You may have read conflicting reports last week about the state of rural income. The fact is that median household incomes in rural America actually grew 3.4% in 2015, as opposed to a 2% decline. Incomes in metropolitan areas are up as well, growing 6%.
Here's an excerpt from a New York Times story that details recent changes in definitions that led to differing media reports.
"On Tuesday, when the Census Bureau released one of the country’s most important reports on income and poverty, dozens and dozens of facts were revealed. We found out that real middle-class incomes in America grew a phenomenal 5.2%, and that the poverty rate fell by the largest percentage in nearly 50 years.
That got the headlines. But after the initial buzz, a few reporters across the country, me included, were intrigued by two lines in the first table: While incomes in metropolitan areas grew 6%, those in rural areas fell 2%. That detail prompted articles on how the recovery was unevenly shared.
One problem, though: The number is wrong. Median household incomes in rural America actually grew 3.4% in 2015, according to policy experts who study the census numbers very closely.
It’s worth mentioning what the Census Bureau views as urban and rural. It has a specific, quite narrow definition for rural: a given area that encompasses fewer than 2,500 people. Everything else is “urban,” thus excluding places that many people would consider rural.
The correct median income number is derived from another survey, called the American Community Survey, also compiled by the Census Bureau. It released these numbers on poverty and income in a much smaller report two days later. The crucial figure on median household incomes in rural America isn’t even found on its official report. Instead, it’s buried in American Factfinder, a searchable database of thousands of statistical tables that the census produces (and involves an eight-step process to find).
Why did this happen? The short answer is this: a once-in-a-decade definitional change. The wrong rural income number came from the bureau’s Current Population Survey’s Annual Social and Economic Supplement, a reliable source of detailed information on income and poverty that economists and policy makers have relied on for decades.
However, what that report wasn’t devised to do well is provide solid estimates in fine-grained geographic detail. One reason is that the Current Population Survey’s sample is too small for precise geographic estimates. Its sample is 100,000 addresses; the American Community Survey’s sample is 3.5 million. So on balance, the American Community Survey estimates will generally be better for smaller geographic areas than the Current Population Survey. The trade-off is that the C.P.S. asks more in-depth questions regarding income and poverty.
