In the last decade, small cities and rural areas saw less growth than metro in the “gig economy” – which includes temporary jobs, contracted labor, and self-employment. But in eight of 18 industries, rural areas led the way. Some of the categories may surprise you.
Part two of three.
EDITOR’S NOTE: The nature of work in the U.S. may be changing from traditional employment to the “gig economy” – where people are self-employed, work as contracted labor, hire out through a temp agency, or freelance.
We wondered how (and whether) this trend is playing out in rural America. We asked Roberto Gallardo, Ph.D., to take a look. This is the second part of Gallardo’s investigation. Last week, part one of the series showed that the gig economy expanded in metro areas from 2003-2013, but it declined slightly in small cities and rural counties.
Although the gig economy appeared to decline in rural America from 2003-2013, the general trend masks important dynamics. Within individual industries, there’s a different story.
To find that story, we look at broad industries using the NAICS codes. (NAICS codes are standardized industrial codes that range from 2-digits [broader industries] to 6-digits [more specific industries].)
Due to space issues, we only highlight 10 of the 18 2-digit NAICS code industries. As a stand-in for the gig economy, we’re using Census data that tracks the number of “nonemployer establishments.” These businesses paid taxes but had no employees, so the data is a rough measurement of self-employment. (See the first article for more description of the data.)
First up are agriculture-related industries. Figure 1 below shows that, as expected, the ratio of agriculture-related establishments is higher in rural counties than in small cities or metropolitan areas. This ratio increased from 3.1 per 1,000 residents in 2003 to 3.3 in 2013.
What about manufacturing? Surely it is higher in metropolitan counties. Wrong. The ratio of manufacturing nonemployer establishments was higher in rural counties compared to metropolitan counties or small city counties in 2013 as shown in Figure 2 below.
Construction nonemployer establishments per 1,000 residents declined between 2003 and 2013 in both small city and rural counties, while increasing in metro counties. However, the ratio was still higher in rural counties compared to metro counties in 2013.
Uber or Lyft user? Figure 4 focuses on the transportation and warehousing industry. Yes, surprisingly the ratio is higher in rural counties compared to metropolitan counties. The reasons are unclear, and I would encourage our readers to share your thoughts on why this is the case. This industry includes air, rail, water, and truck transportation as well as transit and ground passenger transportation, pipeline transportation, and scenic and sightseeing transportation (is that the reason?).
Rural counties show a lower ratio regarding professional services compared to metropolitan counties. However, the majority of jobs in this industry are telework friendly and if broadband infrastructure improves in rural counties, this ratio probably will continue to increase in rural counties.
Similar to professional services, the information gig industry is higher in metropolitan counties. However, these too are telework friendly. As awareness of this option and broadband infrastructure improve in rural counties, the gap with metropolitan counties can be reduced in the coming years.
Your community has a bed and breakfast? As shown in Figure 7 this industry is stronger on a per 1,000 resident metric in rural counties compared to metropolitan counties. This perhaps is an overlooked asset of rural counties that needs to be leveraged, similar to transportation (see Figure 4).
Regarding arts and entertainment, metropolitan counties had a stronger gig economy compared to rural counties. However, this industry grew in rural counties between 2003 and 2013 as shown in Figure 8 and could well be an area to invest in if rural communities are not already working on it.
Lastly, Figure 9 shows that the ratio of “other” establishments (these include nonprofits such as religious, grantmaking, civic, and professional establishments as well as repair and maintenance and personal and laundry services among others) was higher in rural counties compared to metropolitan counties and small city counties in 2013.
All in all, the ratio of nonemployer establishments per 1,000 residents was higher in 8 out of the 18 industries analyzed. The rural gig economy is as vibrant as the metropolitan one.
Another thing looking more closely at individual industries reveals is that small cities and rural counties performed differently. Small cities suffered a decline in eight of 18 categories, while rural lost ground in five. Metro, meanwhile, gained jobs in all but two categories.
Although the overall trends (see part 1 of this series) showed a decrease in nonemployer establishments in rural counties between 2003 and 2013, we can see that rural is ahead of the game in certain industries. For these counties to gain more ground will require infrastructure (broadband) and know-how.
Finally, here’s a table that compiles all the information from the charts above into one place.
Next week: How does income compare across industries, and what can we conclude about the rural gig economy.
Roberto Gallardo, Ph.D., is the leader of the Mississippi State University Extension Service Intelligent Community Institute. The institute helps rural communities transition to, plan for, and prosper in the digital age. Gallardo is also a senior fellow at the Center for Rural Strategies, which publishes the Daily Yonder.