risk on a student from one of these schools that they have a high likelihood of quickness to productivity, staying with the firm, things like that.
And so those are the two biggies, for me.
Michelle Rathman: Yeah. Especially since we know pipelines when they're dry, man, they are dry. And they're, and that, that is what is what I've been thinking about so much. I mean, it's not about having a bench, it is about having a robust pipeline. And that's shrinking. I mean, it there and, and that's happening for so many reasons.
Oh my gosh, Jeff, anytime you have new, new wisdom, new reports, new data for us, we. Welcome you to come back. I wanna tell our listeners it was a year ago that we had Jeff on, so thank you so much and for the rest of you do not go anywhere. We're gonna bid farewell to Jeff, but I'm asking you to stick around because this DOT connecting conversation is not over.
And we're gonna shift over to the impact of these policies on rural economies because they are connected right after this important event announcement from our partners at the National Association of Rural Health Clinics. Sit tight. We'll be right back.
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Michelle Rathman: Hey, we are back. And now it is truly my distinct pleasure to welcome Gbenga Ajilore, Chief Economist of the Center on Budget and Policy Priorities. Thank you so much for joining us. It's been too long, but I am an avid follower of yours on LinkedIn, wherever I can find you, it's great to have you here.
Gbenga Ajilore: Thank you for the invitation. It's my honor to be here.
Michelle Rathman: Oh my gosh. Well, listen, as I've been saying, there is a lot to talk about. I don't think we can have enough of these conversations enlightening connecting policy to quality-of-life conversations. But Gbenga, you know, I mentioned to you that we kicked off the episode with my conversation with Dr. Jeff Strohl from Georgetown University Center on Education and Workforce, and we had kind of a wide range of discussion focused on the impact of the Trump administration's policies with respect to education K through 12, community college, as well as, a paper that they put out, the need to address the growing gaps, and they are growing and barriers related to middle skills development.
And, you know, a significant of that portion of that conversation centered on eliminating funding for education, which will of course disproportionately affect rural areas. It can help but not because that's what's that's the trend that we see. And, and we know that by, you know, that ripple effect.
And because nothing happens in a bubble where that's concerned, the lack of investments in education in, in my view, will then affect job training, which is gonna impact our workforce. It's kind of a cascading; he described it as a tsunami inside of a hurricane or something like that.
So, what I really wanna start with you is that in June you wrote a really compelling piece. And we're gonna make sure that links to your information is on our website, and it was titled, 'House Republican Reconciliation Bill would harm rural households, communities, and economies.' Well, we have shifted from would to will, and so I wanna talk about those impacts. What are they on rural households, communities, and economies?
Just give us that big picture and lay it on us. Don't, don't spare us. We want; we need to hear it all.
Gbenga Ajilore: Yeah, so thank you for having me and appreciate the kind words about my piece. What we're talking about is when you look at the bill, it's basically cutting taxes for the rich and then cutting spending on low income and moderate-income households. And that's done basically through cuts in health coverage and cuts in food assistance.
And so, we're looking at, you know, the largest cuts to programs like Medicaid and SNAP that we've seen in history. And these weren't, you know, really well funded programs to begin with. So, the way this is happening is by making people ineligible for these programs. So, like with Medicaid, what they're doing is they're adding work requirements, and these are not really work requirements 'cause people work.
A lot of people who are in Medicaid work, work multiple jobs. What they're doing is making people report their work requirements. And so that adds a, an additional layer of bureaucracy of red tape. And so, when it becomes difficult to report, then you get kicked off. And so, one sort of example here is they have a 70 hour work requirement, monthly work requirement, which on the face of it seems benign.
But if you think about the people, especially at low-income households, the jobs that they have, they don't have control over their hours. So, one month they may be working 80 hours and able to meet these re require reporting requirements, but the next month it might be 60 hours and then they get kicked off.
And in the next month it might be like 65 hours. And so that's the kind of thing, and that's where they get these quote unquote savings in these cuts. With SNAP, they're also, they have work requirements. But the other thing is, and this is where it actually really hits rural communities, is that a couple years ago there was a fiscal responsibility act where they, added work requirements on SNAP, but they exempted a bunch of different groups, veterans, homeless populations, and then people outside the ages of 18 to 54.
Well, what this bill did is that it went from 18 to 54 up to 64, and we know that rural America is a little bit more aged. And so now you have these people who weren't subject to these requirements. Now they're subject to these requirements and they're gonna be, and then these people are get kicked off.
The other thing that's really tough is with SNAP, they're putting some of the onus on the states to pay for it, and we know that states don't have the ability, like the federal government to run deficits and debt. They have to have a balanced budget. So now you're adding more costs to the states and they have to make a decision about how do we make up that shortfall.
And so, some states are not gonna make up that shortfall, and it's gonna do it by kicking people off. And so, I can keep going, but that's just basically what is happening with the mega bill in terms of making it harder for low and moderate income households.
Michelle Rathman: And on top of that, and I'm gonna put this, I wanna mention this this morning, the day we're recording, this is August 22nd and I just listened to Julie Rovnerâs âWhat The Health' Podcast. And I mentioned this because it is the anniversary of Medicare and Medicaid, and it's not just the work requirements, it's the fact that the systems, the infrastructure is not there and is my understanding that it attestations are not gonna be accepted. That there's gonna just the paperwork. And I, as I understand, the squeeze is really gonna come with enrollment and that's, you know, how they're gonna achieve some of the savings. And so, you know, the, we know the impact is gonna be devastating, but it's the layers of complication, I think were done quite intentionally. That's my opinion.
Okay. I do wanna dive into tariffs and I never thought I would say that on a Friday. But first I do wonder if you can talk a few moments, 'cause I know it's all connected. You also did a recording, kind of a video blog if you will, about your thoughts around the July jobs report, including the, the rural impact.
If, if you could kind of parse that out for me. And perhaps touch on the topic of us immigrant workforce, which it does account my understanding about 5% of the rural workforce nationwide. These have to be connected, right?
Gbenga Ajilore: Yeah, so on the July jobs report, it came in really under what there were expectations, and there was a, you know, there's a lot of stuff about revisions and there was stuff about the Bureau of Labor Statistics that we won't go into. But one of the things is that it showed is that there's softening in the labor market that the jobs are not there, and a lot of it is because of, as you mentioned, tariffs.
Tariffs basically are attacks on imports, and so we kind of wanna give a broad overview of tariffs. The average tariff rate at the beginning of this year, January 2025, was 2.4%. Right now, given all the stuff that's happened is 18.6%, we're looking at a ninefold tax increase on goods that everyone spends.
So, and the tariffs are, you know, steel, aluminum, fertilizer. So, we think about the agricultural sector, you know, they're spending more on tractors, on fencing, grain bins, fertilizer, you know, this is hitting, you know, this farmers harder. As you mentioned, and there's immigration. So now you put that on top of it.
So, you have these higher cost, you're losing your workforce. I just read a story in Florida where, you know, there was a farmer who lost like 50% of their workforce, you know, once some were deported. But then even the migrants, they didn't just show up for work. And you need you need people to, you know, have the farm.
And so, if you can't do that, you're gonna be losing out. So that's also going to increase prices. So, you have all these competing factors that are just kind of going on top of each other that's harming the, the labor market, but then also grocery prices, prices at the stores, , and back to school season right now.
We're seeing prices of things like that going up. You know, little things like index cards, binders, folders, and so we're having all these factors that are just hitting everyone hard, and you know, when we hit the economy hard, we know that that hits rural America much harder.
Michelle Rathman: Hmm. It seems to me that there's a whole lot of attempts to distract from the core of what you're talking about, and then I think about what it's going to do to in rural, specifically, like the county budgets, like where, how are rural economies, if you just look at it from a you know, community by community level, I mean, I just cannot imagine that there's going to be, you know, any silver lining anytime soon.
Gbenga Ajilore: No. You may bring up a great point about budgets where, again, they have to balance their budget. And so, you have like a number of states who have been cutting income taxes. There's talks about cutting property taxes. This is funding the revenue for these local governments. And so, when you're taking away revenue, you're increasing the burden in terms of cost, like on SNAP, on Medicaid, things like that.
It's like how do you adjust? And even then, you know, I keep talking about all these things that are laying on top of it. Recently, the Department of Agriculture is doing a reorganization. We have that we've lost lots of federal workers, and everyone talks about it in terms of what's happening in DC and the workers there.
But think by the Department of Agriculture. Think about all these kinds. They have a lot of regional offices, a lot of field offices. Think USDA has lost 15,000 workers. A lot of these have been in the state, the state offices, the field offices, the places that are really close to these rural communities.
And so now you have this added impact in terms of the county budgets, but then the workers who help service these communities are gone now, and so now you've lost out there. So, it's all these compounding effects and it, it's just one of those things where people, once they start to feel it, it's almost too late.
Michelle Rathman: Yeah, because we take it for granted. People for the most part. I mean, I, I would go kind of, kind of do, on the street interviews and say, Hey, what do you think happens at a USDA field office? And there'd be crickets. 'Cause people don't understand it until, until it's gone. And that includes, you know, I was reading a piece about all the inspectors that are not there any longer, food inspectors and so forth.
And so, certainly, I mean, it is like, coming to a pillow fight with, with your pillowcase loaded with bricks and, and that is what we're using right now.
Okay. So, there's been some talk about, well there's, you know, we're gonna get some tax cuts or, or maybe tax credits. So, let's talk about tax cuts and the reality of what this means for the average, if there is such a thing, rural household. I mean, how, how will, how will rural households benefit from massive tax cuts? I know the answer, I think.
Gbenga Ajilore: So, the, I mean, the, the answer is they, they won't. Unless you're in the top 10% or top 1%. Then there's gonna be a benefit because whenever you cut taxes, it's always skewed towards the wealthy. So just some basic numbers, top 10%, they'll have a benefit of about nearly $8,000 from this tax cut. And then everyone below that is gonna lose.
So, if you factor in what's happening with tariffs, everyone else is gonna lose the bottom 10%. They're gonna lose about $3,000. Now some people will say, well, does these different provisions that are helping people out. Like the child tax credit, they expanded the from 2000 to 2200, except it's not refundable.
And because it's not refundable, if you don't make enough money, you don't see that extra benefit. So it's one thing, and the thing is they could have made a refundable, which then that's gonna benefit middle, lower income households, but they didn't. So that extra, it doesn't go to them.
The other one, the estate tax. You know you have the estate tax. They had this exemption, which was 15 million before they expanded to 30 million. That means, so the estate taxes, what you could pass on to your kids, and they actually, the justification is that, oh, this is gonna help our family farms. But as we all know, family farms aren't paying that.
And in fact, there's something about, I think, like a thousand wealthy estates are the ones who actually are subject to the tax. But now that they've increased that exemption, they're looking at an average of almost $5.7 million benefits that thousand estates. And so even if you break it down to the smaller provisions, it still doesn't benefit low- and middle-income households and rural households.
Michelle Rathman: None of this does. I mean the, the provisions that cut Medicaid, that everything that you've talked about. Okay. So, I've been hearing a lot and too much to my chagrin, and I understand it. I do because we have to be able to just put one foot in front of the other every single day. But I've been hearing a lot of experts and consultants talk about how important it's for us to adapt to the conditions created by these policies.
Which would be, I can adapt to weather. You know, we are, we all find ourselves adaptable in different situations. But what are your thoughts about adapting? I mean, how do we really adapt to already underfunded rural programs now cascading negative impacts of cuts and rising costs? I mean, what is another action we can take in, in your view, other than just adapting?
Gbenga Ajilore: I struggle with that framing of adapting because we've asked particularly rural communities to adapt to a lot of stuff that they shouldn't have to. At some point you have to say, no, they don't, shouldn't adapt. We should actually focus them. They should be the focus of our policy. They shouldn't, it shouldn't be like the aftereffects.
So, like what I think about is advocacy. How do you advocate? How do you tell the story? And so, the thing is, is looking at how are people impacted? So when you say, well, the Medicaid cuts aren't gonna hurt, or people should be working if they're gonna take SNAP, tell the stories of the people who are working and tell the stories of the grocery stores who accept SNAP, who are losing out now, because people, you know, you go to these little stores and it says, oh, we accept EBT, and that funds quite a bit of revenue, especially in rural communities. And so now you tell the story, it's like, well, these people are not shopping anymore because they don't have the funds from SNAP that helped us do that.
You know, our hospital, you know, we used to have an OB practice, but now because we have less people insured, now we have to give that up because it's too costly. Now that person, instead of going to that hospital is like 20,30 minutes away, it's two hours away. Right? And so, but telling those stories, getting that stories out there to see that this is actually really costly.
You know, you could talk about 20 million people are gonna lose insurance or how much these big numbers,but the individual story, the people you think about the communities. Just the other day they're talking about they were the solar and wind panels that they're gonna do restrictions on that. And I was reading a story about this, grocery store in Pineville, Kentucky that, you know, was able to compete with the larger grocery stores.
They've been there for 60 years because they put a solar array in it and now, they're able to have lower costs. And so, like that grocery store was very important, and telling that story can inform why these things matter. So, finding these stories, telling these stories, getting it out there and why it matters and why it helps create these vibrant, strong communities, rural communities.
Michelle Rathman: I, that's a great example. Last year I was in rural Oregon and USDA Rural Development was responsible for funding solar operation on the roof of a brewery of a local brewery. And it created hundreds of jobs, you know, PRI temporary and then permanent jobs after the fact. And so, I love what you said about telling your stories, and I think what one of the things that's so important is not just telling the stories and pushing 'em out.
Maybe you'll agree with me, is that like, this is where the rubber meets the road. I tell people we are not resting, so our representatives can't rest either. Bring them to your communities and, and I we had a conversation last week about the fact that sometimes politicians don't feel the need to visit communities, any anymore.
We, we've gotten to that place and so telling the stories and having people come see it firsthand and hear those stories, because I wonder if that might get us a little bit more traction than just simply trying to send out a, an email or show up at someone's door. But anyway, oh my gosh, Gbenga, listen, I really mean this anything that you got for us that connects the dots between these policies. And the economics of it in rural, we welcome you back anytime, you are most informative and I do encourage people to follow you. Tell us where they can find you.
Gbenga Ajilore: So, they could find us, find, find me at the Center n Budget and Policy Priorities website. And then I also am on Twitter, Blue Sky and TikTok. I've started to do a lot of TikTok videos and I have some rural focused TikTok videos too.
Michelle Rathman: Well, you are braver than I because I have not gone there yet and I might. I might not anymore. But anyway, thank you so much Gbenga. And for the rest of you do not go anywhere. We'll be right back with some closing words.
Michelle Rathman: As always, my thanks to Jeff and Gbenga and Alexa for their insights. And as a reminder, look to the resource page on our website, theruralimpact.com. Really easy to find us, and you'll find links to the reports and blogs referenced in this episode. And while you're there, just take two seconds, just. Two seconds to subscribe so that you'll receive our e-logs with a recaps.
Details about upcoming episodes, including, news about a few new in-depth series that we've got in the works for you. Also, another thanks to our partners at the National Association of Rural Health Clinics. And a reminder that if you are interested in growing your rural reach, reach out to us to explore how the rural impact can help you do that.
Including bringing the podcast to your event or a gathering. We love taking the show on the road. Be sure to follow us and me if you are so inclined on social. We're on LinkedIn, Bluesky, Facebook and YouTube, and please be sure to leave comments and rate us. We do really appreciate when you do that. My thanks to Brea Corsaro and Sarah Staub for all the great work behind the scenes.
And until the next time, you know, I'm gonna say it again. I invite you to take really good care of yourself. And to the best of your ability, all those around you. We will see you soon on a new episode of The Rural Impact.
