NSAC's Blog

USDA Economic Research Service Issues Brief on Rural Economy

October 8, 2010

On Wednesday, October 6, USDA’s Economic Research Service (ERS) updated its briefing page dedicated to Rural Income, Poverty, and Welfare.

According to ERS, after unprecedented rural growth in the 1990s, rural development has stagnated and even declined in many areas.  ERS points to the recent economic recession as the source of lasting troubles in rural areas.

According to the brief, from 1993 to 2000, real median income for nonmetropolitan (i.e., rural, or nonmetro) households grew by 10.5%, and the nonmetro poverty rate fell from 17.1 to 13.4%.  However, between 2000 and 2008, nonmetro median household income decreased from $41,145 to $40,785, and at the same time the nonmetro poverty rate rose from 13.4 to 15.1%, and then rose again in 2009 to 16.6%.

The slowdown of the rural economy has occurred in all regions and most rural population groups, making it a near-universal issue with national scope.  In particular, areas with a high incidence of poverty are concentrated in the South, which the brief explains reflects “the relatively low income of their racial/ethnic minorities, female-headed families, and households with children”.

Nonmetro areas classified as heavily dependent on manufacturing have been hit the hardest by the recession.  As the ERS brief states, they “showed the largest employment decline among nonmetro areas—they lost more than 6 percent of all their jobs from a peak in the first quarter of 2007 to the third quarter of 2009.”

Although nonmetro and metro areas have so far experienced similar rates of unemployment resulting from the recession beginning in 2007, nonmetro areas will likely feel the effects of the recession, such as lingering unemployment and increased poverty rates, for longer than metro areas.

This is an historical trend: as an article published in the March 2010 issue of the ERS quarterly publication, Amber Waves, explains, “lower levels of education and less access to the diverse set of job opportunities typically available in metro areas likely led to longer periods of unemployment in past recessions for nonmetro residents.”

Though rural America is largely considered a blameless victim of the recent recession, some rural development groups find fault with the lack of innovation in rural areas since the boom of the 1990s.  For example, NSAC member group Center for Rural Affairs wrote this week, “today we are reaping the scant harvest of past inaction.”  The Center and other rural groups are pushing for increased entrepreneurship and pushing to capitalize on current opportunities such as wind energy, biofuels production, and niche and value-added food markets.

Categories: Rural Development

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