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Neighbors Growing Together | Dec 9, 2016
AGRICULTURE

Iowa near top of US rural income growth

Nov 08, 2016

AMES — The United States Census Bureau released its report on income and poverty in urban and rural America in September.

While the report focused on nationwide trends, Iowa State University associate professor and extension rural sociologist David Peters was more interested in how rural Iowans had been affected over the last decade.

“The results were a bit surprising,” Peters said. “Despite recent concerns of a decline in rural Iowa’s income, this proved not to be the case. Over the last decade, rural households are doing well and, in fact, are doing better than urban Iowans and better than other rural areas in this country. The statistics certainly fly counter to the narrative that you can’t make a living in rural Iowa.”

The 2015 median household income in rural Iowa was $60,223, almost 11 percent higher than urban incomes ($51,705). Rural Iowans also have become wealthier than rural residents in other states. After being on par with national rural averages prior to 2012, incomes of rural Iowans were about 10 percent higher than those living outside the state.

“I would have suspected rural incomes to go up and down mirroring market trends,” Peters said. “When commodity prices were high we didn’t see a huge jump in income and didn’t see a corresponding decline as prices have gone down.”

Peters attributes that steadiness to a decoupling of farm and rural economies. Many rural residents are able to easily commute to larger cities for jobs, meaning that for many residents income is consistent even when farm commodity prices decline.

“Unlike states like Nebraska or the Dakotas, Iowa has a number of fairly good sized cities spread out throughout the state,” Peters said. “Most rural Iowans can reach one of these cities after driving for only 25-30 minutes. People who choose to live in small towns can still easily be engaged in a meaningful career in larger cities.”

Incomes in rural Iowa have also grown faster than those in urban parts of the state. Since 2005, the median income of rural Iowans has grown by 9.6 percent while urban Iowans have seen their income grow by just 3.7 percent.

Iowa ranks 21st nationally in rural median income, with its rural income growth of nearly 10 percent over the last decade the sixth-highest growth rate in the country. Conversely, Iowa has the 30th highest urban income average and its 3.7 percent growth is 26th-best.

“Iowa needs to focus on professional service jobs,” Peters said. “High-end technology and service jobs are wonderful to target and Iowa should continue to pursue those type of jobs. However the state has to pay attention to middle skill jobs because they provide good incomes and are more stable through periods of recession. There must be a focus on good high school and technical degree granting jobs; you can make a good living in rural Iowa and those industries are thriving.”

Detailed information on income trends in both rural and urban Iowa can be found in Peters’ publication “Household Income Trends in Iowa and the U.S, 2005-2015: Rural versus Urban Differences” (SOC 3077).

 

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