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Study Finds Economic Gap Between Rural Counties Linked To Farming Vs. Recreation

BY DAVID REESE

The gap between personal incomes in rural farming communities and rural communities with recreation-based economies is widening in rural America, a new federal report released this week says.

The “Rural America at a Glance 2019” report from the U.S. Department of Agriculture studied rural America and the roughly 46 million people who live there, from people in counties close to urban areas to people who live in isolated, sparsely populated counties.

The report focused on demographic and socioeconomic trends after the end of the Great Recession in 2009 and according to report author John Pender, an economic researcher with the USDA, the counties with abundant recreation amenities like ski areas and beaches fared best in population growth and personal income growth from 2010 to 2017.

Pender’s research focused on rural American wealth and prosperity. The report focused on counties of 50,000 people and less, as well as counties close to larger urban centers.

Rural counties that relied on farming, mining, manufacturing and government spending fared the worst in personal income and population growth, the report found.

From 2010 to 2018, population grew in metropolitan counties and in rural counties close to urban areas, while population declined in other types of nonmetropolitan counties.

Employment grew in all types of rural counties except for completely rural counties not close to a metropolitan area. There were also lower rates of labor-force participation in nonmetropolitan rural areas, something Pender said is due to an older, less-educated population.

Poverty rates in rural America are highest in the most rural, isolated counties and the gap between poverty rates in these counties has grown. However, poverty rates have declined since 2013 in all types of nonmetropolitan counties.

Personal income was significantly higher and grew faster in metropolitan counties than in nonmetropolitan counties from 2010 to 2017, although personal income declined from 2015 to 2017 in the most rural and remote type of nonmetropolitan counties.

Pender said part of the reason for this decline in personal income was the decline in farm and mining income, since these industries are more prominent in more rural and remote counties.

Personal income declined in farming-dependent nonmetropolitan counties after 2013, and in mining-dependent counties after 2014.

Population declined 0.4 percent in rural counties compared to growth in metro counties, part of a long-term declining trend in birth rates and an aging population, Pender said. Employment in non-metropolitan county employment is still one percent below pre-recession levels.

Personal income in rural metropolitan counties through 2017 averaged $54,000, compared to $40,000 in non-metropolitan counties, according to Pender. This gap is due in large part to rural counties that have attractive natural surroundings, such as ski areas or beaches.

These recreation-based economies tend to attract people with higher, stabilized retirement incomes padded by dividends and other assets, even though much of the work in these economies is in service industries.

“The wages tend to be low in service industries but people are willing to live there because of natural amenities,” Pender said.


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