Inflation Hammering Rural America, 91% Of Income Used Just To Live, Study Finds

Inflation in big cities is crushing residents right now, but it’s even worse in rural America, a new study found.

“Rural households are more vulnerable to inflation,” a report from Iowa State University shows. “In 2020, rural household post-tax incomes stood at $58,012. About 82% of rural incomes went towards expenses, leaving $10,661 in discretionary income for savings and unanticipated expenses.”

“However, by 2022 expenses rose by 18.5% overall. Earnings were not able to keep pace with inflation, rising by only 6.1%. The net effect cut rural discretionary incomes by -49.1% between June 2020 and June 2022, reducing the cushion to only $5,426. Expenses now consume 91% of rural take-home pay,” the report said.

Rural Americans saw more of a hike in prices than people living in cities did.

“Urban households were less affected by inflation, having higher post-tax incomes ($76,411) and more discretionary incomes ($16,414) in 2020,” the report said. “Over the past two years, expenses rose more slowly at 14.5%, while earnings for urban workers rose by 8.6% This cut discretionary income by only -13.1%, leaving a sizable cushion of $14,270.”

To make matters worse, income in rural areas have fallen far more than those in urban areas.

“Rural discretionary incomes dropped by -8.7% in 2021, but by 2022 rampant inflation cut this income cushion by -40.4%,” the report continued. “By contrast, urban families actually saw discretionary incomes rise by 1% in 2021, but they fell by -13.9% the following year.”

The report also looked at how different regions of America have fared under soaring inflation.

“The northeastern U.S. has slower price gains of only 7.6%,” the report said. “On the other side of the country, Pacific Coast states also have below average inflation at 8.3%. This is surprising given both areas contain some of the nation’s largest cities. For example, prices in the New York City metro area only rose by 6.7%. In California, the cost of living in the San Francisco metro rose by only 6.8%, and in Los Angles prices rose a bit faster at 8.6%.”

“On the other hand, inflation is hitting people hard in parts of the southern U.S., in particular the west south central states (including Texas and Louisiana) where prices jumped by 10.6%,” the report said. “Inflation is also a problem in the Mountain West (ranging from Arizona to Montana) and Southeastern states along the Atlantic (from Virginia down to Florida). Inflation in Atlanta, Miami, and Houston are all near or over 11%. Price gains in the Chicago metro are likely driving inflation in the Great Lakes states.”

Joseph Curl has covered politics for 35 years, including 12 years as White House correspondent for a national newspaper. He was also the a.m. editor of the Drudge Report for four years. Send tips to [email protected] and follow him on Twitter @josephcurl.

*As an Amazon Associate I earn from qualifying purchases