Few people in North Carolina or the rest of the country have not been touched by the recent economic downturn, but this slump has hit rural areas, including rural North Carolina, particularly hard.
Endemic Rural Poverty
Most urban and suburban dwellers have in their minds a certain romanticized image of rural America. They think rural areas are “idyllic, healthy settings in which people experience few significant stresses or problems.” The reality of rural America is considerably less romantic.
As Professor Katherine Porter wrote in Going Broke the Hard Way: The Economics of Rural Failure, 2005 Wisc. L. Rev. 969, 1015-1018, rural people are more likely to be poor than urban residents. Furthermore, while urban poverty is frequently alleviated with an upswing in the economy, rural poverty remains constant. When the economy has a downturn, rural areas are hit even harder than urban ones.
Lower Wages, Higher Expenses, Less Wealth
Rural poverty remains a problem for several reasons. The biggest problem is a lower wages in urban areas. Many people believe that most rural Americans work in an agricultural field, such as farming, ranching, or forestry. The truth is that very few rural residents work in agriculture. The majority of rural workers work in manufacturing and the service industry, much like people in urban areas. The problem is that good jobs are even harder to come by. Unemployment is generally higher in rural areas. Educational levels in rural areas are, on average, less than those in urban ones. As a result, higher paying jobs that require higher levels of education are less likely to be located in rural areas, and if they do, they are less likely to help the local population. Additionally, the lower population density makes rural areas less attractive to many businesses as there are fewer customers in a given area.
Not only do rural dwellers have lower wages, but they also have higher expenses. Although housing costs are generally lower in rural areas, transportation costs are significantly higher. With no public transportation and long distances to jobs and shopping, rural residents spend more money purchasing and maintaining their vehicles than do urban residents. Rural residents also pay significantly more for health care. They pay more for out-of-pocket care and they pay higher insurance premiums. They also frequently pay more for food and utilities.
The total effect of lower wages and higher expenses is a dramatic reduction in the total net wealth of rural residents. Rural residents on average have less equity in their homes and vehicles than urban residents. Less wealth and less equity mean less of an ability to weather a financial crisis. For example, an urban dweller with equity in his home can obtain a home equity loan to meet basic expenses during a temporary downturn. She could sell her car and use the equity to pay debts, or to purchase a less expensive car and rid herself of a troublesome loan. Rural residents have considerably less of an ability to do this.
Fewer Solutions Available
Not only do rural dwellers have greater problems with debt, but they also have more trouble finding legal help. With the recent changes of the Bankruptcy Reform Act and Consumer Protection Act of 2005 (BAPCPA), personal bankruptcies have become more complicated and fewer general practitioners in rural counties are handling them. A rural dweller with large debt problems will frequently have to make multiple trips to a distant city to find a lawyer who focuses their practice in this area. This involves more time off work, more expense for child care, and larger transportation expenses than for people living in a city.
Additionally, in this current era of budget cuts, rural areas do not have the population density or the political influence to keep the help that was once available, as seen by the recent cuts to Legal Aid and the complete elimination of several rural offices.
This is why organizations like Roads to Justice North Carolina are critical. R2JNC’s mission is to provide legal education and services to the people who need them most, but have the least access to them.