Pockets of Rural America Are Less Vulnerable to Economic Fallout — For Now

By: - April 7, 2020 12:00 am

The Iowa Theater in Winterset, Iowa, is closed due to the coronavirus outbreak. So far, Iowa and other rural states have reported far fewer COVID-19 cases than states with large cities and may fare better, relatively speaking, in the aftermath of the pandemic. Charlie Neibergall/The Associated Press

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Every part of the country will feel the economic fallout from the coronavirus crisis. But the small and isolated rural areas that lagged during the economic boom may fare better, relatively speaking, in the aftermath of the pandemic.

Those places tend to be less tied to global and financial markets. With little population density, they are less conducive to virus transmission. So far, states such as Wyoming, the Dakotas, Nebraska and Iowa have reported far fewer COVID-19 cases than New York and other states with large cities.

“If you are a somewhat more isolated economy that does not attract as much visitation from either outside the U.S. or even domestically, you are less vulnerable,” said Adam Kamins, an economist and director at Moody’s Analytics, in a webinar last month.

The states least affected by the huge spike in unemployment claims are largely rural. They include West Virginia, Arkansas and Georgia. In part, that’s because those states have taken less dramatic steps to slow the spread of the virus. Among them, only West Virginia issued a stay-at-home order before the end of March.

Nevertheless, “the industries that have been hard hit are just not as prevalent in rural areas,” said Ernie Goss, an economics professor at Creighton University in Omaha, Nebraska. He cited the relative lack of retail and hospitality businesses in Corn Belt states.

Economists rank regions as economically vulnerable to coronavirus fallout based on demographic and economic factors, including their number of COVID-19 cases, connection to international travelers, reliance on tourism, population density and reliance on global trade, according to a Moody’s Analytics analysis. 

Smaller metropolitan areas in the South and Midwest, such as Birmingham (Alabama), Memphis, Indianapolis and Columbus (Ohio) will experience a low average impact relative to the largest U.S. cities, Kamins said. 

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April Simpson

April Simpson reports on rural issues at Stateline. Before joining Pew, Simpson was associate editor of Current, where she covered public broadcasting and nonprofit media.