Rural Regions Facing Difficult Demographic Challenges

Rural regions across the United States have been facing troubling demographic trends impacting the economic performance and quality of life of these areas relevant to corporate site location decisions.  

Reviewing demographic data is a strong starting point for measuring economic success as part of a corporate site location process.  Regions with an increasing population base and a group of younger workers illustrate growing communities.  Homeownership rates and home value illustrate stability in a community but also whether it is affordable to buy a home in a community.  The percentage of citizens over 25 with a college degree illustrates the likelihood the region can attract high-wage financial services, insurance, health care, high-tech, professional service and other advanced services white collar jobs.  Finally, measures of income and poverty rates illustrate the overall economic strength of the community.  

Population growth is a critical factor for the economic vitality of a region and state.  Growing regions add population and provide a larger workforce pool that is attractive to employers seeking job creation and making capital investments.  Regions that enjoy population growth in tandem with increases in their economic output address the challenges of income inequality.  Increasing a region’s population also raises the standard of living in a region.  The population loss facing Rural America is a major problem.  All regions are facing skilled workforce challenges—even growing areas with tremendous population growth.  Communities that are not growing in population and who, in particular, are losing their young people to emerging mid-sized urban markets are in economic trouble.  

Ohio offers a startling example of the population loss of rural communities.  The population loss in non-urban regions of Ohio is startling.  As the table below illustrates, the population loss of the 68 rural Ohio counties totaled nearly 40,000 people from 2010-16.  While rural Ohio loses population, we know where their young people are going- Columbus.  During this same timeframe Columbus has been gaining 10,000 people a year and the state of Ohio has barely grown in population at all. 

With population loss comes the decline in incomes.  As the table below illustrates, smaller urban and rural regions in the state of Ohio have a substantially lower per capita income driven in large part by the loss of manufacturing and agricultural jobs as automation makes those sectors of the economy much more productive but much less job rich.  Rural communities, in particular in the southeastern part of Ohio, are clearly struggling from an economic standpoint.  The graphic below compares the poverty rates by counties across the state and illustrates the economic challenges facing rural Ohio in particular. 

Source: The Ohio Poverty Report, 2018, Ohio Development Services Agency

Ohio is not alone.  Even the state of Texas, the fastest growing state in the union, has seen a dramatic population shift from rural communities to urban.  100 years ago, the urban counties in Texas had 27% of the state’s population but today the numbers have been turned on their head—rural counties in Texas now have only 27% of the state’s population. Rural communities are struggling to hold on to their young workers no matter whether the state is booming or not.