County Economic Status Designations in the Appalachian Region, Fiscal Year 2005
IntroductionIn accordance with the Commission's policy for determining the economic status of the 410 Appalachian counties, the Research staff has analyzed the distribution of Distressed, Transitional, Competitive, and Attainment counties for Fiscal Year 2005. 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. The poverty data will be updated with the next decennial census. Therefore, the most current data available for calculating the economic status in Fiscal Year 2005 include the 2000–2002 three-year average unemployment rate (U.S. Bureau of Labor Statistics), 2001 per capita market income (U.S. Bureau of Economic Analysis), and the 2000 poverty rate (U.S. Census Bureau). Criteria for County Economic StatusDistressed 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. (Note: Table 1 describes the thresholds used to determine county economic status designations.)
*A county may also be classified as distressed if its poverty rate is 200 percent of the U.S. average and has Either an unemployment rate of 150 percent or more of the U.S. average OR an income level of 67 percent or less of the U.S. average. Regional Changes in Economic StatusOf the 410 counties in Appalachia, 15 will experience a change in their economic status in Fiscal Year 2005. Several improvements are revealed in the Appalachian economy but only as a result of rising national unemployment rates, one of the indicators to which county figures are compared. Ten counties will move out of the Distressed category while only one county will be added, resulting in a net reduction of nine Distressed counties. The reduction from 91 to 82 Distressed counties will influence changes in the Transitional category as county economic levels improve. Thirteen counties will be added to the Transitional category while one county drops to Distressed and another improves to Competitive. This will result in a rise from 289 to 300 Transitional counties and a net increase of 11 counties. The Competitive category reveals the effects of the recent economic downturn in metropolitan areas as three counties drop to the Transitional category as a result of rising unemployment rates. One county will improve to the Competitive category, by surpassing the income threshold, and cause a net decrease of two counties, from 22 to 20. The Attainment category, consisting solely of metropolitan counties at or above national averages, remained constant with eight counties despite minor increases in unemployment. The net change in county economic status, by category, is outlined in Table 2 as well as on the maps at the end of the report.
State-Level Analysis
County-Level Analysis As previously mentioned, fifteen counties will experience a change in economic status in Fiscal Year 2005 based on the comparison of their economic indicators with national averages. As shown in Map 2A, using directional arrows, eleven counties will undergo a positive shift while only 4 counties will be negatively affected. A brief description of these changes is provided below while the data used to determine each county classification are listed in Appendix 1. Map 2B portrays the county designations without the directional arrows showing change. Bartow County, Georgia – Declined from Competitive to Transitional because its three-year average unemployment rate of 5.0 percent is now greater than the national average. Adair County, Kentucky – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 108.3 percent of the national average. Bath County, Kentucky – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 140.3 percent of the national average. Cumberland County, Kentucky – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 135.9 percent of the national average. Powell County, Kentucky – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 145.5 percent of the national average. Benton County, Mississippi – Declined from Transitional to Distressed because its three-year average unemployment rate rose above the 150 percent threshold to 189.0 percent of the national average. Alexander County, North Carolina – Declined from Competitive to Transitional because its three-year average unemployment rate of 5.5 percent is now greater than the national average. Caldwell County, North Carolina – Declined from Competitive to Transitional because its three-year average unemployment rate of 6.1 percent is now greater than the national average. Lawrence County, Ohio – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 128.9 percent of the national average. Blount County, Tennessee – Improved from Transitional to Competitive because its per capita market income of $21,201 is now greater than the 80 percent threshold at 80.6 percent of the national average. Campbell County, Tennessee – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 122.5 percent of the national average. Cocke County, Tennessee – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 145.7 percent of the national average. Wise County, Virginia – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 117.3 percent of the national average. Lewis County, West Virginia – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 135.9 percent of the national average. Summers County, West Virginia – Improved from Distressed to Transitional because its three-year average unemployment rate dropped below the 150 percent threshold to 147.9 percent of the national average. At-Risk County AnalysisThe net shift of nine Distressed counties to the Transitional category in Fiscal Year 2005 prompts an investigation of "at-risk" counties to determine the possibility of an economic backslide in the future. 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 no more than two-thirds of the national average, 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. In Fiscal Year 2005 the number of At-Risk counties will decrease slightly from 51 to 49 because of shifts in the Distressed and Transitional categories. The nearly net-zero effect is caused by previously designated At-Risk counties improving to the higher end of the Transitional category and former Distressed counties taking their place to become Transitional but with at-risk indicators. In fact, seven of the ten counties that moved out of the Distressed category are still considered At-Risk. In general, these trends suggest a temporary improvement in the Appalachian economy, as the number of the Distressed counties is reduced and At-Risk counties shift into higher categories. See Table 4 for a summary of At-Risk counties in each Appalachian State. Table 5 and Map 3 provide the names and location of At-Risk counties in the Region.
Table 5: "At-Risk" Counties by State for FY 2005 Alabama Georgia Kentucky Mississippi New York North Carolina Ohio Pennsylvania Tennessee Virginia West Virginia | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||