Inflation hitting rural folks harder

NPR reported yesterday on this study out of Iowa State University, featuring rural sociologist and economist Dave Peters in a story headlined "Why rural Americans feel inflation's effects more than people in cities and suburbs."  Here's an excerpt from Steve Inskeep interviewing Peters:  

PETERS: ... it costs rural households $2,500 more for gasoline than it did two years ago.

INSKEEP: And I guess you're just not in a situation generally where you can drive less or take the bus?

PETERS: Yeah, there is no public transportation. Exactly. People don't buy fuel efficient or electric cars or hybrids. But, yeah, I mean, it's - you have to drive. And people are trimming elsewhere. They're taking it out of savings right now, at this point. So that financial cushion that I like to call it, that extra money after all their expenses and taxes are paid, they're dipping into that. And so that's down to about $5,000 right now for the typical rural household.

INSKEEP: You're saying the average person had $10,000 on hand a couple of years ago. And they've been losing money.

PETERS: Right. And so they're dipping into savings now. But if these prices continue, they're soon going to expend whatever discretionary income they have. Then they're going to start going into debt, likely credit card debt. But a lot of people here in the upper Midwest, what they're doing is they're beginning to take out home equity lines of credit because their home values have gone up. And that's particularly dangerous if home prices fall back down, you know, then they're left with a mortgage that, you know, the value of their home doesn't cover.

INSKEEP: What other significant factors are there besides the transportation costs that you mentioned, which have been driving some people into the red?

PETERS: Fuels for heating your home in rural areas. So most rural homes have to buy tanks of liquefied petroleum or liquefied propane. Or they have to get fuel oil. And those have really risen in costs as well. That's, I think, something like $1,000 more. And then health insurance costs have really increased, as well as veterinarian services (laughter. So rural areas, a lot of livestock, a lot of horses, a lot of kind of animals - and veterinarian services and supplies has also increased more for rural households.

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PETERS: ... there are people that I've talked to in Iowa and in Nebraska... they're really trying to do that financial calculation, you know? They would love to work and get city wages, but they can't commute. It's too expensive with the gas prices. And the, really, thing that's holding them back is the cost of homes. It's not so easy to pick up and move to an urban area because housing costs are expensive.

But a lot of people are really beginning to say - think, if I have to continue to drive for everything and these fuel costs remain high and my wages aren't going up as fast as they are in cities, some people are contemplating moving closer to a city, moving to the suburbs or moving to, you know, a small community, you know, 45 minutes from a city. So yeah, it'll probably, if it continues, accelerate rural depopulation in parts of the Midwest and Great Plains.

Here's a related story about the impact of rising gas prices in upstate New York.