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Rural economy in deep downturn, losing more jobs than metro areas


Last year's farm boom shielded rural America from the full effects of the global economic downturn. With the waning of that boom, however, the rural economy is now losing jobs at a faster rate than the rest of the nation, according to a study from the University of Missouri Rural Policy Research Institute.

"This is a much deeper downturn than rural America has experienced for a long time," said Mark Drabenstott, director of the RUPRI Center for Regional Competitiveness. "We're at a point now where rural areas throughout the nation have lost more than 3 percent of their jobs. You have to go back to 1973-74 or 1981-82 to find such a deep downturn."

U.S. nonmetropolitan counties lost 3.4 percent of their jobs for the 12 months that ended in January 2009, compared to a 2.8 percent drop in metro counties, according to the U.S. Bureau of Labor Statistics.

Missouri's nonmetro job losses are running higher than the U.S. average. Statistics gathered by RUPRI show that as of February, Missouri's 79 nonmetro counties are losing jobs at an annual rate of close to 4 percent.

During last year's farm boom, net U.S. farm income hit a record of nearly $90 billion. Jobs continued to grow in farm-dependent rural counties throughout 2008 before dipping into recession during the year's final two months, Drabenstott said.

"Rural manufacturing, services, retail and construction have all been affected. Shrinking state and local budgets have led to further job cuts," he said.

Rural manufacturing is experiencing a particularly severe contraction, losing about 5 percent of its jobs since the recession began, compared to 2 percent for metro counties, he said.

Ethanol plants have had a comparatively small positive impact on local rural economies, he said.

"These ethanol plants yield relatively few jobs, although the jobs created typically pay high wages. The important consideration is whether the plant is locally owned or owned by corporate interests outside the region," he said.

"Locally owned plants create positives for a local economy, but my general sense is that these plants are not a widespread solution to rural America's quest to find new economic engines," he said.

Rural communities should think about the distinct economic assets on which they can build a sustainable economic future, he said. "Given the downturn in rural manufacturing, I think it really calls into question the kind of smokestack-chasing approach that many communities have taken over the last several decades. Communities and regions should ask what they do best in a global economy."

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