Wednesday, April 23, 2014

Poor People are Moving to Already Poor, Rural Communities

09/27/2007
Rural and Urban Poverty Rates
Rural America has been poorer than urban areas for decades. One reason for this continuing gap is that poor people are moving disproportionately to rural counties.
Graph: Kathleen Kassel/ERS

Poverty rates are higher in rural America than they are in the cities. Only one in 20 urban counties has a poverty rate above 20 percent. For remote rural counties, the ratio is one in five. The counties that have been poor over a period of decades are overwhelmingly rural, writes Oregon State economist Monica Fisher.

But why?

One explanation is that there are structural problems in rural areas that, in a sense, enforce poverty. There are fewer good jobs in rural areas. (See chart below.) At one time, the theory was that as extractive industries (mining, oil and agriculture) grew more efficient, they had less need for workers — and that change created a labor surplus that depressed wages. Work in rural America tends to pay minimum wages, offer less security and provide fewer opportunities for advancement. Rural and Urban Low Skill Jobs

There appears to be another reason for rural America's persistent poverty, however, and that's migration. There is a growing body of evidence that rural communities are poor because poor people are moving there:

"¢ Mark Nord studied data collected in the Census that tracked the movement of people between 1985 and 1990. The U.S. Department of Agriculture economist found that people who were working-age and poor moved in large numbers to poor rural counties. It was also true that poor people left downtrodden rural counties, Nord found. But even more poor people moved in.

And Nord found that during the same period richer residents moved out of poor, rural counties. There was double impoverishment: Poor people moved in and rich ones moved out — leaving the counties poorer still, with fewer prospects for better times.

"¢ Anthropologist Janet Fitchen interviewed poor families in a rural New York State community. She wrote in 1995 that the already poor place "became a migration destination for urban poor people, causing dramatic increases in poverty rate, welfare rolls and service needs." The rural community collected the spillover of poor people fleeing the more expensive cities.

"¢In an unpublished paper, Nord later wrote that people with less than a high school education moved disproportionately to rural communities. Rural America had an outsized number of people without high school diplomas not because rural schools were failing to graduate their students but because poorly educated people were migrating in.

"¢ Finally, this spring Monica Fisher, the Oregon State economist, concluded that "the higher incidence of poverty in nonmetro compared with metro America is partly explained by a sorting into nonmetro areas of people with personal attributes associated with human impoverishment." Rural America was poor in part because it attracted poor people, many of whom came from cities.

All these scholars of rural economies and communities found the same phenomenon: People were sorting. Poorer people, those with less education and fewer skills, were sorting themselves into a large number of rural counties. And people with more education and higher skills were sorting themselves out.

There are a number of reasons poor people are moving to poor rural areas. Housing is cheaper there. People are drawn to these places in part because it's less expensive to live there. Jobs in poor, rural places often require few skills, and those jobs may also be attracting people who couldn't find jobs in urban areas where jobs demand more education and training.

Monica FisherOregon State's Monica Fisher

(The sorting phenomenon is not simply a rural phenomenon. Harvard University economist Ed Glaeser has found that since 1970 educated people have been sorting themselves into a particular group of cities. Some cities — Portland, Austin, Seattle — are gaining people with college degrees and the wages in these places are rising. Stagnant cities — Cleveland, Buffalo — are losing their best-educated citizens — just like poor, rural communities.)

Monica Fisher stresses that the sorting of poorer people into poor rural communities is only partially the reason poverty rates in rural America are so consistently high. But the effects of migration are hardly ever taken into account in rural development efforts, despite evidence that the movement of people is rapidly changing rural communities. Recently, rural development experts in the South concluded that migration was one of the least important factors in developing local economies.

"The assumption has been that persistent rural poverty had nothing to do with individuals," Fisher said this week. "So the policy implication was there had to be a lot of money put into these communities and if that happened, then poverty will fall." Policies and programs were designed to fix rural places in the expectation that these inputs would help the people who lived there.

The sorting phenomenon Nord and Fisher describe makes this single-minded approach seem shortsighted. For example, poorer rural communities educate their young only to see them move out, replaced by those with less education and with fewer skills.

"It's hard for rural communities," Fisher said. "If you educate people, they tend to leave. It's an investment you make that has a payoff for urban areas."

Nord wrote a decade ago that it is probably impossible to right the economies of poor rural places without taking into account national labor markets and urban economies. "The cause of high poverty in the persistent-poverty counties may be as much the lack of entry-level jobs and low-cost housing in low-poverty counties as it is the lack of good jobs in the high-poverty counties," Nord wrote.

In other words, as economies in booming cities improve, pushing up wages and housing prices, people with fewer skills and less education will move to more rural, high poverty counties. Unknowingly, cities are exporting their poor to rural areas.

Rural communities are then expected to fix what is actually a national problem, one that's originating in urban areas.

Comments

(No subject)

It's worse

Meanwhile, out in the sticks the school board insists we have to keep up with the Jones and spend more money on education or else (the children will suffer). This raises property taxes which hurts people who can't afford the higher real estate taxes, especially farmers. So the land gets subdivided into smaller, less useful plots and people who insisted on the higher school costs complain about development, put in zoning and take away our land in the process. This drives away the poorer people who can't afford the higher taxes. So where are they going? Apparently not to the cities according to the above article. Several years the towns people told the school board they must cut a position and other things. Instead the school board finagled the budget by doing things like pushing the bussing costs from one year to the next to make up the difference. Yes, the solution is to be involved and to vote. I vote every year at town meeting, against the school budget. Still it continues to rise and with it our property taxes. Still, it is far better to be 'poor' in the rural areas than in the urban areas - at least out here we can grow our own food, hunt, trap, cut our own wood for fuel and build our own shelter.

surviving

pubwvj makes the same points brought out by the academics: There are various ways to survive in rural areas not available to people in cities. Also, the comments about school budgets gets to the heart of the matter. Rural areas, according to Fisher and Nord, pay to educate their kids and then export that investment to the cities. Meanwhile, they are asked to absorb those with less education from the cities. They lose two ways. Seems to me that states need to acknowledge this trade. I guess that is done implicitly when states are required to "equalize" their school funding, but maybe these costs ought to be made part of the formula. It might make pubwvj more willing to vote for the school budget!! thanks, pubwvj!! bill bishop yonder

A few more twists to this theme

This is such a multi-faceted issue, and here are perhaps other aspects based on observations about southern rural areas. First observation---In the rural south, outward migration for opportunity is a phenomenon that has been around for a long time. Less advantaged and less favored segments of the rural population moved to urban areas, generally speaking more to the northern urban areas for blacks and southern ones for whites, in large numbers during much of the 20th century. Now many of these folks from the peak out migration in the 1950's and 1960's are retiring and looking for the best lifestyle that they can afford on their social security, savings, and in some cases union pensions. I ride the Southern Crescent train at times and have had those dining car discussions with many like "I'm moving back home. It's a lot less expensive there, I've got family there, and up here it just doesn't feel as safe anymore. A big city is no place to be old". So that could suggest that some inward migration, at least in the South, is not exactly poor but for the most part not wealthy either. They are attracted by the hugely lower housing costs back home. They are a group that is past their most productive years and is more likely to be in need of some social services. Second observation---This phenomenon is likely not just confined to the formerly less advantaged. Other natives retiring from urban areas may be a part of this trend as well, but to a lesser extent. They could also bring some wealth to the economy(that's good), but not in most cases be a source of added productivity. Third observation---As detailed in many articles on the Daily Yonder there is consolidation in farming that is ongoing. Small farmers are under pressure and aggregators are buying them out. Where do they go? In many cases, with their modest buy out money in hand, they may move from the farm to the nearest rural town where home prices are depressed, some city type amenities are available, stores and services are nearby, relatively low paying service jobs are around and they're still in the county or area that they consider their home. This keeps the struggling town's population intact, fills available homes, but in general does not provide new skill sets that fit a profile that would attract new employers to an area. The unifying theme of these observations is that there is also, in cases like these, inward migration that, while not necessarily "poor", is moving to the rural area or town for affordability and lifestyle reasons. They may be, in many cases, constructive new citizens but it is unlikely that they can drive a resurgence in the community, be a significant boost to the tax base, be a demographic attraction for new sources of jobs, and one could make a pretty good guess that they won't improve the birth rate.