Rural Income Growth Rate Exceeds That In Urban Areas But Incomes Remain Significantly Higher In U.S. Cities, Suburbs

The good news for farmers and others living in rural America is that their incomes are growing faster than those in urban areas. The bad news is that they still lag those in the cities and suburbs.

After declining 0.7 percent during the 1990-91 recession, rural per capita income rebounded 2.2 percent in 1992, 0.9 percent in 1993 and 2.8 percent in 1994, the final year in the Agriculture Department study.

As a result, income was $16,964 in 1994, up from $16,117 at the beginning of the decade.

At the same time, metropolitan area income growth fell 1.4 percent during the recession and then edged up just 1.4 percent in 1992, 0.6 percent in 1993 and 1.6 percent in 1994.

But despite faster growth, the per capita income of farmers and others living in the country trailed metropolitan residents, whose 1994 per capita income was $22,882. That’s $5,918 - or 34 percent - more.

Still, the gap is narrowing. “During times of prosperity, there tends to be a convergence,” department statistician John Angle explained in an interview.

Per capita income is defined as total income - earnings, income from capital holdings including dividends, interest and rental payments and government transfers such as Social Security and Medicare - divided by population.

Rural area income growth in the early 1990s was widespread, Angle writes in the current issue of Rural Conditions and Trends.

But he says the highest income growth - 1.43 percent annually - was in counties that had widespread manufacturing activity. The slowest growth - 0.89 percent a year - was in counties where farming predominated and which had experienced unusually strong 2.03 percent annual growth during the 1980s.

Rural per capita income varies only moderately among regions, Angle says. In 1994, rural per capita income was up 1 percent in the North to $18,028 and up 1.73 percent in the South, to $15,905.

Elsewhere, rural per capita income was up 1.26 percent to $17,598 in the central region and up 0.72 percent to $17,334 in the West.