WASHINGTON, June 4, 2014 - The decline in population in America’s rural areas, notably the Great Plains, appears to be accelerating, according to a report by the Federal Deposit Insurance Corporation (FDIC).
While FDIC’s 16-page treatise focuses on the implications of rural depopulation on community banks it regulates, it also sheds light on a trend that affects government agencies providing health care and other services. Low population density poses challenges to local governments in “maintaining critical infrastructure such as transportation systems and public schools,” FDIC notes.
The decline in rural population began before 1930, when more than a third of rural counties in the United States reached their maximum population, FDIC said, “and the trend appears to be accelerating.” It uses Census figures to show that 692 rural counties lost population between 1980 and 2010, an increase from the 529 that lost population between 1970 and 2000.
Most of the counties with significant population losses are clustered in four regions, FDIC found. Of those, the Great Plains region “has long been affected most strongly by rural depopulation” and today has the lowest population density of the four. In the 30 years from the 1980 to 2010 Censuses, more Great Plains counties (199) lost than gained (138) people. Of those that lost in the Plains, 141 were classified as “accelerated declining” counties. The Corn Belt had 112 such counties, the Delta South region 70 and eastern Appalachia 20.
Although the dramatic population loss during the 1930s Dust Bowl has not been replicated, “a majority of Great Plains counties have experienced depopulation in every decade since 1930,” says the paper by FDIC’s John Anderlik and Richard D. Cofer Jr. “Between 1930 and 2010, rural counties in the Great Plains region cumulatively shed more than 40 percent of their population.”
What they characterized a decade earlier as “a slow, self-reinforcing cycle of decline,” particularly in the Great Plains, has not abated. “Population trends have, in fact, worsened since 2000 -- not only are depopulation trends now covering more of the country than they did in 2000, but also in many areas the depopulation is accelerating.”
Despite the overall trend, FDIC finds recently “a few favorable developments” in pockets of rural America, most notably in the northern Great Plains and Appalachia. “In some rural areas, energy drilling represents perhaps the most promising economic development in decades.” Although these isolated developments do provide some optimism, the authors say, “the likelihood of a large-scale reversal in rural depopulation trends seems remote.”
Community banks have weathered the loss of population, FDIC concludes, and in some areas outperformed their peers, “thanks to the strong agricultural economy, which kept agricultural loan portfolios from feeling the adverse shocks” of other financial sectors. These rural banks, however, will have to manage with the prospect of weak or negative population growth.
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