WASHINGTON, D.C. -- Virtually all current poverty policy debates center on the urban poor. But rural labor markets have higher unemployment and less earnings growth than urban labor markets, according to a report released today, June 21, from the Northwestern University/University of Chicago Joint Center for Poverty Research (JCPR) and the Rural Policy Research Institute (RUPRI).
The report was released at a congressional research briefing in Washington, D.C., funded by the Farm Foundation.
"Many low-income people in rural areas live in small towns and work at low-skill, low-wage jobs in manufacturing and service industries," said Greg Duncan, JCPR deputy director and professor of education and social policy at Northwestern University.
"Opportunities for work are more limited and less financially rewarding than in urban areas. Too many people in rural areas leaving welfare remain poor, and not all are receiving the work-based supports they need to gain economic independence."
Duncan and Bruce Weber, Oregon State University professor and RUPRI welfare reform chairman, presented their summary of research that was based on findings from a May conference titled "Rural Dimensions of Welfare Reform," co-sponsored by the Economic Research Service of the U.S. Department of Agriculture.
The summary focuses on how recent welfare reform -- the ending of cash assistance as a federal entitlement, the imposition of time limits and work requirements and changes in food stamps programs -- is affecting the lives of low-income families living outside of the nation's metropolitan areas.
Culling research from throughout the country, the report offers policy recommendations to deal with the important problems that poor families face in attempting to move from welfare to work, focusing on the specific hardships of the rural poor.
Among the findings:
- Despite America's recent economic boom, rural areas provide fewer job options than urban areas, with the types of jobs offered tending to be part time and minimum wage.
- Low-population densities in rural areas hinder the development of workplace supports and infrastructure (education and training, child care, public transportation). And fewer "safety net services," special health care, shelters and soup kitchens, are available in rural areas.
- The rapid decline of food stamp caseloads in some states is troubling since many families leaving Temporary Assistance for Needy Families (TANF) retain eligibility for food stamps. In Ohio between 1993 and 1998, for example, the fall in food stamp caseloads (49 percent) was even greater than the fall in TANF caseloads (42 percent).
- More than one-third of working rural single mothers are in poor.
- State-level analyses suggest that obstacles to employment for single mothers leaving welfare are greater in rural areas. In Mississippi, for example, labor market areas differ in their capacity to create jobs that match the educational credentials of TANF recipients.
- Welfare recipients who live in or adjacent to urban areas have access to more jobs and jobs that pay higher wages compared to recipients who live in remote rural communities.
The JCPR/RUPRI report concludes that states and the federal government should redouble efforts to make work pay for low-wage workers and suggest that policy makers focus on the problems of the rural poor cited above.
The report cautions that while tight labor markets and low unemployment rates nationwide over the late 1990s have provided the best possible environment for welfare recipients entering the labor market, many still are not making ends meet.
"States need to ensure that families eligible for food stamps, medical insurance and other in-kind programs are in fact enrolled in those programs," said Oregon State University's Weber.
Between half and two-thirds of former TANF recipients find some kind of work in the formal economy. In addition, poverty among low-income families with children has fallen modestly over the late 1990s, with great disparities across states and regions within states.
Not all areas have benefited from the strong economy and welfare reforms, the report concludes. States need to be more flexible with policies for areas that have long suffered from persistently high levels of poverty and unemployment and to put more effort into creating employment opportunities in these areas.
"Policies that encourage work and enhance job readiness but do not address lower rural wages and barriers to working will induce more rural poor to move to the cities," said Weber. He notes that no work-support policies will increase employment where there are no jobs.
"Despite these differences, America's urban and rural areas share many of the same successes and challenges of welfare reform," said Duncan. "Continuing to push welfare reforms' agenda of making work pay will help low income families everywhere."
The executive summary draws four sets of policy conclusions for states and the federal government to make work pay for low-wage workers in both rural and urban areas:
- Maintain a full-employment economy
- Expand the Federal Earned Income Tax Credit to create a separate tier for larger families and reduce the marriage penalty
- Initiate or expand state Earned Income Tax Credit supplements
- Expand coverage and take-up of health insurance and child care assistance programs for
low-wage families
- Take advantage of resources in the Workforce Investment Act to help match workers and jobs
6/21/00
A copy of the JCPR/RUPRI report will be available online at http://www.jcpr.org/conferences/rural-summary.pdf