The Evolving Face of Rural America: Myths and Realities

The perception of rural America as a fading entity often overshadows its vibrancy and contributions to the national landscape. Contrary to the notion that these communities are on a path to inevitable decline, many rural areas are actually experiencing growth, bolstered by increasing diversity and evolving economic structures.

Rural Communities: Contributors to the National Economy

Accounting for approximately one-seventh of the U.S. population, rural communities contribute around $2.7 trillion to the nation’s GDP, representing nearly 10 percent of the total. An enhanced understanding of these areas can facilitate new opportunities for their residents and amplify their overall economic impact.

Opportunities for Economic Mobility

Recognizing the significant barriers faced by diverse populations aligns with the mission of the McKinsey Institute for Black Economic Mobility, which recently announced a commitment to supporting economic mobility for rural and Latino communities. This effort aims to build upon prior successes in fostering economic advancement.

In the coming months, the McKinsey Institute plans to release a flagship report that delves deeper into rural economic mobility, aiming to reshape the narrative surrounding rural America.

Understanding “Rural”: The Definitions That Matter

a major challenge in assessing rural America lies in the absence of a standardized definition for “rural.” Various U.S. government agencies employ differing criteria, which complicates policy implementation and resource allocation. This inconsistency results in a rural population estimation of 45 to 50 million, depending on the definition applied.

For this analysis, the USDA’s rural-urban continuum codes were utilized, which classify 61 percent of U.S. counties as rural—housing an estimated 46.3 million people in 2023.

The Case for a Unified Definition

A uniform definition of rural would facilitate resource distribution and reduce disparities among communities. For instance, federal investments like those from the Infrastructure Investment and Jobs Act (IIJA) could yield greater benefits if eligibility criteria were standardized across all programs.

The Demographics of Rural America

Rural America spans all 50 states and encompasses a majority of U.S. land area. Despite its vast expanse, the population density remains relatively low, making up only 14 percent of the total U.S. population. However, rural communities are becoming more racially and ethnically diverse, with a noticeable shift over the last decade—Hispanic and other racial groups have increased in representation.

Educational Attainment Disparities

Educational attainment presents distinct challenges in rural America, with a stark contrast to urban areas. While 34 percent of the urban population holds a bachelor’s degree or higher, only 20 percent of rural residents achieve the same level of education. This imbalance can create significant implications for economic mobility and job opportunities.

Economic Dynamics and Community Growth

Rural counties have shown significant progress over the years, with GDP increasing by 15 percent from 2010 to 2022 and median household income climbing 43 percent to nearly $60,000 annually. The diversity of employment opportunities in these areas transcends the common stereotype of rural life being solely agriculture-focused.

In fact, government, manufacturing, and healthcare comprise the top sectors for rural employment, highlighting the dynamic nature of rural economies.

Connectivity and Infrastructure Challenges

Rural America usually grapples with distinct infrastructure challenges, notably in broadband access. However, initiatives are underway to enhance connectivity, as evidenced by substantial funding from the Bipartisan Infrastructure Act aimed at improving rural broadband and transportation networks.

Prospects for Rural Communities

The economic potential within rural America remains substantial, yet uneven. Many rural areas continue to experience income declines from one generation to another. Key factors influencing these intergenerational shifts include local economic conditions, labor market trends, and access to quality education.

Conclusion: The Path Forward

As greater attention is directed towards the characteristics and challenges of rural communities, there is a recognized need for tailored strategies that can enhance economic mobility and resource accessibility. Our forthcoming research will explore archetypes specific to rural areas—informing policy and development efforts that align with the unique circumstances of each community.