County Economic Status Designations in the Appalachian Region, Fiscal Year 2004


Introduction

In accordance with the Appalachian Regional Commission's policy for determining the economic status of the 410 Appalachian counties, ARC has analyzed the distribution of distressed, transitional, competitive, and attainment counties for fiscal year 2004. The data used by ARC to determine the Region's economic status were updated and released by source agencies over the past few months. These updates include the annual release of income and unemployment data, as well as the decennial release of poverty data. Therefore, the most current data available for calculating the economic status in fiscal year 2004 include the 1999–2001 three-year average unemployment rate (U.S. Bureau of Labor Statistics), 2000 per capita market income (U.S. Bureau of Economic Analysis), and the 2000 poverty rate (U.S. Census Bureau).

Criteria for County Economic Status

Distressed Counties have poverty and unemployment rates that are at least 150 percent of the national averages and per capita market incomes that are no more than two-thirds of the national average. Counties are also considered distressed if they have poverty rates that are at least twice the national average and they qualify on either the unemployment or income indicator.

Transitional Counties are those counties that are neither distressed, competitive, nor attainment.

Competitive Counties have poverty and unemployment rates that are equal to or less than the national averages and they have per capita market incomes that are equal to or greater than 80 percent, but less than 100 percent, of the national average.

Attainment Counties have poverty rates, unemployment rates, and per capita market incomes that are at least equal to the national rates.

Regional Changes in Economic Status

Using the criteria that are currently in place, the distribution of ARC's county economic levels will change dramatically in fiscal year 2004, due primarily to the reduction of poverty rates between the 1990 and 2000 census. Of the 410 counties in Appalachia, 51 counties will experience a change in economic status. Of these, 40 counties will experience a positive change by moving up in economic status, while only 11 counties will be negatively affected by moving down in economic status. (See Appendix 1 for a list of the 51 counties shifting in economic status. A complete list of the county economic data is provided in Appendix 2.) Although shifts will occur between many of the different categories, the primary change will occur between the distressed and transitional categories, as expressed by the net change of counties in Table 1. Maps 1 and 2 reveal the region-wide changes in economic status between fiscal year 2003 and fiscal year 2004.


Table 1: Net Change in the Number of Counties per Economic Level, Fiscal Years 2003 and 2004
Economic Level Fiscal Year 2003 Fiscal Year 2004 Net Change
Distressed 121 91 -30
Transitional 259 289 +30
Competitive 21 22 +1
Attainment 9 8 -1
Total 410 410 0


Distressed County Analysis

The number of distressed counties in Appalachia will be reduced from 121 counties in fiscal year 2003 to 91 counties in fiscal year 2004—a net reduction of 30 counties. This decline is due primarily to the reduction in poverty rates during the 1990s. Census 2000 data reveal that poverty rates (the percentage of people living below the poverty threshold) were significantly reduced throughout the Appalachian Region. Overall, 350 of the 410 Appalachian counties experienced a reduction in their poverty rate, which led to a region-wide decrease from 15.4 percent in 1990 to 13.6 percent in 2000. More important, the reduction of the Region's poverty rate was much greater than that experienced by the nation as a whole; the national rate fell from 13.1 percent in 1990 to 12.4 percent in 2000. Improving faster than the nation, the poverty rates in many Appalachian counties were significantly reduced when compared to the U.S. average, thereby reducing the total number of distressed counties.

Near-Miss County Analysis

Several counties have been identified as having economic characteristics that border on the distressed threshold but remain in the transitional category. Examining these counties helps to predict potential shifts to the distressed category in the future. The county of greatest concern is Lee County, Virginia, because its three-year average unemployment rate teeters on the distressed threshold. Viewing the rounded, computed data, this county appears to be distressed, but when compared with the U.S. average, the unemployment rate misses the distressed threshold by 0.1 percent. Fortunately, the unemployment rate in Lee County has decreased in the past three years relative to the national average. If this trend continues, the county might remain in the transitional category despite its low income and high poverty rate. The economic data for Lee County and other borderline counties in fiscal year 2004 are displayed in Table 2.

Table 2: Economic Data for Near-Miss Counties
        Percent of the U.S. Average
  Unemployment Rate, 1999–2001 PCMI, 2000 Poverty Rate, 2000 Unemployment Rate, 1999–2001 PCMI, 2000 Poverty Rate, 2000
U.S. Average 4.3% $25,676 12.4% 100% 100% 100%
Distressed Threshold... >=6.5% <=$17,203 >=18.6% >=150% <=67% >=150%
OR >=6.5%   >=24.8% >=150%   >=200%
OR   <=$17,203 >=24.8%   <=67% >=200%
Rockcastle County, Kentucky 6.1%* $11,500 23.1% 141.8%* 44.8% 186.7%
Benton County, Mississippi 6.4%* $11,693 23.2% 147.9%* 45.5% 187.4%
Lowndes County, Mississippi 6.4%* $17,844* 21.3% 146.7%* 69.5%* 172.2%
Lee County, Virginia 6.5%* $11,509 23.9% 149.9%* 44.8% 193.2%
Taylor County, West Virginia 6.3%* $10,800 20.3% 145.7%* 42.1% 164.0%
Upshur County, West Virginia 6.2%* $13,365 20.0% 143.1%* 52.1% 161.7%
BORDERLINE COUNTIES WITH STATIC POVERTY RATES      
Green County, Kentucky 9.2% $10,954 18.4%* 211.5% 42.7% 149.0%*
Swain County, North Carolina 11.7% $12,309 18.3%* 269.6% 47.9% 147.9%*
Morgan County, Ohio 14.0% $13,996 18.4%* 322.2% 54.5% 148.8%*
Meigs County, Tennessee 6.8% $11,943 18.3%* 157.7% 46.5% 147.9%*
* Borderline data are identified by an asterisk.

 

State-Level Analysis
Twelve of the 13 Appalachian states will experience changes in the economic status of counties in fiscal year 2004. Table 3 shows that the number of distressed counties will be reduced in all nine states that previously contained distressed counties. Kentucky, Ohio, and West Virginia will experience the greatest reduction of distressed counties overall. In addition, Pennsylvania's two distressed counties will graduate to the transitional category. In fiscal year 2004, the 91 distressed counties will be located in 8 of the 13 states with concentrations in Central and Southern Appalachia.

Table 3: Comparison of Counties per Economic Level by State in FY 2003 and FY 2004

FY 2003 Designations
State Distressed Transitional Competitive Attainment Total
Alabama 7 27 2 1 37
Georgia 0 27 8 2 37
Kentucky 42 9 0 0 51
Maryland 0 2 1 0 3
Mississippi 14 10 0 0 24
New York 0 13 1 0 14
North Carolina 3 20 3 3 29
Ohio 11 17 1 0 29
Pennsylvania 2 47 2 1 52
South Carolina 0 4 1 1 6
Tennessee 10 39 0 1 50
Virginia 5 17 1 0 23
West Virginia 27 27 1 0 55
Total 121 259 21 9 410

FY 2004 Designations
State Distressed Transitional Competitive Attainment Total
Alabama 5 30 0 2 37
Georgia 0 29 5 3 37
Kentucky 35 15 1 0 51
Maryland 0 2 1 0 3
Mississippi 12 12 0 0 24
New York 0 14 0 0 14
North Carolina 1 21 6 1 29
Ohio 6 22 0 1 29
Pennsylvania 0 49 2 1 52
South Carolina 0 5 1 0 6
Tennessee 8 39 3 0 50
Virginia 3 19 1 0 23
West Virginia 21 32 2 0 55
Total 91 289 22 8 410


At-Risk County Analysis

The increased number of transitional counties prompted a look into the "at-risk" category to reveal changes for fiscal year 2004. Although it's not used for the distribution of ARC funds, the at-risk category helps to identify transitional counties with economic characteristics that border on the distressed threshold. At-risk counties have a per capita market income that is two-thirds of the national average or less, a three-year average unemployment rate that is at least 125 percent of the national average, and a poverty rate that is at least 125 percent of the national average. With the inclusion of Census 2000 poverty rates in the fiscal year 2004 designation, the number of at-risk counties would increase from 42 to 51. Table 4 reveals the change in the distribution of at-risk counties among the 13 states. Notable changes include the creation of at-risk counties in New York and North Carolina and the removal of the at-risk county in Maryland. Overall, the combined number of distressed and at-risk counties would decrease from 163 to 142 counties between fiscal year 2003 and fiscal year 2004—a net decrease of 21 counties. See Table 5 and Map 3 for the distribution of at-risk counties in the Appalachian Region.

Table 4: Comparison of "At-Risk" Counties by State for FY 2003 and FY 2004
State At-Risk Counties
FY 2003		 At-Risk Counties
FY 2004
Alabama 8 10
Georgia 1 1
Kentucky 1 4
Maryland 1 0
Mississippi 4 4
New York 0 2
North Carolina 0 2
Ohio 4 5
Pennsylvania 1 3
South Carolina 0 0
Tennessee 10 6
Virginia 3 2
West Virginia 9 12
Total 42 51


Table 5: "At-Risk" Counties by State for FY 2004

Alabama
Clay
Etowah
Fayette
Lamar
Marion
Randolph
Talladega
Tallapoosa
Walker
Winston

Georgia
Elbert

Kentucky
Edmonson
Green
Pike
Rockcastle

Mississippi
Benton
Calhoun
Monroe
Tippah

New York
Allegany
Cortland

North Carolina
Swain
Yancey

Ohio
Adams
Gallia
Guernsey
Jackson
Morgan

Pennsylvania
Fayette
Forest
Greene

Tennessee
De Kalb
Jackson
Meigs
Morgan
Overton
Pickett

Virginia
Lee
Russell

West Virginia
Grant
Greenbrier
Marion
Marshall
Pocahontas
Raleigh
Randolph
Taylor
Tucker
Tyler
Upshur
Wayne

Appendix 1: Fifty-one Counties with Shifting Economic
Status between FY 2003 and FY 2004
State County FY 2003 Status FY 2004 Status Positive/Negative Change
Alabama Fayette Distressed Transitional +
  Madison Competitive Attainment +
  Morgan Competitive Transitional -
  Winston Distressed Transitional +
Georgia Cherokee Competitive Attainment +
  Habersham Competitive Transitional -
  Hall Competitive Transitional -
Kentucky Clark Transitional Competitive +
  Edmonson Distressed Transitional +
  Green Distressed Transitional +
  Hart Distressed Transitional +
  Lincoln Distressed Transitional +
  Pike Distressed Transitional +
  Rockcastle Distressed Transitional +
  Rowan Distressed Transitional +
Mississippi Benton Distressed Transitional +
  Monroe Distressed Transitional +
  Tishomingo Distressed Transitional +
  Webster Transitional Distressed -
New York Broome Competitive Transitional -
North Carolina Alexander Transitional Competitive +
  Cherokee Distressed Transitional +
  Davie Attainment Competitive -
  Polk Attainment Competitive -
  Swain Distressed Transitional +
Ohio Adams Distressed Transitional +
  Clermont Competitive Attainment +
  Gallia Distressed Transitional +
  Jackson Distressed Transitional +
  Monroe Distressed Transitional +
  Morgan Distressed Transitional +
Pennsylvania Fayette Distressed Transitional +
  Greene Distressed Transitional +
South Carolina Greenville Attainment Competitive -
  Oconee Competitive Transitional -
Tennessee Bradley Transitional Competitive +
  Grundy Transitional Distressed -
  Hamilton Attainment Competitive -
  Jackson Distressed Transitional +
  Loudon Transitional Competitive +
  Meigs Distressed Transitional +
  Morgan Distressed Transitional +
Virginia Lee Distressed Transitional +
  Russell Distressed Transitional +
West Virginia Jackson Distressed Transitional +
  Pocahontas Distressed Transitional +
  Putnam Transitional Competitive +
  Raleigh Distressed Transitional +
  Randolph Distressed Transitional +
  Taylor Distressed Transitional +
  Upshur Distressed Transitional +

Additional Materials

Appendix 2: County Economic Status in the Appalachian Region, FY 2003 and FY 2004
PDF file (51 KB) | Excel file (146 KB)

County Economic Status by State, FY 2003 and FY 2004
PDF file (72 KB) | Excel file (174 KB)

Criteria for County Economic Levels, FY 2003 and FY 2004
PDF file (17 KB) | Excel file (25 KB)

Map 1: County Economic Status in Appalachia, FY 2003 (PDF file—398 KB)

Map 2: County Economic Status in Appalachia, FY 2004 (PDF file—398 KB)

Map 3: County Economic Status in Appalachia, FY 2004 (Includes the At-Risk Category) (PDF file—399 KB)

A complete copy of this information is available in PDF format (1.3 MB).