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State of Recession in Rural NC
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State of Recession in Rural NC

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The slides were prepared for Billy Ray Hall, President of the NC Rural Economic Development Center

The slides were prepared for Billy Ray Hall, President of the NC Rural Economic Development Center


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  • The Rural Center counts 85 of North Carolina’s counties as rural, based on population density. The Rural Center’s view of what is rural is counter to the crude notion that rural equals non-metro North Carolina. Or that every county within a metro region is urban. In fact, according to the 2000 Census, nearly 49 percent of North Carolina's rural population, as defined by the Census Bureau, lives in a metropolitan county. In the future we will understand far better the increasing interdependence of rural and urban North Carolina.
  • The 40 Tier 1 counties are the most economically distressed in the state. All but one of them are rural. The Rural Center’s activities are concentrated in assisting these counties.
  • The seven economic development regions bring a necessary regional framework. Through them, we gain a better sense of shared regional challenges, and see the potential for collaborative strategies.
  • These are June figures. The July statewide unemployment rate was released last week, but it will be this Friday before the county numbers are released. The July statewide figure did not move much from the June rate. There are 56 counties with unemployment rates above the state average – 48 of them are rural.
  • Until county numbers are released later this week, this is the most up to date landscape of unemployment we have. The cluster of counties between Charlotte and Asheville and extending north up to Wilkes County is an intense cluster of high unemployment counties reflecting loss of manufacturing jobs. Two other clusters stand out: The rural triangle of counties anchored by Anson and Scotland counties extending up to Davidson County. Finally there is the region including Edgecombe, Nash, Halifax, Warren, and Vance counties.
  • How has the recession changed the composition of the rural labor force? The next set of slides will show the percentage change over time of key employment sectors that make up the state’s total labor force, then the percentage each sector makes up of urban and rural nonfarm employment. We use county data from the Federal Bureau of Economic Analysis which gives us the rural and urban values between 2001 and 2007. After that, we have only the state figures provided by state Employment Securities Commission. So for now we can only extrapolate the rural impact of the recession on specific sectors of the economy.
  • There is a relationship between educational attainment levels and employment. Recessions by and large hit the least-educated the hardest. This slide highlights the parallel trend between unemployment graduation rates. This is consistent with a national trend. The Bureau of Labor Statistics estimates that in July of 2009 the unemployment rate for the civilian labor force that had less than a high school diploma was 15.4 percent. For high school grads, the rate was 9.4 percent. For those with a bachelor’s degree or higher it was 4.7 percent. The North Carolina graduation rates alone did not cause the higher unemployment rates, but addressing broad education needs is a critical part of the equation of how these counties recover in the future.
  • The largest increases this decade in poverty come from two regions of rural North Carolina long hurt by chronic poverty. It is important to note that this map just takes us up to the beginning of the recession which officially started in December of 2007. We know that recession induced job loss will increase rural poverty across nearly all of rural North Carolina. This map suggests where those areas are that were already the most distressed at the beginning of the recession.
  • This chart details the change over time in rural and urban employment rates from January 2008, a month after the start of the recession, up to June of this year. Two points stand out: The rural unemployment rate has been consistently higher over the period, with significant increases in the early part of 2009. The job loss significantly ramped up for both rural and urban labor force in October and November of 2008. While the recession officially started nearly a year earlier – the financial melt down of September and October of 2008 was when the impact really began to be felt across North Carolina.
  • This data comes from N.C. Administrative Office of the Courts. Rural foreclosures are lower than the significant numbers we see in urban and suburban communities. In part this reflects the far greater number of homes with mortgages in urban counties. This is consistent with national data. The chart nonetheless affirms that foreclosures are having an impact across rural North Carolina, a counter to a trend that seems to be viewed as only an urban/suburban issue.
  • This maybe the most troubling slide in today’s presentation. “ Exhausted” in this case means that an individual has no further unemployment benefits. As of July of this year, there are nearly twice as many rural North Carolinians as urban ones who have exhausted their unemployment insurance. The rates were always higher from the start of the recession, and may be a sign of the chronic manufacturing job lose in rural communities that had a head start prior to the recession’s formal beginning.
  • Whatever one’s position on the merits of the Obama Administration’s stimulus, we still need to think carefully about how rural North Carolina maximizes the impact of the projected $8.6 billion that will come to the state over the next two years. Approximately $3 billion has already made its way to North Carolina. All of this is formula funding for existing programs such as Title 1 school assistance, weatherization programs, or Workforce Investment Act resources. Another major portion is the one time infusion of state fiscal support which helped North Carolina respond to the down turn. The key point here is not so much what has come so far – formula funding that rural North Carolina communities can change in the near term – but what we do collectively to maximize opportunities for rural communities to secure competitive grants to be put to good use.
  • Of the ARRA funding that has come to the state so far, rural counties have a per capita $49. 42 greater than urban ones. The 16 percent greater per capita in rural counties in part is a reflection of high cost transportation spending in rural counties – which arguably has a broader impact than just for the locality accounts for some of this. The next slide will show why reality on the ground is more complex than simple urban-rural comparisons.
  • Test On the earlier unemployment slide we saw that 48 of the 56 counties with unemployment rates above the state average are rural. 24 of 28 counties (85%) with unemployment rates above 13.2% are rural. Rural Center Research Associate RV Rikard has analyzed the data on funding announced so far. We see that the higher the unemployment rate, the lower the per capita for ARRA funding became. This is a worrisome analysis, and more research and analysis is required to fully understand why this is so. This reminds us of the importance of working with rural North Carolina communities and their leaders to maximize the access and impact of stimulus funding.
  • It is hard to fully appreciate the magnitude of this recession. We have seen job loss before in recessions – but not as we have today. Unless we are old enough to have experienced the 1930’s depression, not in our lifetimes have we seen such economic consequence from the failure of financial markets. We did not get into this over night, and it will take years to recover. Employment growth is always viewed as a “lagging” indicator of a recovery and that will especially be the case here. Many economists fear a “jobless recovery.” The recession impact in North Carolina has two narratives. One is of those who were doing quite well and suddenly found themselves without a job. Maybe that had savings to fall back on. Maybe there were networked and found work elsewhere. Maybe they had neither savings or job connections. But the other narrative is the tens of thousands who were already in poverty at the beginning of the recession, or were teetering on the edge. For them, many of them rural people, this recession has been a catastrophe. It reduces the door of economic mobility to a key hole. Everything we do at the North Carolina Rural Economic Development Center must aim to once again widening that door of opportunity for rural North Carolinians.
  • Transcript

    • 1. How We Commonly See Rural North Carolina Billy Ray Hall President of the North Carolina Rural Economic Development Center Prepared by R.V. Rikard, Senior Associate for Research
    • 2.  
    • 3.  
    • 4.  
    • 5. Frequency of Rural Urban Counties by Unemployment Rate Categories (June 2009) UR Categories Rural Urban 9.1% or Less 14 4 9.2% - 11.1% 23 3 11.2% - 13.1% 24 4 13.2% - 15.1% 16 3 15.2% or Greater 8 1 NC 11.0%
    • 6.  
    • 7. Workforce Composition Change
      • Manufacturing
      • Retail
      • Wholesale
      • Services
      • Government
      • Agriculture
    • 8. Manufacturing Source: Bureau of Economic Analysis and NC Employment Security Commission, Labor Market Information Division. Note: Data suppression underestimates percentage change across years.
    • 9. Retail Source: Bureau of Economic Analysis and NC Employment Security Commission, Labor Market Information Division. Note: Data suppression underestimates percentage change across years.
    • 10. Wholesale Source: Bureau of Economic Analysis and NC Employment Security Commission, Labor Market Information Division. Note: Data suppression underestimates percentage change across years.
    • 11. Services Source: Bureau of Economic Analysis and NC Employment Security Commission, Labor Market Information Division. Note: Data suppression underestimates percentage change across years.
    • 12. Government Source: Bureau of Economic Analysis and NC Employment Security Commission, Labor Market Information Division. Note: Data suppression underestimates percentage change across years.
    • 13. Agriculture
    • 14. Educational Benchmarks Unemployment Rate Categories Percent Graduating 9.1% or Less 74.9% 9.2% - 11.1% 71.2% 11.2% - 13.1% 69.7% 13.2% - 15.1% 67.5% 15.2% or Greater 70.1%
    • 15.  
    • 16. Change in Unemployment Over Time
    • 17. Rural Foreclosures
    • 18. Exhausting Unemployment Insurance
    • 19. Rural North Carolina and the Road to Recovery
      • How do we recover?
      • What is pointing the way?
      • How do we recover better than we were before ?
    • 20. N.C. Economic Development: Regional Snapshots Advantage West Unemployment Rate: December 2007: 4.7 June 2009: 11.2 Percent Change: 6.5 Eastern Partnership Unemployment Rate: December 2007: 5.1 June 2009: 10.9 Percent Change: 5.8 Northeastern Partnership Unemployment Rate: December 2007: 6.0 June 2009: 10.3 Percent Change: 4.2 Piedmont Partnership Unemployment Rate: December 2007: 4.9 June 2009: 11.8 Percent Change: 6.8 Research Triangle Partnership Unemployment Rate: December 2007: 4.0 June 2009: 9.4 Percent Change: 5.4 Southeastern Partnership Unemployment Rate: December 2007: 5.4 June 2009: 10.7 Percent Change: 5.3
    • 21. American Recovery and Reinvestment Act Allocations
      • A projected $8.6 billion in ARRA funding is projected to come to the state over a 2 year period.
      • $3 billion has arrived as of late June, 2009
      • A brief summary
    • 22. Rural/Urban Per-Capita American Recovery and Reinvestment Act Allocation Rural Urban Average Per Capita $352.35 $303.93
    • 23. ARRA funding patterns more complex than simple Rural/Urban comparison
      • Per Capita by Unemployment Rates:
      • 9.1% or Below $350.71
      • 9.2% – 11.1% $400.86
      • 11.2% - 13.1% $391.91
      • 13.2% - 15.1% $292.33
      • 15.2 % or Greater $262.88
    • 24. The 2010 Census: Implications for Rural North Carolina
      • Why it is important:
        • Legislative redistricting.
        • Population estimates drive federal/state funding formulas
        • It is not too early to maximize participation
    • 25.  
    • 26.  
    • 27. Conclusions
      • Recession deeper than any we have experienced in our lifetimes
      • Recovery in rural North Carolina will play out over a long period of time
      • Poverty in increasing across the state; it will get worse before it gets better