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Urban-rural wage gap is steady

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Archives - October 2008
Wednesday, October 01, 2008

Coins STATEWIDE The often-cited widening gap between urban and rural wages actually has remained unchanged over the past decade, while both urban and rural wages are slipping compared to their counterparts nationwide.

“This is not such good news for rural areas, and it’s not good news for urban areas,” says state employment economist Art Ayre, who did the analysis.

After adjusting for inflation, the urban-rural wage gap has been fairly stable since 1997, says Ayre. “In the unadjusted data, what you were seeing was increasing inflation more than a widening of the gap,” he says. In 1997, average annual earnings for a metro-county worker were $26,944, and for a rural county worker they were $22,051. In 2007, that was $37,236 for a metro worker and $30,191 for a rural worker. After adjustment to 2007 dollars, the wage difference was $7,046 in 1997 and $7,045 in 2007. Counties classified as metro are Benton, Clackamas, Columbia, Deschutes, Jackson, Lane, Marion, Multnomah, Polk, Washington and Yamhill. Rural counties are all other.

Additionally, for the first time in eight years, the average earnings of workers in rural Oregon have fallen below their counterparts nationwide. Until 2006, the latest year for available data, rural wages in the state were at 97% of U.S. rural wages. The wage gap for metro workers in Oregon vs. the nation is even bigger, with those wages at 86% of average U.S. metro wages.

“Oregon just does not have the really large metro areas that the U.S. on average has, and large population centers drive higher wages,” says Ayre.

Being close to a large population center also affects prosperity of rural communities. A recent report by Oregon State University economists says remoteness is the main cause of disparities between communities that flourish and those that do not. The greater the distance between a community and its closest urban neighbor the less likely it is to prosper. That holds true nationwide, the study says, where the communities with the lowest wages are those in the most remote areas.               


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