Short answer
Most local jobs depend on money that comes from outside: visitors, a mill or employer that sells elsewhere, government payrolls, retirement checks and remote workers’ paychecks. Economists call these “basic” sources. When that money is spent in town, it supports the store, the café and the mechanic, which are “non-basic” jobs. To add jobs, a town either brings in more outside money or keeps more of it from leaking away.
Last reviewed November 3, 2026 by McKenzie Community Partnership. Applies to any small town or rural area. Part of the Small-Town Economics series.
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What brings money into a small town?
List every source of outside money. In most rural towns it comes from a few places:
- Visitors who pay for lodging, meals, guides and gas.
- Employers that sell outside the area: a mill, a manufacturer, a resort, a hospital serving a wide region.
- Public payrolls: the school district, the Forest Service, fire and water districts.
- Retirement and investment income that arrives no matter what the local job market does.
- Commuters and remote workers who earn elsewhere and spend at home.
What is a jobs multiplier?
Each outside dollar gets spent again in town before it leaks away. That ripple is the multiplier. If an area’s multiplier is 1.75, then 300 new outside-funded jobs support about 225 more local jobs, for 525 in all.
Small towns have small multipliers because so much is bought elsewhere. If most supplies come from outside the area, a dollar of outside sales may add only about 40 cents more locally. Be skeptical of any project that promises a large ripple in a small town.
How much does tourism add?
In Lane County, Oregon, in 2024, every $100 visitors spent produced about $28 in local wages and business owners’ earnings. About $114,000 of visitor spending supported one job. Tourism jobs are real, but many are seasonal or part-time.
How can a town add jobs?
- Grow an outside source you already have: more year-round visitors, a new guide service, an employer that sells beyond the valley.
- Plug leaks by offering locally what people now drive away to buy.
- Help residents start and grow businesses. Local owners already know the market and are more likely to stay than a recruited employer.
- Make room for workers to live nearby (see Guide 4). A job no one can afford to live near goes unfilled.
On the McKenzie River
- In 2011, valley leaders named the Forest Service, the schools and tourism businesses as the main employers.
- Many residents commute to Eugene and Springfield, and retirees make up a large share of the population.
- Outside-money sources today include river and trail recreation, Highway 126 traffic, second-home owners, the McKenzie School District and the Forest Service.
Outside Oregon
Your state employment department publishes jobs by industry for each county. The Census Bureau’s free OnTheMap tool shows where workers in your area live and where residents commute to work.
Frequently asked questions
Should a small town try to recruit a big employer?
It can, but such deals are rare and can leave if conditions change. Growing several smaller outside sources usually carries less risk.
Do retirees create jobs?
Yes. Their spending supports health care, construction, home services and restaurants, though these jobs often pay modest wages.
Is a job at the local café “real” economic development?
It matters to the town, but it depends on money already in the area. Count it as part of the ripple, not a new source.
The Small-Town Economics series
- How many people does it take to support a grocery store or restaurant?
- What income and spending does a small town need?
- Where do jobs come from in a small rural town? (this guide)
- Workforce housing vs. low-income housing: what’s the difference?
- What brings remote workers to a rural town?
Sources
- SAGE Encyclopedia of Geography: Economic base analysis
- University of Arkansas Extension: Economic Multipliers
- Dean Runyan Associates: Lane County travel impacts, 2024
- Travel Oregon: McKenzie River Valley Tourism Studio
- Headwaters Economics: Non-Labor Income in the Rural West
This guide is general information, not financial, legal or planning advice. McKenzie Community Partnership doesn’t sell anything; we explain your options. Free to copy and adapt; please credit McKenzie Community Partnership.