Nonmetro Earnings Lag Metro
Timothy
S. Parker
Nonmetro earnings per job are an important
indicator of how the rural economy is performing.
In 2004, average earnings per nonfarm job in nonmetro
areas were $31,582, versus $47,162 in metro areas.
This gap is longstanding, and widening. Nonmetro
earnings were 81 percent of metro earnings in 1979
but dropped to 67 percent by 2004.
Nonmetro earnings trail metro
across all nonfarm industries. And a greater portion
of metro jobs are in higher paying industries. In
2004, industry sectors with the greatest concentrations
of higher paid, college-educated workers posted
the largest shortfalls in nonfarm earnings per job.
Nonmetro earnings in the finance and insurance sector,
for instance, were 43 percent of metro earnings,
information services earnings were 45.5 percent,
and professional technical industry earnings were
49.7 percent. Earnings were more comparable in nonmetro
transportation and warehousing (79.6 percent of
metro), retail trade (74.6 percent), and accommodations/foodservice
(73.1 percent).
Metro areas often have higher
proportions of skilled, higher paid workers within
industries, as well. In 2005, the proportion of
nonmetro workers in higher paying professional and
managerial occupations was 9.3 percentage points
less than in metro areas. At the same time, a greater
share of nonmetro employment is in lower paying
blue-collar occupations.
The higher proportion of nonmetro part-time and
multiple job holders also helps explain the metro-nonmetro
earnings difference. About 18.3 percent of nonmetro
workers held part-time jobs in the first half of
2006, versus 17.2 percent of metro workers. In addition,
about 6.1 percent of nonmetro workers held more
than one job, compared with 5 percent of metro workers.
Finally, greater distance from
metro centers is associated with lower earnings
and fewer job opportunities for educated workers.
Access to centers of information, communication,
trade, and finance enable a smaller economy to connect
to national and international marketplaces. In nonmetro
counties with an urban population between 10,000
and 49,999, earnings per job were 69 percent of
metro, compared with 61.4 percent in nonmetro counties
of less than 10,000.
Lower earnings, however, do not
necessarily indicate that rural residents are
worse off than their metro counterparts. The cost
of living varies with geography, and nonmetro
areas typically have lower costs than metro. For
more information, see, “Adjusting
for Living Costs Can Change Who Is Considered Poor.”
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