Surprising causes of rural poverty

Last month Oklahoma Policy Institute was invited by McCurtain Memorial Hospital in Idabel to give a presentation on poverty as part of a monthly lecture series that the hospital has convened to examine pressing social problems facing their area. Our presentation was prepared by Mariah Levison, a graduate student in International Affairs at Washington University in St. Louis who has been working with OK Policy this summer. Mariah here summarizes some of the data and theories on the causes of  poverty in McCurtain County.

McCurtain County, Oklahoma’s southeasternmost county, also is one of the poorest counties in the state. McCurtain has the third highest poverty level in the state. One in every four residents of McCurtain County lived below the federal poverty level, $22,000 for a family of four, in 2007. The unemployment rate in McCurtain was 10 percent in May of this year. Additionally, McCurtain experienced a population decline of -2.5 percent between 2000 and 2008. During that same time period Oklahoma grew at a rate of 5.6 percent.

To understand poverty in McCurtain County, we have to start with the county’s rural nature. According to The United States Department of Agriculture Economic Research Service (USDA ERS) rural areas tend to be poorer than urban areas, with 14.2 percent of the rural population being poor compared to only 11.6 percent of the urban population. Nationally, the rural poverty rate has exceeded the urban rate every year since poverty was first officially measured in the 1960s. Furthermore, USDA ERS calculates that the poverty rate–16.8 percent–is highest in counties like McCurtain , that are not adjacent to urban counties. The vast majority of poor rural counties are in the South, like McCurtain County.

Using McCurtain County as an example, OK Policy was able to draw some conclusions about rural poverty in general. Well known contributors to poverty include population density and decline, a limited tax base that restricts investment in social capital such as education and health care, and economic structures that include limited opportunities or low wage occupations. OK Policy identified three more surprising factors that contribute to rural poverty.

1. Social norms: According to The Rural Poverty Research Institute, social norms can benefit families and communities or can reinforce poverty. For example, girls in communities where early marriage or child bearing is the norm may not pursue their abilities or invest in their education. Poor children may be taught their opportunities are limited, thereby discouraging them from pursing educational and other goals that would help them to break out of the cycle of poverty.
2. Natural environment: An area’s natural environment – its climate, natural resources, and isolation – often determine its economic vitality, and in turn, its depth and persistence of poverty. According to the USDA, cities have fewer problems related to the natural environment. They are located where they are accessible to the resources people want. Rural areas, in contrast, are rural because they lack some geographic advantage. Geographic isolation creates distance from product and labor markets. The climate and natural resources in an area often contribute to the types of industries and markets that emerge. Communities with resources that can support multiple enterprises are much more likely to develop mixed economies than are communities with a single-source resource (such as rich soil).
3. Amenities: The USDA claims that the first and perhaps most basic factor of population decline (which leads to decreased economic vitality) is a region’s natural and cultural amenities. These include climate, landscape, technological infrastructure such as high speed internet, and entertainment. These features attract not only tourists, but retirees, entrepreneurs, and others whose arrival generates new jobs.

These factors, along with their more traditional counterparts, must be taken into account in rural development strategies. Attempts to attract or retain industry through the use of tax incentives and other economic concessions have too often proved to not be cost effective. The USDA is currently promoting a strategy known as amenities-based development. This strategy focuses on developing both natural and cultural amenities. A forthcoming post will discuss this topic.