A look at rural Appalachian finances
Last week the Consumer Financial Protection Bureau (CFPB) released a report about Consumer Finances in Rural Appalachia. This report looks at the entire Appalachian region of the U.S. encompassing 206,000 square miles spanning parts of 13 states and all of West Virginia. Of the 88 Ohio counties, 32 of them are Appalachian, including Coshocton County.
Across the nation, only 14% of the population lives in a rural area. This equates to 46 million of the total 330 million Americans. In Appalachia, that percentage is more than double with 33% of people living in a rural county.
There is a category of counties called “Persistent Poverty Counties,” which means that more than 20% of the population has lived below the poverty line for more than 30 years. Only three counties in Ohio meet this definition in Athens, Meigs and Vinton; compared to almost all the Appalachian counties in eastern Kentucky.
People living in the Appalachian region have long faced financial challenges in comparison to other regions of the United States. This report sifted through some of the current statistics to examine the state of consumer finances in Appalachia. Some areas of interest include practices with different types of loans and medical debt collections and access to services.
Household incomes are much lower in Appalachia compared to the rest of the nation. In rural Appalachia, the annual median household income is $48,964, more than $21,000 below the national median of $70,622. According to the CFPB report, “This gap has increased in the last two decades. While the median rural Appalachian household income was 89% of the national median in 1999, it was only 69% of the national median in 2020.”
As an educator, I found it fascinating the graduation rates differ slightly between Appalachia and the rest of the country by just 4%. And not in the direction you might expect. Nationwide the high school graduation rate is 86%, but in rural Appalachia it is 90%.
So, what does this look like for our finances in Appalachian Ohio? As I look through the numbers here are the ones that jump out at me. The median household income for consumers using credit across the nation is $61,833 and for Ohio is $57,287. The median household income for rural Appalachian Ohio is $46,341.
This is when it becomes a concern. Credit utilization is how much of your available credit you are using. Essentially this equates to keeping balances on credit cards or other revolving loans like a personal line of credit or home equity line of credit. When credit scores are determined, high credit utilization means a lower score.
Rural Appalachian Ohio has a higher credit card utilization rate at 35% compared to Ohio as a whole and the nation at 31%. Pair that with a lower income to begin with and this puts many individuals and families in tight financial situations.
There is also a higher percentage of people in rural Appalachian Ohio with medical debt collection (22%) compared to all of Ohio (19%) and the nation (17%).
The reason this information was studied by the CFPB was to help them ensure that the consumer finance market is fair, transparent and competitive for rural Appalachians. You can learn more about their work and services like education and compliance resources at consumerfinance.gov.
Today I’ll leave you with this quote from Antoine de Saint Exupery: “As for the future, your task is not to foresee it, but to enable it.”
Emily Marrison is an OSU Extension Family & Consumer Sciences Educator and may be reached at 740-622-2265.
This article originally appeared on Coshocton Tribune: A look at rural Appalachian finances
