"There wasn’t a job to be had" in Wheaton five years ago, says Mr. Hervey, the postmaster and mayor. The Red Owl Grocery Store had closed, leaving one supermarket in this small town near the South Dakota border. Six car dealers had gone out of business. When monthly government checks arrived, "you’d think the whole world was on Social Security," Mr. Hervey says.

Today, Wheaton is nurturing an economic miniboom. Town leaders are thinking of building a recreation center complete with indoor pool and putting green. The two-doctor hospital is asking for a new emergency room. The lunch crowd has to search for a parking space at Crandall’s Cafe, and regulars arrive early on Wednesdays before it runs out of homemade chocolate cake. Fast-food firms are starting to call. "They want to know what’s going on in Wheaton," says Harold Bruce, the economic-development director.

The Driving Force

What’s going on – the driving force behind Wheaton’s resurgent economy – is that four manufacturers have set up shop here in the past three years.

Across America, small, little-known towns are drawing in new factories – and shattering the myth that manufacturing is dying in the hinterlands. From 1989 to 1994, Commerce Department figures show, rural counties gained 167,000 manufacturing jobs, while urban counties lost 1,172,000 of them. The rural gains, which economists say are continuing, are all the more striking because they come as manufacturers produce more goods with fewer workers.

In the Midwest, the smallest counties are growing the fastest, says G. Andrew Bernat Jr., a Commerce Department economist who studies rural areas. And like seeds the farmers plant just outside town, the newcomers are bringing a bountiful harvest: jobs, rising populations and more service businesses.

Wheaton’s 1,755 people wouldn’t fill a third of New York’s Radio City Music Hall, but its population rose last year for the first time in more than three decades. There is even a building boom: 11 new homes were started last year, up from seven the year before. More are on the way.

More Growth Likely

"You’re looking at a trend of the future," says Wayne Dirkman, who set up a new electronics company north of here in Fergus Falls, Minn. "You’re going to see more businesses looking for small towns than small towns prepared to see them."

Powerful forces are pushing manufacturers to move to little-known places. Factory wages in such towns are often $1 or more an hour lower than in urban areas. The workers are considered far more reliable, and few belong to labor unions. Land is cheaper, and taxes are lower – especially with economic-incentive packages that people such as Mr. Bruce cobble together.

In addition, anxiety about city living is fueling the rural rebound. Rural counties posted a 5% rise in population between 1990 and 1995, with three-quarters of such counties gaining, according to a study by demographers Kenneth Johnson and Calvin Beale.

But not all. When the University of South Dakota had a competition to see which small town would get free economic development advice for a year, several were considered so down and out that they didn’t seem worth the effort. The population of White Rock, a trading center not far from Wheaton, has shriveled to just six from 600. Moreover, rural-manufacturing jobs tend to be low-skilled and thus vulnerable to low-wage foreign competition – or a sudden move to Mexico.

Controlling Growth

But for now, small boom towns such as Wheaton worry more about controlling their growth so it doesn’t get out of hand. Mr. Bruce, for example, doesn’t want to land an employer too big for the town’s limited resources. So he woos manufactures with dozens of employees rather than hundreds.

People like Mr. Bruce serve as band leaders for this rural renaissance, promoting small towns that never used to care much for such chest-thumping. A video he put together, "The Lure of Wheaton" may exaggerate his hometown’s charms, but not by much. It promises, in addition to dedicated employees, well-kept neighborhoods and strong education – and eight-pound walleye a few miles west in Lake Traverse. "We’ve got to sell the lifestyle," Mr. Bruce says.
Some towns have such plentiful advantages that they prosper almost by accident. But they are the exceptions, says Mark Helland, president of Thom Consultants Inc. in Fergus Falls. "It is the attitude of the community that is the biggest part of economic success," he says. Often, the right attitude sparks determination to find new ways to attract business.

When trying to recover from a slump in the 1980s, Fergus Falls persuaded the state legislature to allow it to start its own port authority – even though the nearest port is far away. The new agency sold bonds to spur the town’s development. Now with 10,900 jobs and only 12,800 people, local firms are recruiting workers from nearby communities, and Fergus Falls is offering a $4,000 package of cash and local discounts to each family that moves into a new house.

The Wheaton area, fist settled by fur traders and later homesteaders, became primarily a farming community, and a town history notes that by 1900 it had seven grain elevators. In addition, tourists arrived, attracted by fishing and hunting (memorialized by a huge statue of a mallard duck on the south side of town).

But by the time Mr. Bruce returned from California about seven years ago, Wheaton’s population had fallen some 400 people short of its 1960 peak of 2,086. Many families had moved away in the 1980s as farm income slumped and small farms were sold to larger operations as part of a broad consolidation. School enrollment dropped and local businesses closed.

Tired of the rat race in California, the 52-year-old entrepreneur had sold his chain of breakfast restaurants and moved back to his hometown. He started as a part-time consultant to the town, earning $800 a month plus incentives of up to $5,000 for each business he brought in.

Mr. Bruce looked for ways to stretch his $28,000 economic-development budget. He persuaded nearby Moorhead State University to produce the video for $3,200. With his cousin’s 35mm camera, he snapped pictures of the town and used them in new brochures. He designed hats and shirts with his "Lure of Wheaton" theme.

The personal touch is crucial. Once a year, Mr. Bruce stages an Economic Development Association golf tournament, luring executives onto Wheaton’s nine-hole golf course for the weekend. "Get a few beers in them, and it’s easy," he jokes. He also take executives on hunting trips to the nearby pheasant reserve.

Other residents help out. Local bankers and utilities contribute to loan pools, spreading the risk of financing new businesses. On Main Street, a giant painted thermometer tallies the $70,000 that has been donated for new business development and school activities.

Wheaton recently financed a $2.3 million water project, complete with a new 400,000-gallon water tower that replaced a 90,000-gallon one that sometimes ran dry when the volunteer fire department swung into action. The town is now working on getting direct access to the Internet, after businesses complained about the long-distance charges for going on-line.

Closing such communications gaps is important to rural towns, which can suffer from their isolation. Transportation is another traditionally weak link for rural areas. Wheaton’s location isn’t ideal, but is better off than many towns. It is within an hour’s drive of two interstate highways, has an airstrip for private planes and is 80 miles from the airport in Fargo, N.D.

New manufacturing facilities are built with municipal funds and then rented to the companies. To get Power Sentry Inc. to move in from Sisseton, S.D., Wheaton forgave two years of property taxes and charged just $1,000 a month for rent on a 30,000-square-foot building. The town even threw in a new loading dock for the 185-employee maker of electrical-outlet strips. Mr. Bruce is "just tenacious," says Robert Lovett, Power Sentry’s founder.

Since Power Sentry arrived three years ago, two other plastics companies have started up in the town’s industrial park. Another newcomer, Spectrum Aeromed Inc., which makes medical equipment for emergency planes and helicopters, recently moved into a building so new that the parking lot has yet to be paved.

One of the main attractions to the business newcomers is the work force. "The work ethic in cities is pathetic" compared with places like Wheaton, says Mr. Lovett, who sold Power Sentry to Fiskars OyAb of Finland but remains a consultant. "Here, the workers are at full speed when they come back from break, rather than taking their time. They think on their feet." He says the assembly lines are 32% more productive than they were when Power Sentry was in Minneapolis.

John Weller, plant manager at Banner Engineering Corp. in Fergus Falls, says just seven of his 70 factory workers have quit in the past two years; five of them were moving out of the area. The employees, most of them women, earn $5.75 to $6.75 an hour, plus benefits such as health insurance and a 401(k) retirement plan. Working nine-hour days Mondays through Thursdays allows them to leave at 11 a.m. Fridays – an early start to the weekend. "They love it," Mr. Weller says.

Executives and workers alike say life seems a bit easier in places such as Wheaton and Fergus Falls, Bruce Hedrick, who heads marketing at Spectrum Aeromed, recently moved from Seattle, where he commuted as long as an hour each way. In Wheaton, his commute is a three-block bicycle ride from his house. Crime is almost nonexistent; just two criminal cases were tried last year, both for drunken driving.

Not that there aren’t drawbacks. Many city types simply don’t like small-town living. Mr. Dirkman, owner of Quality Circuits Inc. in Fergus Falls, loves his home on the Otter Tail River, but his wife misses Minneapolis. Power Sentry drove prospective employees to Wheaton in limousines but stilled failed to lure many.

For promoters such as Mr. Bruce, it helps to be creative, at least when it comes to winter in the upper Midwest. Fergus Falls puts on an annual Frostbite Festival, complete with a golf tournament on the ice. Wheaton, contrasting itself with the Sunbelt, boasts of "four seasons of recreation." To Mr. Bruce, that means fishing in an ice shack in the winter.

Newly arrived companies, in turn, can run into a backlash if they disappoint local residents. Power Sentry, which temporarily laid off 50 workers last winter because of a sales slowdown, was excoriated by residents who felt betrayed. "The layoffs lasted two months, and they’ll never forget it," Mr. Lovett says. "They feel they had something to do with the company’s success." In a way, he adds, "the community was like a board of directors."

As Wheaton outgrows its dying-farm-town image, Mr. Bruce’s boosterism is meeting some resistance. Some locals note warily the increase in strangers in town these days. Mr. Bruce told the owners of the 24-room Wheaton Motel that he would like to bring in a 35-unit hotel with a swimming pool so that families would come into town for the weekend with their children. "Harold told me that, and I said ‘Harold, you’re making me mad,’" says Connie Chruchill, who, with her husband, bought the motel last year.