Why Plains States Did Better with Jobs

Throughout the recession and its aftermath, unemployment rates in rural Plains States counties have been lower than other rural areas. The Economic Research Service attributes the regional variation to the predominance of agriculture (which didn’t slump the way industries like manufacturing did) and higher education levels. But there’s a darker side to the lower unemployment numbers: population loss.

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The slow rate of jobs recovery is one of the biggest stories in rural America over the past six years.

Metro America is nearly back to pre-recession levels of employment. But job growth in nonmetro, or rural counties remains flat-lined more or less since 2010.

As with most things rural, there are tremendous regional variations. A report from USDA’s Economic Research Service looks at some peculiar job trends in rural areas and asks why.

A key trend we observed throughout the recession, and which holds true through today, is that Plains States counties fared better than other rural counties in their unemployment rates.

So why the regional variations? Authors Tom Hertz, Lorin Kusmin, Alex Marre and Tim Parker look for answer.

In the map above, the green swath through the nation’s midsection shows that unemployment has been lower in this region than the nation overall.

ERS analysis shows that several factors combined to create lower unemployment rates in the Plains States.

  • First, the Plains counties tended to be more ag-dependent. That economic sector fared relatively well compared to the rest of the economy during the recession, and that softened the economic impact there. “The Plains States’ favorable mix of industries at the start of the recession served to moderate the recession-induced increase in unemployment,” the report said. “In particular, Plains counties were far more likely to have farming-dependent economies, … and this reduced unemployment rates …”
  • Second, these counties were less likely to have manufacturing jobs, which were some of the hardest hit during the recession. Compare the Plains to industrial states like Michigan, which suffered from the decline in the auto industry. The chart below breaks out performance by industry for the past six years. Note how the green line (farming) rises slightly. Purple (mining and logging) climbs steeply; that could be a factor in northern Great Plains employment, where oil and gas production has been increasing.

  • Third, Plains States tended to have a higher percentage of college graduates, and that also correlated with lower unemployment rates in the ERS study. “This college-educated share was higher in the average county in the Plains States (52 percent, including both those with some college education and 4-year-college graduates) than in non-Plains counties (46 percent),” the report said. “During the recession, their higher levels of education served to limit the increase in unemployment in Plains counties.”
  • And finally, there’s a more ominous reason for the relatively strong unemployment performance of Plains States. Those states also tended to be losing population. That means fewer people looking for work and, in turn, fewer people who are unemployed.

So … what’s unemployment like in your part of rural America (check out the latest county-level data in Bill Bishop's story here), and what explains the regional variation, in your view?

 

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