Throughout big cities, inflation is impacting the residents heavily, but a new study has found that it is even worse throughout rural America.
“Rural households are more vulnerable to inflation,” a recent report sent out by Iowa State University stated. “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,” stated the report.
Those living in rural America have experienced extreme price hikes that are higher than those seen by people living in cities.
“Urban households were less affected by inflation, having higher post-tax incomes ($76,411) and more discretionary incomes ($16,414) in 2020,” explained the report. “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 go along with this inflation, income levels for rural areas have dropped far more than those around urban areas.
“Rural discretionary incomes dropped by -8.7% in 2021, but by 2022 rampant inflation cut this income cushion by -40.4%,” read the report. “By contrast, urban families actually saw discretionary incomes rise by 1% in 2021, but they fell by -13.9% the following year.”
The released report also looked into how different regions of America have dealt with the insanely soaring inflation.
“The northeastern U.S. has slower price gains of only 7.6%,” stated the report. “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%,” explained the report. “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.”