In 2012, 17.7 percent of the population, or about 8.5 million people, living in nonmetropolitan (nonmetro) areas were poor. This poverty rate is slightly higher than the 2011 poverty rate (17.0 percent). The metropolitan (metro) area poverty rate was 14.5 percent in 2012, not statistically different from 2011 (14.6 percent). As a result, the gap between nonmetro and metro poverty rates widened, from 2.4 percentage points in 2011 to 3.2 percentage points in 2012. See How Is Poverty Defined? for more information.
The higher incidence of nonmetro poverty relative to metro poverty has existed since the 1960s when poverty rates were first officially recorded. In the 1980s, average poverty rates were 4.5 percentage points higher in nonmetro areas than in metro areas; in the 1990s, the average difference was 2.6 percentage points; from 2000 to 2009, the average difference was 2.7 percentage points. The difference in 2010 (1.6 percentage points) was the smallest on record and was only the second time since 1959 that the nonmetro/metro poverty rate gap had fallen below 2 percentage points (it was 1.8 in 1994).
During the 1990s, the nonmetro poverty rate declined fairly steadily from a high of 17.2 percent in 1993 to a record-low rate of 13.4 percent in 2000. The decline in poverty during the 1990s was mirrored by growth in the economy overall. Between 1993 and 2000, the economy grew by 4 percent per year, significantly higher than the average growth rate of 2.7 percent during the 20 years prior to 1993. Nonmetro poverty rose during the 2001 recession to 14.2 percent where it remained for 3 consecutive years before increasing once again. The average nonmetro poverty rate from 2004 to 2007 was 15.0 percent. The nonmetro poverty rate grew by 1.9 percentage points from 2008 (15.1 percent) to 2011 (17.0 percent). In 2012 it increased again, to 17.7 percent, reaching its highest rate since 1986 when it was 18.1 percent. This indicates that due to the most recent economic downturn and subsequent slow recovery, an additional 1.1 million nonmetro residents fell below the poverty line from 2007 to 2012.
While the overall rate of nonmetro poverty is higher than metro poverty, the difference in nonmetro and metro poverty rates varies significantly across regions. The nonmetro and metro poverty rate gap for the South has historically been the largest, averaging 5.1 percentage points over the last two decades. In 2012, the South had a nonmetro poverty rate of 22.1 percent and a metro poverty rate of 15.2 percent. The difference in poverty rates in the South is particularly important for the overall nonmetro poverty rates because an estimated 43.1 percent of the nonmetro population lived in this region in 2012. Regional poverty rates were most alike in the Midwest, with 13.6 percent in nonmetro areas and 13.3 percent in metro areas. Poverty rates were also similar in the Northeast in 2012, with 14.2 percent in nonmetro areas and 13.5 percent in metro areas.
Given the impacts of the 2007-09 recession and subsequent slow recovery, 22.4 percent or 703 of all counties had poverty rates of 20 percent or greater over 2007 to 2011 compared to 494 in 2000. These high poverty counties are disproportionately nonmetro (based on 2013 metro-nonmetro definitions), including 28.9 percent (571) of all nonmetro counties in contrast to 11.3 percent (132) of all metro counties. The majority of nonmetro high poverty counties and nonmetro poor are located in areas with a long history of distressed or transitioning regional economies, many with a former dependency on natural resources and/or a largely low-skill minority population. Overall, high poverty counties tend to be clustered into groups of contiguous counties that reflect distinct regional and racial concentrations.
Of the 571nonmetro counties classified as high-poverty counties over 2007 to 2011, three-fourths reflect the low income of their racial and ethnic minorities and are classified as Black, Hispanic, or Native American high-poverty counties. In these counties, either a majority of the poor are Black, Hispanic, or Native American, or it is only the high incidence of poverty among these minority groups that brings the county's overall rate above 20 percent. Of the remaining fourth of high-poverty counties, most are located in the Southern Highlands of eastern Kentucky, West Virginia, and parts of Missouri and Oklahoma. In these areas, the poor are predominantly non-Hispanic Whites. Other high-poverty counties are neither minority nor Southern Highlands. They include thinly settled farming areas in the northern Great Plains, where annual income levels vary widely depending on wheat and cattle prices and output. They also include areas with significant housing market and employment impacts associated with the 2007-09 recession and preceding financial crisis.
Persistence of Poverty
An important dimension of poverty is time. An area that has a high level of poverty this year, but not next year, is likely better off than an area that has a high level of poverty in both years. To shed light on this aspect of poverty, ERS has defined counties as being persistently poor if 20 percent or more of their populations were living in poverty over the last 30 years (measured by the 1980, 1990 and 2000 decennial censuses and 2007-2011 American Community Survey 5-year estimates). Using this definition, there are currently 353 persistently poor counties in the United States (comprising 11.2 percent of all U.S. counties). The large majority (301 or 85.3 percent) of the persistent-poverty counties are nonmetro, accounting for 15.2 percent of all nonmetro counties. Persistent poverty also demonstrates a strong regional pattern, with nearly 84 percent of persistent-poverty counties in the South, comprising of more than 20 percent of all counties in the region.
Metro counties are commonly characterized as densely populated central cities and suburbs, and nonmetro counties as sparsely populated small towns and open countryside. This distinction oversimplifies the many differences across metro and nonmetro areas. Some metro counties have relatively small populations and are adjacent to rural areas, and some nonmetro counties contain urban areas but still qualify as nonmetro. A more comprehensive classification—separating metro areas into highly and less-urbanized counties (using metro area population as cutoffs) and categorizing nonmetro areas by degree of urbanization and adjacency to metro areas—reveals important differences in poverty. For instance, this classification indicates that degree of poverty and degree of rurality are linked. More than 35 percent of the people living in completely rural counties live in high-poverty counties and more than 26 percent live in persistent-poverty counties. In contrast, about 6 percent of the people living in the most urban nonmetro areas live in high-poverty counties and 4 percent live in persistent-poverty counties. For more details on the county classification, see 2003 Rural-Urban Continuum Codes.
How Is Poverty Defined?
Any individual with total income less than an amount deemed to be sufficient to purchase basic needs of food, shelter, clothing, and other essential goods and services is classified as poor. (For details, see "How the Census Bureau Measures Poverty.") The amount of income necessary to purchase these basic needs is the poverty line or threshold and is set by the Office of Management and Budget (OMB). The 2012 poverty line for an individual under 65 years of age is $11,945. The poverty line for a three-person family with one child and two adults is $18,480. For a family with two adults and three children the poverty line is $27,400. For a complete list of poverty lines by size of family and number of children, see the U.S. Census Bureau's tables of Poverty Thresholds.) Income includes cash income (pretax income and cash welfare assistance), but excludes in-kind welfare assistance, such as food stamps and Medicaid. Poverty thresholds are set for families by size and composition, and they are updated annually to correct for inflation.
Metro-nonmetro comparisons of poverty rates pose some difficult measurement issues that are worth bearing in mind. As one example, U.S. poverty rates do not make any adjustments for differences in cost of living across areas. If it is assumed that the cost of purchasing basic needs is cheaper in nonmetro areas, then the nonmetro poverty rate would be lower. There are many other examples though, and the effect they would have on the area poverty rates go in either direction. For example, the poverty thresholds do not account for the possibility that basic needs will differ across areas. Transportation to work in nonmetro areas may be much more expensive than in metro areas where access to public transit is greater. Similarly, the measure of poverty does not account for access to other "public goods" such as health care, schooling, or communication networks, or "public bads" such as noise and air pollution, which also differ systematically across metro and nonmetro areas.