How Well Have Rural and Small Metropolitan Labor Markets Absorbed Welfare Recipients?. Industry and Occupation Mix

04/01/2001

In rural areas, manufacturing jobs have traditionally paid higher salaries than other industries. While manufacturing jobs are more prevalent in rural areas, jobs in manufacturing have been declining over time. One study reported that between 1969 and 1992, rural manufacturing employment fell from 20 percent to 17 percent of total employment.(25) This has been accompanied by an increase in employment in the service industry, which traditionally pays lower wages, especially in nonmetropolitan areas (as discussed above).

One study examined the occupations in metropolitan and nonmetropolitan areas and found that about 54 percent of the nonmetropolitan labor force was employed in: service; agricultural, precision production, craft, and repair; or operators, fabricator, and laborer occupations. These are occupations where employees are likely to be paid hourly wages rather than salaries, and employees typically incur reductions in hours or layoffs when demand is slack. Consequently, nonmetropolitan labor forces tend to respond more quickly to business cycle movements than the metropolitan ones.(26)