Feb. 11 (Bloomberg) -- The U.S. is draining residents from its rural areas and small factory cities, a shift showcased in 2010 census data from Iowa and Indiana released yesterday.
Both states saw gains in population concentrated in capital-city suburbs and college towns such as Iowa City and Bloomington, Indiana. The lopsided gains exacted a price in economic growth, retirement costs and political power.
As young people move away from rural and industrial areas, their absence threatens the long-term prospects of the places they leave behind, said David Swenson, an economist at Iowa State University in Ames.
“Without those young adults, you cannot have a growing economy,” he said. “You need that productive labor.”
Indiana’s population grew 6.6 percent to 6.4 million between 2000 and 2010, compared with 9.7 percent for the U.S. The state’s losses played out in its northern and eastern sections, where cities that buzzed for generations with manufacturing jobs are losing residents.
Gary, a northwest Indiana city near Chicago, was the state’s biggest percentage loser among communities of more than 1,500 people, dropping 22 percent of its population. The city, home to a U.S. Steel Corp. plant, fell to 80,294 in 2010 from 102,746 in 2000.
Anderson, a community along Interstate Highway 69 whose fortunes once were linked to parts suppliers of General Motors Co., lost 6 percent, during the decade. Workers left in search of new opportunities as assembly plants run by then-Delphi Corp. and others shut down.
Indiana’s unemployment rate in December was 9.5 percent, just above the national average of 9.4 percent that month. Iowa’s December unemployment rate was 6.3 percent.
Almost a third of Indiana’s counties lost population. The biggest declines were 9.1 percent for Blackford County in eastern Indiana and 6 percent in the northern rural county of Benton.
“A lot of out-migration compounds itself,” said Matthew Kinghorn, demographer at the Indiana Business Research Center at Indiana University in Bloomington. “People most likely to move are 20 to 35 years old, looking for jobs. And those are the childbearing years. So they’re not just taking themselves but their future children as well.”
Counties around Indianapolis, the state’s most-populous city, drove much of Indiana’s growth. Six counties that surround and include the city accounted for 56 percent of Indiana’s population gain.
In Iowa, two-thirds of counties lost population between 2000 and 2010, the new data shows. Depopulation of the state’s rural counties -- a trend that began after World War II -- is leaving behind empty storefronts, churches, schools and farmsteads. It’s also costing political capital.
While Iowa’s overall population grew 4.1 percent to 3 million during the decade, it wasn’t nearly enough to keep up with growth in southern and western states. As a result, Iowa will give up one of its five seats in Congress -- the biggest proportional loss of representation in the nation as a result of the 2010 census.
Swenson said he is concerned that there will be an “intergenerational echo,” as the departure of young families in rural areas means fewer children down the road. He said about a third of Iowa’s counties already record more deaths than births.
“Unless something turns around and changes, we are looking at this state at a level where it may contract,” he said.
The drain of families leaves behind the elderly, placing added demands on social services amid a limited tax base.
“The rural elderly population is increasingly isolated,” Swenson said. “They are more and more insular from the state and isolated from others.”
Almost 15 percent of Iowa’s population is 65 or older, compared with 12.9 percent nationally, according to 2009 census estimates.
Iowa’s growth during the decade took place in its largest metropolitan areas, fueled in part by the Hispanic population. It almost doubled during the decade, and Hispanics now represent 5 percent of the state’s population.
The Des Moines metropolitan area, which includes five counties, grew 18 percent during the decade. Dallas County, a suburban area west of Des Moines, grew 62 percent during the decade, the largest percentage gain in the state.
The area is home to Principal Financial Group Inc., an asset manager and retirement plan provider that has about 6,800 employees in Iowa, and Meredith Corp., publisher of Better Homes and Gardens and other magazines.
White House Contest
While rural counties continue to lose population, the growth of urban and suburban counties could affect the campaign leading to the Iowa presidential caucuses. The contest will provide the first chance to choose among Republicans seeking to challenge President Barack Obama in 2012.
Some of Iowa’s other large counties also recorded double-digit growth during the decade.
Johnson County, home to Iowa City and more than 30,000 students at the University of Iowa, grew 18 percent, the second-largest county gain in the state.
Indiana saw a similar pattern. Indianapolis’s population grew almost 5 percent to 829,718, boosted in part by Hispanic growth. The city’s Hispanic population grew 153 percent during the decade.
The population of Bloomington, home of Indiana University, increased to 80,405, or 16 percent. West Lafayette, where Purdue University is based, grew to 29,596, or 2.8 percent.
‘A Real Pickle’
The residents who remain in population-shrinking counties present “a real pickle” for the economy, said Jim Connolly, director of the Center for Middletown Studies at Ball State University in Muncie, Indiana.
“The population is older, and the people with the resources to move are moving,” he said.
School enrollment has dropped and that has created financial problems, as state financial aid is tied to the number of students in a district, Connolly said.
In 1969, almost half of the jobs in Madison County, Indiana, which includes Anderson, were in manufacturing, compared with less than 10 percent now, according to Mike Hicks, an economist at Ball State.
For now, Iowa’s economy is benefiting from corn and soybean prices at levels not seen in more than two years. Iowa is the biggest U.S. producer of the two commodities.
Climbing agriculture prices helped push farmland values in Iowa up 16 percent in 2010, an Iowa State University survey showed in December. The value of Iowa farmland is 93 percent higher than it was in 2004, according to the report.
Still, the lack of labor in rural America is a threat to agriculture, said Fred Kirschenmann, a North Dakota farmer and the distinguished fellow at the Leopold Center for Sustainable Agriculture at Iowa State University.
“It seems to me we are headed toward a very serious human capital problem,” he said. “It’s not just the population loss, but also this issue that we face in our food and agriculture system.”
As farms get larger, Kirschenmann said, they tend to be more aggressive about purchasing supplies as cheaply as possible, often from dealers outside the area or even the state.
“The wealth no longer stays in the local communities,” he said.
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