Orange City, Iowa: Profiles in Prosperity

The nation's quintessentially urban magazine profiles a thriving small town in the Midwest. Because of "community effects" that increase poor children's future earnings, the New Yorker's choice of Orange City, Iowa, is an even better than they might realize.

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The first thing writer Larissa MacFarquhar tells us about Orange City, Iowa, in her long story in The New Yorker magazine is that it’s out of the way, “isolated from the world outside.” The 6,000-person town suffers from being two hours from the airport in Omaha and four from Des Moines. Until recently, Orange City didn’t even have a four-lane highway.

Yes, this had the feel of story about a small town one might expect from a magazine whose most famous cover is a map of the United States picturing everything west of the Hudson River as unpopulated sandscape.  “Isolated” from whom? Not the people who live there, for goodness sake.

But it was soon clear this wasn’t another story about rural dysfunction by a myopic urbanite. MacFarquhar found in Orange City a town where the “American Dream lives on.” “Orange City is small and cut off,” MacFarquhar wrote, “but, unlike many such towns, it is not dying.” This was a tale of rural success.

MacFarquhar tells a good story — in fact, a much better story than she knows.

We will get to the rest of the New Yorker’s profile of Orange City in a second, but first let’s turn to a massive study of American communities by two economists, Raj Chetty of Stanford and Harvard’s Nathaniel Hendren.

By following income tax records over decades, they discovered that children’s future earnings were affected by the place where they grew up. Yes, children were shaped by individual characteristics – intelligence, race and poverty. But there were “community effects” of growing up in each county that overshadowed individual traits.

Chetty and Hendren concentrated on children from poor families and they found that growing up in some counties helped these children succeed economically.  In other places, the mere fact of living there held children in poor families back.

Orange City is the county seat of Sioux County. And Sioux County turns out to be a superstar in helping poor kids grow out of poverty, according to the data compiled by Chetty and Hendren. There are only five other places in the United States better for poor children than Sioux County, Iowa.

For each year a child in a poor family spent in Sioux County, he or she earned 1.85 percent more than the national average at age 26. A poor child who spent her entire childhood in Sioux County earned more than 35 percent above the national average at age 26.

Chetty and Hendren don’t say young people earned this income in the county where they grew up. More often than not, they moved to bigger cities. But they continued to benefit simply because they grew up in places such as Sioux County.

Chetty and Hendren pinpointed the particular “community effects” that benefited poor children. These places tended to have good schools. Incomes were more equal. They were less segregated, by either race or income. People in these communities joined churches or other community organizations. They voted. They lived in safe neighborhoods and there were fewer single parent households.

Sioux County had these beneficial “community effects” in spades. Growing up there protected poor children from a lifetime of poverty, according to Chetty and Hendren. The place itself was one of the best antipoverty programs ever devised.

MacFarquhar’s article, therefore, isn’t just a profile of a place. It is a recipe for prosperity.

“They mowed their lawns often, but never on Sundays. Alcohol was considered unseemly; people would usually buy it elsewhere, so nobody would see them. Kids felt eyes watching them all the time. Adults worried constantly about appearances—were their houses clean enough, were their kids behaving nicely and doing well in school, were they volunteering for enough town projects, were they in church as often as they should be?”Dutch immigrants founded Orange City in 1870. They were members of the Dutch Reform Church and they had a culture that MacFarquhar found to be  “particular about behavior.” She wrote:

MacFarquhar describes Orange City: “There are sixteen churches in town. The high-school graduation rate is ninety-eight percent, the unemployment rate is two percent. There is little crime.”

There was a sense of place and of history here, MacFarquhar found. Children who grew up in Orange City often didn’t feel they needed to move to a big city to find out “who they are.” The community provided that identity.

The number of foreign-born residents in Sioux County increased by 7.7 percent between 2010 and 2015, a rapid rate for a rural county. As predicted by Chetty and Hendren, however, Sioux County didn’t resist this change. MacFarquhar describes several ways people in Sioux County were welcoming the increasing number of these new residents.

For example, a hundred people held a prayer vigil to protest the Confederate flags some young people were flying on their trucks. Members of one Dutch Reform church held a potluck dinner with Latino residents, sitting four Dutch and four Latinos to a table. One white couple returned to Orange City with an adopted nonwhite child, somewhat leery of how they might fit in. “It turned out better than they’d feared—Sioux County was changing,” MacFarquhar wrote. “In their small church alone, there were nine or ten families that had adopted nonwhite kids, and many Latino families were settling nearby.”

Everything Chetty and Hendren discovered in the data for a successful community, MacFarquhar uncovered in her reporting in Orange City.

There was one more aspect of the town MacFarquhar found that, perhaps, the economists couldn’t measure. People in Orange City put relationships — with other people and their faith — at the center of their lives, not things or professional success.

Sioux County is an extreme example of the good that can be found in most rural places. Three out of four rural counties have a beneficial impact on poor children. Only three out of 10 central-city counties in the nation’s largest cities can make the same claim. (See a map here.)

For generations, the country has been looking for ways to move people out of poverty. Now, coming from two entirely different directions — one literary and subjective, the other an objective reading of millions of pieces of data — Chetty, Hendren and MacFarquhar have arrived at the same answer in the same rural place: community.

The chart lists the 10 counties where “community effects” create the biggest increase in earnings of young people who grew up there. The figure in the right-hand column is the annual percent increase in earnings over the national average at age 26 a poor child gains for each year he/she lived in that county. (Source: Chetty and Hendren study)

 

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