Wednesday, November 26, 2014

Recession in Rural America by the Numbers

09/13/2009

Economic Research Service The Green areas gained employment from the second quarter of 2008 to the second quarter of this year. The red counties lost between 3.5% and 17.5% of their jobs in that year. Click on map for a better look.

Once a year the folks at the Economic Research Service publish a report on rural America. It’s called Rural America at a Glance and this year’s edition focuses on the recession.

No surprise there. Friday we learned that the recession has “plunged 2.6 million more Americans into poverty, wiped out the household income gains of an entire decade and pushed the number of people without health insurance up to 46.3 million,” according to the Washington Post. 

These latest Census Bureau figures don’t tell us whether the recession is better or worse in rural America. That’s what the ERS tries to do. Here are some excerpts from the full report:

RECESSION AND EMPLOYMENT

In late 2008 and early 2009, the recession deepened, with national gross domestic product falling at an annual rate of 6.2 percent. Commodity prices also fell. Nonmetro unemployment rose from 5.2 percent in mid-2008 to 9.2 percent in mid-2009, while metro unemployment rose from 5.3 percent to 9.1 percent over the same period. Both metro and nonmetro areas suffered from the contraction of manufacturing, retail, and other sectors. The overall pace of employment decline, however, was greater in metro areas (-3.8 percent) than in nonmetro areas (-3.0 percent).

Economic Research Service Chart shows the change in employment in metro counties (in red) and nonmetro counties (in blue).

In nonmetro areas, large employment declines were widespread between second quarter 2008 and second quarter 2009, with manufacturing (-9.8 percent) and construction (-13.3 percent) losing the largest absolute number of jobs, followed by transportation and utilities (-11.8 percent), wholesale and retail trade (-2.7 percent), financial activities (-8.2 percent), and professional and business services (-5.2 percent).

A long-running decline in many nondurable manufacturing industries such as apparel, textiles, paper products, and printing—together with the more abrupt decline of many durable manufacturing industries in the autumn of 2008 after 4 years of relative stability—resulted in the loss of more than 300,000 nonmetro manufacturing jobs in a single year.

In the Northwest, rising unemployment in the timber industry, closely tied to the housing market, has affected parts of Oregon, Washington, and California. A few counties have shown declines or no change in their unemployment rates, including counties that have benefited from an increase in oil and gas drilling; most of these have relatively small total employment levels.

Men are more likely than women to work in industries sensitive to business cycles. The nonmetro unemployment rate for men increased by 5.3 percentage points (from 5.4 percent to 10.7 percent) and for women by 2.7 percentage points (from 4.9 to 7.6 percent) between the second quarters of 2008 and 2009. Nonmetro minorities and teenagers had the highest rates of unemployment in the second quarter of 2009.   Economic Research Service Almost all of the U.S. saw increases in unemployment rates from the second quarter of 2008 to the second quarter of 2009. The darker the red, the greater the rise in unemployment.

RURAL HIGH-COST LOANS 

Declining housing prices, combined with a sharp rise in high-cost loans, were important factors in the recent mortgage and foreclosure crisis that has affected metro and nonmetro housing markets alike. The most recent data show that nonmetro residents were slightly more likely than metro residents to have obtained high-cost loans just prior to the recession.

POVERTY RISING

Despite 6 consecutive years of economic growth, the national poverty rate for all persons was higher in 2007 than during the 2001 recession. This marks the first time on record that poverty has increased during a relatively long economic expansion. That increase was greatest in nonmetro areas and for children below 18 years of age, for whom poverty has been the most persistent. 

The national poverty rate (with poverty defined in 2007 as an annual income of less than $21,027 for a household with two adults and two children) was 12.5 percent in 2007 compared with 11.7 percent in 2001. The increase was greater for nonmetro areas (from 14.2 percent to 15.4 percent) than for metro areas (from 11.1 percent to 11.9 percent). 

POOR CHILDREN

Though child poverty was widespread in 2007, it was more pervasive in nonmetro than in metro counties, particularly in areas with concentrations of racial and ethnic minorities. The nonmetro child poverty rate was 22.5 percent, higher than the metro rate of 17.2 percent. 

In 2007, 58.9 percent of all nonmetro counties had child poverty rates of 20 percent or more compared with 46.0 percent in 2001. The share of metro counties with high child poverty rates also grew, from 22.4 percent in 2001 to 33.7 percent in 2007. 

The highest child poverty rates were found in counties in the Mississippi Delta, counties containing Native American reservations, and counties along the U.S. border with Mexico.  Economic Research Service The counties in red have child poverty rates over 20%.

HOME OWNERSHIP

 After more than a decade of steady growth, the rate of homeownership across the Nation peaked in 2004 at 69 percent. Nonmetro area homeownership reached a high of 76.3 percent in 2004, declining to 75.2 percent in 2008.

POPULATION SHIFTS

Except for a brief period of increased migration to nonmetro areas in mid-decade, metro areas have grown at twice the rate of nonmetro areas since 2000. From 2006 to 2008, nonmetro counties grew by 0.4 percent per year compared with 1 percent for metro counties. 

Metro counties received a disproportionate share of international immigrants and had higher rates of natural increase.  At the same time, the demographics of nonmetro population growth shifted substantially as population growth from domestic net migration dropped sharply between 2004-06 and 2006-08, offset by a rise in natural increase.

During 2004-06, a total of 104,000 more people moved from metro to nonmetro areas than moved in the opposite direction, a substantial increase in net migration over previous years. The upward trend was not surprising given the aging of baby boomers into stages of life in which migration to nonmetro increases. 

The subsequent slowing of net migration into nonmetro areas after July 2006—to 34,000 migrants—likely occurred among all age groups because it corresponds with the mortgage foreclosure crisis that began in late 2006 and the onset of the current economic recession in late 2007. Net migration rates dropped most sharply in counties with the highest foreclosure rates.