Study shows that parts of rural Arkansas still haven’t recovered to pre-Great Recession economic output levels

The state and national economies have grown significantly since the Great Recession raged more than a decade ago, but a new study released by the University of Arkansas indicates that rural sections of the state have shown far less economic growth and in some places there is less economic activity now than before the financial crisis.

The “Rural Profile of Arkansas” has been published every two years by the University of Arkansas System Division of Agriculture since 1993. The 2019 Rural Profile was compiled by Wayne Miller, professor and extension community and economic development specialist for the Division of Agriculture and extension program associate Tyler Knapp.

Each county in the state is classified as rural or urban, and those rural counties are then divided into one of three geographic zones – Delta, Coastal Plains and Highlands. In Northeast Arkansas, Craighead and Crittenden are the only two counties classified as urban, while most other counties in the region are classified as in the Delta.

“The ‘Rural Profile of Arkansas’ highlights our role in analyzing and finding solutions in economic and community development for our state,” said Mark Cochran, Vice president of Agriculture for the University of Arkansas System Division of Agriculture. “This work is at the very core of our mission to strengthen agriculture, communities, and families by connecting trusted research to workable, practical answers.”

Arkansas’ economy grew 5.8% from 2010-2016, a rate about half the nation’s growth rate of 11.9%. Employment in Arkansas’ rural regions grew less than 1% during this period and was 3.2% less in 2016 than it was in 2007. It’s a decline that has many outward ripples, the report found.

The continuing “outmigration from rural areas of the state to urban areas … is the result of rural economies declining or stagnant,” he said. “Many businesses in rural areas are closing or downsizing.”

Arkansas’ population grew 2.8% between 2010 and 2017, slightly more than half the 5.3% growth nationally. Population declined in each of Arkansas’ three Rural regions, ranging from 0.4% in the Highlands to 5.3% in the Coastal Plains and 5.7% in the Delta, the report states. Rural Arkansas counties tend to have an older population than urban counties. In 2017, the median age in the Rural region was 42.6 years compared to only 37.1 years in the Urban region.

In Northeast Arkansas, two counties showed population growth, Craighead and Greene counties. Greene was the only rural county in the state that showed growth. Several counties including Lawrence, Jackson, and Poinsett showed losses of up to 6% during the time frame outlined, and Mississippi and Clay counties have experienced up to 14% losses. Since 2000, the Delta Region has lost 41,700 residents, or about 13%, the report found.

Although there were slight increases in employment in all three Rural regions of the state in 2011 and again in 2016, employment in 2016 remained below 2007 levels, the report states. Among all rural areas, the Coastal Plains had the largest percentage decline in employment, 6.3% from 2007 to 2016. The Highlands and Delta regions experienced declines of 2.8% and 1.7%, respectively, during this period. All Rural regions experienced a decline in employment from 2007 to 2010 ranging between 3.2% and 4.5%, but only the Coastal Plains experienced a decrease.

Craighead County joined Saline, Washington, Benton and Carroll counties that had job growth in the 7% to 22% range. All other counties in the state either had minimal jobs growth, none, or lost jobs.

The average earnings per job in Arkansas in 2016 was approximately 78% of the national average, $45,217 in Arkansas compared to $58,372 nationwide, the report states. The average earnings per job in Arkansas increased 3.6% from 2010 to 2016, while the national average earnings per job increased 2.2%. However, the increase in the average earnings per job from pre-recession levels in Arkansas was less than two percent (1.9%) due to a decline in average earnings per job from 2007 to 2010.

Although average earnings per job increased at a faster rate in the Rural region of Arkansas from 2010 to 2016, it remains below the pre-recession highs and there remains a persistent gap between rural and urban earnings per job. Average earnings per job in the Rural region increased 3.7% from 2010 to 2016 compared to an increase of 1.9% in the Urban region. This resulted in average earnings per job in the Rural region growing from 83.5% to 85% of that in the Urban region during this six-year period, but remained below the pre-recession level of approximately 87%.