The Thriving 5’s And Rural America – An Uneven Recovery

By most measures, the U.S. economy has come a long way since the depths of the recession in 2010 – GDP is way up, unemployment is way down. But at the local level the story is much more uneven with some communities seeing big improvements while others see much less change. And those different stories are the most evident along America’s rural/urban divide.

Urban counties, particularly those along the East and West coasts and along “the 5’s” (the big interstate highways running north and south), as Chuck Todd Noted on the Meet the Press Sunday, have not only seen a drop in unemployment, they have seen growth in their labor force numbers, those actually looking for work. In rural counties unemployment rates are down, but that has a lot to do with fewer people in the job market.

It’s an example of how national economic figures and trends don’t match necessarily individual economic realities and how Americans who live a short distance from one another can live in very different economic worlds.

There is a political element to this split as well. Big, urban areas largely vote Democratic. Rural communities tend to lean Republican. Voters in those different communities are not just perceiving different economies, they are experiencing them.

To get a sense of the different unemployment pictures, we used Bureau of Labor Statistics county unemployment data from July of 2010 and compared them to July of 2014 (the latest month available), breaking down the data using the community types from the American Communities Project at the American University School of Public Affairs. The divides were stark.

All of the 15 county types in the ACP has seen a decline in their unemployment rate in that time, but some of those types – most of them rural – had also seen sizable declines in their labor force. At the same time urban, suburban and exurban counties had mostly seen big increases in their labor forces to go along with the big declines in their unemployment rates.

 

Why does that matter? Because the unemployment rate is figured off the number of people actively looking for work.

The Big Cities, Urban Suburbs and Exurbs counties, based along the coasts in and major metro areas around the country, have not only seen big declines in their unemployment rates. They have also seen big increases in their workforces.

Their unemployment rates are, in some ways, better than they appear when you compare them to 2010. People are joining the labor force in those counties and even with those people putting pressure on the job market, the unemployment rate is falling.

Meanwhile, in places like Rural Middle America, the African American South and Working Class Country, the unemployment rate is falling but so is the number of people in the workforce.

This group of people leaving the job market is often described as “discouraged workers” and if you add those workforce declines to the unemployed the unemployment rate would look very different. In some places the unemployment rate would be relatively unchanged or even higher. In other words, the economic situation in those places is not nearly as rosy at it appears.

You can see where all these counties are based on the map below. Big Cities, Urban Suburbs and Exurbs are pink, dark orange and yellow. Rural Middle America, the African American South and Working Class Country are royal blue, light green and dark blue. Mouseover to the map to see each county’s designated type.

 

The numbers are important to understand because the economic discussion often centers on national figures. National numbers that show unemployment is down and workforce participation is up aren’t wrong, but they miss a lot of subtleties you see in the chart above, and those difference exist even within states.

Consider Pennsylvania. Philadelphia, part of east coast metroplex along I-95, has seen a 4.3-point drop in its unemployment rate, even as the workforce has grown by almost 14,000 people. That means job growth there has been substantial enough to put a lot of people back to work even as the employee pool has grown.

On the other side of the state in Fayette County, the unemployment rate has dropped by 3.5 points, but there are also 4,100 fewer people looking for work than there were in July 2010 – and about 1,500 fewer people employed in the county overall. That unemployment drop looks a lot less impressive when you remove those people from the workforce.

On the West coast, King County, home of Seattle along I-5, has seen its unemployment rate drop by 3.6 percentage points since 2010, even as the county’s workforce has added 50,000 people. East of there, sparsely populated Lincoln County has seen a 2.6-point drop in unemployment, but in part that’s because its workforce has declined by about 600 people – there were 400 fewer people employed in county in July 2014 than there were in July 2010.

This phenomenon is not confined the coasts and the interior counties there. Look at the big metro centers across the country along the big Interstate highways and you’ll see the same thing. Growth around and around big cities from the Twin Cities to Nashville to Dallas and sparse change further away from them.

Of course, the employment picture doesn’t measure everything. There are issues like pay and cost of living and consumer debt, but as a broad economic measure it’s telling.

And the urban/rural split on the recovery is something to keep in mind going into November and beyond. It shows how complicated any discussion of “the economy” can be in a big, complicated country.

 

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