Rural Labor and Education: Nonmetro Employment and Unemployment

Rural Labor and Education Briefing Room Nonmetro Employment and Unemployment Nonmetro Earnings and Low-Wage Workers Farm Labor Nonmetro Education

The 22 million U.S. workers who lived in nonmetro America in 2006 represented 15 percent of the Nation’s employment. An additional 1.1 million nonmetro Americans were in the labor force but unemployed. Nonmetro employment has grown at about 1.3 percent a year since late 2003. Over the same period, metro employment has grown at 1.9 percent per year. The fastest nonmetro employment growth since 2000 has occurred in the West and in counties with concentrations of service industry, government or mining employment. Unemployment rates in both metro and nonmetro areas fell by a total of about one-and-a-half percentage points between mid-2003 and early 2007.

The following information is available in this chapter:

• A profile of the current employment and unemployment picture in nonmetro America, with comparisons to metro America, including some information on the occupational composition of employment.
• A description of trends in nonmetro employment growth, including regional trends and comparisons with metro employment growth
• A description of trends in nonmetro employment rates, including trends by region and county type, and comparisons with metro unemployment rates

Profile of Nonmetro Employment, 2006

Today, nonmetro America accounts for about 15 percent of the employment in the United States, or over 22 million workers, according to data from the Current Population Survey (CPS). The proportion of the working age population (ages 25-64) employed was 73.5 percent in nonmetro areas in 2006, compared with 76.7 percent in metro areas.

Annual unemployment stood at 4.9 percent (1.1 million persons) in nonmetro areas in 2006, compared with 4.6 percent in metro areas. Official unemployment rates may understate the full extent of employment difficulties because they include only persons without a job who have actively sought work within the past month. Adjusting the official rate to include persons who want to work but are not currently looking for employment and one-half of those who are employed part-time but would like full-time work reduces the potential understatement. This adjusted unemployment rate in nonmetro areas was 8.8 percent in 2006, compared with 8.1 percent in metro areas.

Jobs with higher educational requirements are more concentrated in metro areas. The share of nonmetro workers in higher paying professional and managerial occupations in nonmetro areas is 7.3 percentage points less than in metro areas. At the same time, the share of workers in lower paying blue-collar occupations is higher in nonmetro areas.

See employment and unemployment tables from the Current Population Survey.

Back to top

Trends in Nonmetro Employment Growth

The economic expansion of the 1990s was accompanied by substantial growth in rural employment. In the summer of 2000, U.S. manufacturing went into a downturn. Afterward, in March 2001, the Nation's longest economic expansion on record ended as the economy slipped into recession. Although the National Bureau of Economic Research identifies November 2001 as the end of the recession, the national labor market remained soft well into 2003, with slow employment growth and continued increases in the unemployment rate.

Recent data on employment change show continuing employment growth in nonmetro areas since late 2003, based on the 2003 OMB classification of metropolitan status. Nonmetro employment has grown at an average annual rate of 1.3 percent since the fourth quarter of 2003, with an annualized growth rate of 1.5 percent over the last five quarters. Metro employment has grown at an average annual rate of 1.9 percent since the fourth quarter of 2003 and at about the same rate over the last five quarters. This pattern of faster growth in metro areas mirrors trends in the late 1990s.

d

Nonmetro employment growth since the early 1990s has generally been fastest in the West. This held true both during the expansion of the 1990s and during the cycle of slowing growth, recession, recovery, and expansion since 2000. Nonmetro employment growth was moderate in both the South and Midwest during the 1990s but slowed in both of these regions, and particularly in the Midwest, since 2000. Nonmetro employment growth in the Northeast has also slowed somewhat since the 1990s.

During the 1990s, nonmetro employment grew most rapidly in services, government, and nonspecialized counties. Between 2001 and 2007, employment continued to grow substantially in services and government counties but the rate of growth fell markedly in nonspecialized counties. Resource-dependent counties—those dependent on farming and mining—experienced relatively slow employment growth during the 1990s. Employment growth in farming counties slowed even more after 2001, while that in mining counties has been faster. In contrast, nonmetro employment has been nearly static in manufacturing counties during the past 6 years, after rising at moderate rates during 1991-2000.

Back to top

Trends in Nonmetro Unemployment

Both nonmetro and metro unemployment rates show evidence of the recovery in job markets over the past few years but remain well above their pre-recession lows. Nonmetro unemployment fell to its lowest level in decades in the fourth quarter of 1999, before beginning to rise in 2000. Nonmetro unemployment reached a recent high in the third quarter of 2003, 2 years after the recession had ended, that was 2 percentage points above the 1999 low. Between late 2003 and the second quarter of 2007, nonmetro unemployment fell by nearly one-and-a-half percentage points.

Metro unemployment fell to its lowest level in 2000. It then rose from 3.9 percent in the fourth quarter of 2000 to 6.2 percent in the second quarter of 2003. Since then, however, the metro unemployment rate has dropped steadily, falling to just 4.5 percent by the second quarter of 2007.

During the 1990s, nonmetro unemployment rates were generally highest in the West and lowest in the Midwest. During 2000-03, however, unemployment rates rose sharply in the South, and the nonmetro unemployment rate in the South now exceeds that in the West. Unemployment also rose sharply during this period in the nonmetro Midwest, where the unemployment rate now exceeds that in the Northeast.

d

Among all county economic types, nonmetro unemployment rates were generally highest in mining counties during the 1990s. However, following job losses in 2001, 2002, and 2003, manufacturing counties now have the highest nonmetro unemployment rate. While farming counties had the lowest nonmetro unemployment rates among all county economic types during most of the 1990s, services counties now claim that distinction.

d

Back to top