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In many parts of the rural Midwest, there are signs of a turnaround in employment

by Carolyn Orr ~ September 2015 ~ Stateline Midwest »
Through the summer of 2014, the news about rural employment was not good. While the U.S. economy as a whole was recovering from the recession, the number of people employed in rural areas remained weak, lagging more than 3 percent behind totals for 2007. And between the second quarters of 2010 and 2014, rural employment had grown only by 1.1 percent (compared to 5 percent in urban areas).
Though the number of people unemployed in rural areas was decreasing, that was due in part to factors such as outmigration and aging populations. Actual jobs had declined or stayed the same in the majority of non-metropolitan counties from 2000 through most of 2014.
But there has been a turnaround of late, especially in many of the Midwest’s rural counties. Over the past year, the rate of job gains in rural America, 1.2 percent, has come close to meeting those in urban counties, 1.8 percent.
The difference is more striking in the Midwest, where rural counties have exceeded urban areas in jobs gained, with a 1.12 percent rise compared to 1.03 percent for urban counties. (In June, the unemployment rate in rural America stood at 5.4 percent. A year ago, it was 6.2 percent.)
This is the first time since 2007 that the rate of job gains in rural America has even come close to meeting the gains in urban counties. (Rural job growth was about 1.2 percent for the last year; the urban rate was 1.8 percent.)
Throughout 2015, most rural areas have been adding jobs above the long-term average. Across the Midwest, growth in the construction and manufacturing sectors is helping add jobs, but every state and county has its own unique economic story to tell.
In South Dakota, home to one of the lowest overall unemployment rates in the country, state Sen. Gary Cammack points to several factors causing a rise in the number of available jobs. One reason, he believes, is the change occurring in North Dakota: With the number of new jobs in the oil and gas industry slowing in that state, Cammack says, people are coming home and filling what had been a backlog of unfilled jobs in South Dakota.
But there might be another reason for the improvement in rural employment: the livestock sector. All livestock industries saw strong financial improvements in 2014, and the beef industry expects record receipts for the second straight year. And what’s good for the livestock industry is good for South Dakota, where this sector’s economic impact is estimated at more than $7 billion.
Cammack says there were many lean years for livestock producers in his state, caused by such factors as higher feed prices, lower returns and the winter storm Atlas in 2013.
“Livestock producers with record net returns are eager to invest in the equipment they need,” he adds.
This, in turn, is good news for surrounding manufacturers and the workers they employ. According to Nick Tindall, the director of government affairs for the Association of Equipment Manufacturers, sales of the smaller, 40- to 100-horsepower tractors used by the livestock industry have jumped to 10-year highs.
But sales of machinery for crop production — tractors with 100 horsepower or more, combines and grain equipment — have dropped, as lower crop prices are squeezing many farmers in the Midwest.
Whether the success of the livestock industry can help sustain job growth in rural counties remains to be seen.

 

Article written by Carolyn Orr, CSG Midwest staff liaison for the Midwestern Legislative Conference Agriculture & Natural Resources Committee.