The largest drops in personal income in rural counties between 2005 and '06 were clustered in farming counties in the Great Plains; the declines appear to have been caused, in part, by lower federal crop payments.

 

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Rural Personal Income Falls Behind the Cities

thumbnail map of income changeThe largest drops in personal income in rural counties between 2005 and '06 were clustered in farming counties in the Great Plains; the declines appear to have been caused, in part, by lower federal crop payments.

 

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Farming counties from the Dakotas down the middle of the country to Texas showed the sharpest drop in personal income between 2005 and 2006, according to recently-released data prepared by the Bureau of Economic Analysis.

The BEA reported that personal income declined in 2006 in 227 counties. In all but five of these counties, farming accounted for the entire decline in income. And, 194 of the 227 counties with declining incomes (85 percent) were rural.

(In the BEA's calculation, personal income is a comprehensive measure of the income of all persons from all sources. It includes wages, salaries, employer-provided health insurance, dividends and interest income, social security benefits, and other types of income, including farm subsidy or disaster payments. Also, in this study, "rural" counties are defined as those that are "non metro" counties according to the U.S. Census.)

In metro areas, the average personal income was $38,564, compared to $27,403 in nonmetro areas. For the third straight year, nonmetro income fell as a percent of metro personal income. In 2006, nonmetro personal income was just 74.6 percent of the U.S. average. This is down from 75.1 percent in 2005; 75.8 percent in 2004, and 76.1 percent in 2003.

The five counties with the largest declines in personal income were Campbell, Zieback and Hyde counties in South Dakota; Slope County, North Dakota; and Lynn County, in Texas. All are sparsely populated counties of the Great Plains.

To see the fifty rural (non-metro) counties with the largest percentage declines in income between 2005 and 2006, click here.

To see the fifty rural counties with the largest percentage increases in income, click here.

To see the fifty rural counties with the lowest personal incomes in 2006, click here.

To see the fifty rural counties with the highest personal incomes in 2006, click here.

This map divides all U.S. counties into five groups according to the change in average personal income between 2005 and 2006. The dark blue counties had the greatest income increases; the dark yellow had the largest declines.

The counties with the fastest-growing incomes in 2006 were led by Louisiana Gulf Coast communities recovering from Hurricane Katrina. Washington, Vermillion and Jefferson Davis parishes in Louisiana were among the five rural counties with the fastest-growing incomes in 2006, the other two being Willacy County, Texas, and Allendale County, South Carolina.

Most rural counties were well below national averages both in absolute personal income and in increases from '05 to '06. Nationally, the average personal income increased 6.7 percent from '05 to 2006. Only 362 out of 2029 rural counties (18 percent) reported income increases equal to or higher than this national average.

The national average for personal income in 2006 was $36,714. Only 68 rural counties out of 2029 (3.4 percent) showed average incomes above the national average.

This chart shows U.S. incomes divided into four groups, highest to lowest, and shows the proportion of metro and non-metro counties in each grouping; in the poorest fourth, 87% were rural counties, and 13% metro.

The rural counties with the highest incomes were led by resort communities. Teton County, Wyoming, was the top-ranking rural county, with average personal income of $103,852. Teton was followed by the ski resort communities of Pitkin County, Colorado, and Blaine County, Idaho; Loving County, Texas, a community of fewer than 100 people; and Los Alamos, New Mexico, home of some of the country's most intense nuclear research.

Large declines in income between 2005 and 2006 were concentrated in the Plains counties, largely, it appears, because of declines in farm subsidy and disaster payments. Federal farm payments to South Dakota, for example, peaked in 2005, according to a South Dakota State University report by Larry Janssen and Yonas Homda. Disaster payments in '05 were considerably larger in a number of these Plains counties in 2006.

Still, there are hundreds of individual stories causing both rising and falling incomes in rural counties. For example, incomes fell in Ziebach County, South Dakota, in part because Si Tanka University in nearby Eagle Butte closed and the institution's employees lost their jobs.

If readers have stories about economic changes in their counties, please add comments to this story or contact the Yonder at: [email protected]

 

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