Recession Strikes Cities Harder Than Rural Communities — So Far
[imgbelt img=JobsUrbanRural2008.jpg] In the first 11 months of this recession, the most dramatic decreases
in employment have taken place in urban counties. Rural counties,
however, still have higher rates of unemployment.
There were 1.26 million fewer people working in the United States in November of 2008 than in December of ’07. Nearly 99 percent of those job losses were in urban and exurban counties.
The total number of employed workers in rural counties fell by only 14,868 during this time. That accounts for only about one percent of the nation’s total decline in employment. Nearly 16% of the nation’s jobs can be found in rural counties.
Unemployment increased by 2.67 million people over this 11 month period. Just under 2.1 million of that increase in unemployed workers lived in urban areas. There was an increase of 364,000 unemployed workers in rural counties during this time, or 13.6% of the new unemployed.
Unemployment is still slightly higher in rural counties than in urban America. Rural unemployment in November stood at 6.8%. Urban unemployment was 6.4%.
Employment figures varied from region to region and state to state. Job growth was particularly strong in the rural Great Plains. Iowa, Minnesota, Nebraska, North Dakota, South Dakota, Wisconsin, Kansas, Oklahoma and Texas all showed strong employment gains during the first 11 months of the recession.
Both the West and the Northeast showed employment gains in rural counties. The job losses were slight (6,000) in the Midwest. The South accounted for nearly the entire drop in rural employment.
Of the 48 states with rural counties, 25 lost jobs in rural areas during this time. Rural North Carolina, Alabama and Illinois had the largest drops in employment. Thirty-four states lost jobs in urban counties, led by California, Florida, Illinois and Michigan.
Oklahoma, Texas and Wisconsin showed the biggest gains in rural employment — a testament to strength of the farm and energy economies during most of 2008.
Rural economies were bolstered in 2008 by high prices for grains, rising land prices, strong equipment sales, new exploration for oil and gas and large investments in renewable energy, such as wind turbines and ethanol. Rural areas were also less affected by the decline in housing prices.
Those advantages for rural America may have come to an end, however. In the latest Rural Mainstreet Economy index, economist Ernie Goss at Creighton University, in Omaha, Nebraska, reports a significant weakening in the rural portions of 11 Plains states in the last few months of 2008.
The 11 states are Colorado, Illinois, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota and Wyoming. These are the states that had shown the most employment stability through November. The average size of the community in this survey is 1,300 people.
The Mainstreet index tracks nine measures of rural economic health and conducts interviews with local bankers. Every measure used in the survey is lower than it had been in January of 2008, and the Creighton economist found that those declines were steepening in some areas. For example, commodity prices have continued to slump. Prices for agricultural products have now declined for three straight months.
Job losses are now being reported across the region, according to the report. An index of new hires dropped to record lows in January of this year, according to Goss.
The good news is that housing prices in rural communities have not suffered as they have in the cities. Bank deposits remain high and rural banks continue to issue loans.
The decline in energy and agriculture is already affecting portions of rural America. The Associated Press reports this week that a decline in oil drilling is already being felt in West Texas.
How bad is the current recession? Not quite as harsh as the 1982 downturn, according to a report in the New York Times. Unemployment during that recession ratcheted above 10% in 1982. Last month, unemployment in the U.S. was 7.2 percent, up from 6.5% in November.