Small towns in Western U.S. are doing better economically than those in the East; one Montana town illustrates why

Washington Post chart; click the image to enlarge it.

Small towns all over the United States are declining, but Hamilton, Montana, is thriving. What's the town's secret? And why are small towns in the Western U.S. outstripping growth in the rural East?

"Based on measures of new-business formation, migration and job churn, Western states are significantly more dynamic than those in the East," David Lynch reports for The Washington Post. Since 2010, small towns in the West have been "by far the fastest-growing region in the country, according to the Census Bureau, expanding output two-thirds faster than the Midwest and more than twice as fast as the Northeast."

According to John Lettieri, president and CEO of think tank the Economic Innovation Group, many small towns in the West have a big advantage over their Eastern counterparts: their age and their history. Most small towns in the West were never heavily dependent on manufacturing, and therefore escaped the job losses that came with globalization. 

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"These are newer economies. They have fewer concrete cinder blocks to drag around behind them as they’re trying to grow," Lettieri told Lynch.

Hamilton, a town of more than 4,700, "has parlayed distinctive attributes into population growth, including proximity to the state’s second-largest city, majestic surroundings, a good supply of college graduates and a dependable base of federal government employment," Lynch reports.

A local microbrewery, launched by two Hamilton natives who came back after college, brings in more than $1 million in annual sales, and a federal laboratory that investigates deadly viral diseases provides high-earning jobs and the college-educated workers to fill them, Lynch reports. The town is also home to a GlaxoSmithKline plant that produces a vaccine ingredient, and has a thriving recreation industry.

"It’s a pretty sweet spot to be in," economist Ray Rasker of Headwaters Economics in nearby Bozeman told Lynch. "You can have the same job you’d have in Seattle and go fly-fishing in the afternoon. . . . It’s the quality of life. It attracts talent. Pretty soon, talent builds on itself, and word gets out."