(January 2003) Rural America continues to shed its stereotypes: It is no longer a bucolic hinterland inhabited just by farmers, nor is it necessarily economically distressed, though rural poverty remains an entrenched part of the landscape in some areas. Many rural locales are diversifying their economies by attracting unusual new industries and offering amenities that draw in new residents including urbanites eager to escape the stresses of city living.

Do these developments represent a temporary turnaround? Calvin Beale doesn't think so. "The rebound is real," he said. "The number of declining nonmetro counties was cut in half during the 1990s, from over 1,200 to about 600." Beale, senior demographer with the Economic Research Service of the U.S. Department of Agriculture (USDA), began studying rural areas in 1953. He has witnessed their vast transformation during his career.

Then and Now

In 1953, there were 54 million rural people in the United States, 36 percent of the U.S. total. At that time, "rural" areas were open country and towns of under 2,500 people outside of urbanized areas. Twenty-three million of that 54 million (43 percent) lived on farms. The 1950 census was the first in which a majority of the rural population was not on farms, and Beale recounts that there was puzzlement at the USDA about the growing rural nonfarm population. "Many people could not visualize that group," said Beale. "I would get calls asking 'Well, what do they do?'"

Today, thanks to the mechanization of agriculture, years of out-migration by young people, and reduced fertility among those left behind, just 3 million people 1 percent of the U.S. population live on farms. The rural population, however, has risen to 59 million, 21 percent of the U.S. total, despite a different procedure for defining rural territory. (The Census Bureau now defines rural as open country and small town areas that lie outside of "urban clusters" of 2,500 or more people, as measured by population density a procedure that has reclassified a significant number of former rural people as urban, especially in the densely-settled Northeast. The Office of Management and Budget defines metro areas: They require an urbanized core of at least 50,000 people and are generalized out to county lines, with fringe counties included that meet certain criteria of workers commuting into the core. Nonmetro territory is the rest of the country.) Forty-four percent of rural people live inside metro areas, and 56 percent of all nonmetro residents are in counties adjacent to metro areas. Thus, large numbers of rural and small town people are either close or decently accessible to urbanized area jobs and services.

The answer to the "What do they do?" question applied to today's rural residents varies by location. Many commute like their urban counterparts to job centers. Several million others have long found work in local manufacturing or, more recently, in industries made feasible by modern communications such as telemarketing, reservation centers, or catalog sales or that capitalize on recreation or the lower costs found in small towns. The latter category includes some unusual "growth" industries:

  • Casinos. Since 1987, when federal Indian gaming rules were passed, casinos have been cropping up in many rural areas. Others are state controlled. There are now casinos in 140 nonmetro counties in 23 states (primarily in the West and northern Midwest), each providing jobs for anywhere from a few dozen to over 1,000 employees. Casinos are part of a larger trend, the development of recreational and resort facilities ranging from destination resorts, to outdoor activities, to second homes. "So much of rural America, it seems to me, has become the playground of urbanites," said Beale.
  • Prisons. In the 1990s, 245 prisons opened in nonmetro counties. Over half of all new prisons opened in nonmetro settings. Their location in these areas is very disproportionate to the nonmetropolitan share of total U.S. population, but it has occurred because the land is cheaper. According to Beale, there are many rural areas so desperate for jobs on average, prisons employ 300 people that they not only accept the prisons but even offer incentives such as providing new water and sewer lines and access roads. Being chosen as a prison location has become a form of competitive economic development in many states. Inmates, who number 1,000 per prison on average, are counted in the population, and counties derive benefits from this in terms of per capita distribution of funds by the states.

Demographic Revival

In terms of demographic (not just economic) renewal, one trend that predominated earlier — migration from rural to urban areas — has moderated, making population change in metro and nonmetro areas more similar for the last decade than for the previous one (see Table 1). Fertility in rural areas has continued to decline but has begun to converge with that in urban areas, which has risen slightly (see Table 2).

Table 1
U.S. Urban and Rural Population Change by Decade

Decade Metro Nonmetro
1990–2000 13.9 10.2

*Sources: U.S. Census Bureau, Decennial Census, various years.

Table 2
U.S. Fertility in Urban and Rural Areas, 1950 and 1990

Year Urban Rural
1990 1.9 2.1

* Number of children ever born per 1,000 women ages 35 to 44.

Migrants (not counting prisoners) to rural areas include retirees; Hispanics who have dispersed from the five Southwestern states into the Midwest and beyond; and individuals and families who have become disenchanted with the pace, crowding, traffic, pollution, and crime associated with urban living and believe that nonmetro areas provide greater security.

Retirement-destination counties constitute the most rapidly growing type of nonmetro area, with a 28 percent increase in the 1990s. Most older people do not move when they reach retirement. But of those who do, many choose smaller communities with a slower pace. Retirement destinations are widely scattered and have long since ceased to be exclusively Florida and the Southwest.

Hispanic migration is growing in importance. Although Hispanics accounted for just 4 percent of the nonmetro population in 1990, they account for 25 percent of the growth in the nonmetro areas. Much of the increase in their numbers in these areas is from immigration, but they also have larger families and a higher proportion of adults of childbearing age. They have a much higher ratio of births than the other racial and ethnic groups (see figure).

Figure 1
Births per 10 Deaths by Racial
and Ethnic Group, 2000

Source: National Center for Health Statistics, National Vital Statistics Reports 50, nos.< 5 and 15 (www.cdc.gov/nchs/ products/pubs/pubd/nvsr/ nvsr.htm, accessed Jan. 9, 2003).

The difference between urban and rural fertility has not changed substantially since 1990, the end date shown in Table 2. (The census no longer asks respondents how many children they have ever had, but the Current Population Survey collects that information and shows, according to Beale, that the difference has remained stable.) This despite rural Hispanics' fertility and despite the high fertility among religious minorities that prefer to live in rural America such as the Amish, the Old Order Mennonites, the Hutterites in the Great Plains, and polygamous groups in the West. On average, there is only a somewhat higher level of childbearing in rural small town areas than in urban, and the annual rate of natural increase is much higher in urban or metro areas than in rural.

Persistent Poverty

There are exceptions to the rule of rural renewal. Poverty hangs on in 444 nonmetro counties at levels higher than 20 percent. That means, said Beale, that a fifth or more of the population lives in economic distress. These areas (see Figure 2) perpetuate ethnocultural and geographic stereotypes because poverty in each is concentrated in a particular ethnic or racial group, and outsiders view the areas themselves as lacking in natural resources and other amenities.

Figure 2
Nonmetro Counties With Over 20 Percent Poverty, 2000 Census

High poverty is 20 percent or higher.
Source: Map prepared by Economic Research Service using U.S. Census Bureau data (2000).

There are 210 counties in which a majority of the poor are black or where high poverty in the black population pulls the poverty rate up to more than 20 percent. These counties are in the old plantation South, from southern Maryland into east Texas.

Seventy-four counties are areas of high Hispanic poverty, mostly in the Southwest, especially in Texas and New Mexico. But, a scattering of counties with high poverty stemming from conditions among Hispanics now appear elsewhere such as in Georgia, Missouri, Oklahoma, and Washington areas where the dispersal of Hispanics of Mexican origin has not yet resulted in adequate income levels for them.

Areas with high poverty rates among American Indians are largely in parts of South Dakota, North Dakota, and Montana where the American Indian proportion of the total population is rising. These northern reservations have some white populations settled, Beale said, on land taken back from the Indians and opened for homesteading but the white farmers and ranchers' numbers are diminishing. And the Indian population has a large surplus of births over deaths.

There are 92 counties of high poverty remaining in the southern highlands of Kentucky, West Virginia, Virginia, and Tennessee and spread through the Ozarks and the Ouachita Mountains in Oklahoma. There the poverty is non-Hispanic white poverty.

The factors associated with poverty differ from group to group. Education and disability contribute to poverty in the southern highlands, where the ratio of high school dropouts to college graduates is 3.5 to 1 the highest for any county groups. In nonmetro America as a whole, there are only 30 percent more high school dropouts than college graduates. In metropolitan America, there are more college graduates than there are people who never finished high school. Also, in Appalachia and the Ozarks, people have consistently higher self-reported rates of disability. Thirty-one percent of the population in these areas reported in the 2000 census that they have some disability compared with 19 percent nationally.

The black poverty areas, though, are highest in the percentage of children in female-headed families with no husband present: 33 percent. No other group is as high as 25 percent.

American Indians and Alaskan natives have the highest ratio of total population to employed people. There are more people dependent, in the sense of earned income per each employed person.

And in areas where poverty is found mainly among Hispanics, the 2000 Census shows that 20 percent of people reported that they did not speak English well. The average nonmetro percentage is 3 percent. The American Indian areas have 11 percent.

Urbanites Move to Small Towns, Economic Prospects Improve

Beale cites residential preference surveys taken over the last 20 years showing that there is a reservoir of urbanites who say they would prefer to live in a rural, small town environment. One survey taken in the late 1970s indicated that there were 20 million more big city/suburban people who said they would like to live in rural areas than there were rural/small town people who said they would like to live in a big city area.

In times of average prosperity, Beale believes we are likely to see somewhat more people who are dissatisfied with large-scale urban life move to rural and small town areas than people going from nonmetro counties into the cities. After all, with the nonmetro population down to just a fifth of the total, the nonmetro percentage rate of out-migration would have to be four times as high as the rate of out-migration from metro areas to offset the metro areas' out-migration.

There will, Beale predicts, always be rural/small town young people who leave home in search of urban experience, a career, or even a mate. "But," he says, "metro areas increasingly are spinning off people who have had enough of large-scale urban life and who seek a small-scale environment during their parental years or empty-nest years or in retirement."

As for rural counties with concentrated poverty, their prospects hinge on more and better-paid jobs or developing amenities to attract outsiders with resources. Counties containing Hilton Head, S.C., and St. Simons, Ga., were terribly poor areas that are now thriving as resort and recreation spots. And Archuleta County, Co., has been transformed into a prosperous destination for skiers.

For high-poverty areas that do not offer natural or manmade attractions or proximity to urban centers, the prospects are not as bright. Many causes of nonmetro poverty are no different from those in urban places, whether they relate to economic restructuring and loss of older industries, inadequate skill levels, lingering discrimination, or the low income of one-parent families. But the rural context diminishes the variety and wages of jobs available to the work force, reduces the rewards to education, and handicaps people without transportation. It would not be surprising for the overall nonmetro poverty rate to continue to be somewhat higher than that in metro areas. But much progress has been made and the incidence of rural/small town poverty is now much less than it used to be.

Allison Tarmann is an editor at PRB.