future for rural iowa presented at 77 th annual soil management and land valuation conference may...

FUTURE FOR RURAL IOWA

Presented at 77th Annual Soil ManagementAnd Land Valuation Conference

May 19, 2004by Kenneth E. Stone, Professor Emeritus of Economics, ISU

SOME OF THE PROBLEMS

1. Retail Migration

1980 Iowa County Retail Sales Surplus or Leakage

-2.5%

-22.2%

5.9%

-16.1%-7.2%

5.1%

10.8%

-17.5%

-25.3% 21.5%

28.4%

-29.8%

-28.1%

-24.5%

-7.0%-22.0%

-11.2%

-15.9%

-1.8%

-21.7%

-17.7%

-31.0%

3.9%

-30.0%

-28.1%

-25.8%

10.2%

-19.0%

-25.6%

-29.2%

12.8%

-12.5%

33.6%

-20.3%

-50.1%

10.9%

-26.9%

0.9%

-38.2%

-3.5%-15.1%

32.1%

-26.5%

10.3%

21.8%

0.7%

-1.3%

-17.7%

11.8%

0.1%

-25.0%

-23.1%-15.4%

-11.4%

-22.6%-2.9%

-2.2%

4.7%

-12.7%

-4.0% -42.3%

-27.0%

-23.2% -5.3%

1.2%-36.4% -7.6%

-31.8%

-24.6%-29.4% -27.6%-9.8%-37.6% -43.7%

6.6%

-17.1%-5.6%

-5.0%

-28.7%

-16.8%

-12.4% -15.2%

-14.9%

-17.5%

-10.0%1.7%-52.9% -38.5%-12.5%

-31.6%

-31.8%

-16.3% -25.2%9.5%

-20.8%

-38.1%

2.8%5.9% 10.% AllamakeeWinneshiekHowardMitchellWorthWinnebagoKossuthEmmetDickinsonOsceolaLyon

Sioux O'Brien Clay Palo Alto Hancock Cerro Gordo Floyd Chickasaw

Fayette Clayton

DubuqueDelawareBuchanan

Bremer

Black Hawk

Butler

GrundyHardin

FranklinWright

Hamilton

Humboldt

Webster

Pocahontas

CalhounSac

Buena VistaCherokee

IdaWoodbury

Plymouth

JacksonJonesLinnBentonTama

MarshallStoryBooneGreeneCarrollCrawfordMonona

Harrison Shelby Audubon Guthrie Dallas Polk Jasper Poweshiek Iowa Johnson

Muscatine

Cedar

Scott

Clinton

Louisa

WashingtonKeokukMahaskaMarionWarrenMadisonAdairCass

Mills Montgomery

Fremont Page Taylor

Adams Union

Ringgold Decatur

Clarke Lucas

WayneAppanoose

Monroe Wapello

Davis Van Buren

Jefferson Henry

Lee

Des Moines

Pottawattamie

25 SurplusCounties

Four40%+LeakageCounties

2001 Iowa County Retail Sales Surplus or Leakage

-59%-19%28%-37% -5%LYON OSCEOLA DICKINSON EMMET KOSSUTH WINNEBAGO WORTH MITCHELL HOWARD WINNESHIEK ALLAMAKEE

-24%

6%

5%

-36%-36%

-18%

-20%

-21%

-40% 28%

28%

-46%

-57%

-13%

-34%-45%

-24%

-12%

3%

-34%

-48%

-44%

16%

-57%

-66%

-27%

-13%

-44%

-28%

-49%

-17%

-44%

37%

-24%

-54%

27%

-40%

-18%

-59%

-8%-7%

-2%

-34%

46%

5%

-32%

-30%

-44%

-21%

-34%

-37%

-33%-60%

-30%

-40%-22%

-35%

18%

-51%

-11% -39%

-38%

-33% -36%

-10%-57% -25%

-58%

-45%-56% -44%-36%-17% -62%

26%

-34%-39%

-31%

-44%

-52%

10% 0%

-11%

-37%

-36%16%-60% -45%-29%

-41%

-22% -49%18%

-80%

CLAYTONFAYETTE

CHICKASAWFLOYDCERRO GORDOHANCOCK

WRIGHT FRANKLIN BUTLER BREMER

DUBUQUEDELAWAREBUCHANANBLACK HAWKGRUNDYHARDINHAMILTON

WEBSTER

HUMBOLDTPOCAHONTAS

PALO ALTOCLAY

BUENA VISTA

CALHOUNSACIDA

WOODBURY

PLYMOUTH

SIOUX O'BRIEN

CHEROKEE

MONONA CRAWFORD CARROLL GREENE BOONE STORY MARSHALL

TAMA BENTON LINN JONES JACKSON

CLINTON

SCOTT

CEDAR

MUSCATINE

LOUISA

DES MOINES

HENRY

LEE

JEFFERSON

VAN BURENDAVIS

WAPELLO

KEOKUK

IOWA JOHNSONPOWESHIEKJASPERPOLKDALLASGUTHRIEAUDUBONSHELBYHARRISON

CASS ADAIR MADISON WARREN

LUCAS MONROE

APPANOOSE

MARION MAHASKA

WAYNEDECATUR

CLARKEUNION

RINGGOLDTAYLOR

ADAMSMONTGOMERY

PAGEFREMONT

POTTAWATTAMIE

MILLS

WASHINGTON

17 SurplusCounties

(32) 40%+LeakageCounties

Population Over 50,000 Share of Total Iowa Retail Market

34%

36%

38%

40%

42%

44%

46%

48%

76 78 80 82 84 86 88 90 92 94 96 98 '00

% Market Share

Fiscal Year

Population Over 5,000 to 10,000 Share of Total Iowa Retail Market

11%

12%

13%

14%

76 78 80 82 84 86 88 90 92 94 96 98 '00

% Market Share

Fiscal Year

Population 1,000 to 2,500 Share of Total Iowa Retail Market

5%

6%

7%

8%

9%

10%

76 78 80 82 84 86 88 90 92 94 96 98 '00

% Market Share

Fiscal Year

Jewell’s Sales Have Declined by 80% Since 1976

Memorabilia of a By-gone Era

EVENTS THAT CAUSED BIG CHANGES IN IOWA RETAIL

Population Changes

Rural PopulationIowa

1940 1950 1960 1970 1980 1990 20000

500

1000

1500

2000Thousands

Country Place Farm

Iowa’s Rural Population

Source: Dr. Willis Goudy, Census Services

Urban PopulationIowa

1940 1950 1960 1970 1980 1990 20000

500

1000

1500

2000Thousands

Urban PopulationIowa

1940 1950 1960 1970 1980 1990 20000

0.5

1

1.5

2Millions

50,000+ 10,000-49,999 2,500-9,999

Shopping Malls

Coral Ridge Mall-1.2 Million Square Feet, Approx. $250 Mil Per Year

Tanger Factory Outlet Mall-Approx. $100 Mil Per Year

North Grand Mall in Ames, 351,000 Square Feet

Discount Department Stores

SUPER TARGET STORE IN ANKENY, IOWA, 240,000 SQUARE FEET

Wal*Mart Supercenter, 220,000 Sq. Ft., Ankeny, IA

BIG K MART AT AMES, IOWA

Big-Box Building Materials Stores

MENARD’S HOME IMPROVEMENT STORE IN ANKENY, IA

HOME DEPOT AT ANKENY, IOWA

LOWE’S HOME IMPROVEMENT AT AMES, IA

Ever Bigger Grocery Stores

CUB Food Store, Ames, IA, 65,000 Square Feet

HY VEE FOOD STORE LOCATED AT SITE OFFORMER K MART, 70,000 Square Feet

WHY IS RETAIL IMPORTANT?

The Multiplier Concept of Local Respending Patterns

Initial $1.00

of exports 40¢

respent locally

16¢ respent locally

6¢ respent locally

60¢ leakage

24¢ leakage

10¢ leakage

3¢ leakage

3¢ respent locally

2¢ leakage

1¢ respent locally

Initial impact: $1.00

$1.00 .40 .16 .06 .03 .02Full impact: $1.66

Trends of Different Types of Retail Businesses

DECLINING BUSINESSES

Men’s Apparel StoresChange 1976 to 1998

-76.9%

-66.6%

-30.8%

-100% -80% -60% -40% -20% 0%

Change in Sales PerFirm

Change in Numberof Firms

Change in TotalSales

Figures have been adjusted for inflation.

-209

Iowa Clothing StoresChange 1976 to 2002

-13.6%

-12.6%

-1.1%

-20% 0%





-178

Iowa Drug StoresChange 1976 to 2002

-32.8%

-1.8%

-31.5%

-40% -20% 0%





-12

CONSOLIDATING BUSINESSES

Iowa Department StoresChange 1976 to 2002

89.0%

-21.9%

142.0%

-80% -40% 0% 40% 80% 120% 160%





-74

Iowa Grocery StoresChange 1976 to 2002

-18.7%

-50.3%

63.4%

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100%





-965

Iowa Shoe StoresChange 1976 to 2002

-38.9%

-45.1%

11.4%

-60% -40% -20% 0% 20%





-208

Iowa Hardware StoresChange 1976 to 2002

-44.5%

-49.2%

9.3%

-60% -40% -20% 0% 20%





-451

SATURATED BUSINESSES

Iowa Used Merchandise StoresChange 1976 to 2002

2.5%

104.0%

-49.8%

-80% -40% 0% 40% 80% 120%





+1,085

Iowa Hobby, Toy, Craft StoresChange 1976 to 2002

439.0%

907.0%

-46.6%

-300% -100% 100% 300% 500% 700% 900% 1100%





+3,178

Iowa FloristsChange 1976 to 2002

-10.6%

52.4%

-41.3%

-60% -40% -20% 0% 20% 40% 60% 80%





+178

Iowa Jewelry StoresChange 1976 to 2002

-23.2%

6.5%

-27.8%

-40% -20% 0% 20%





+29

Iowa Photo StudiosChange 1976 to 2002

81.2%

148.7%

-27.1%

-60% -20% 20% 60% 100% 140% 180%





+531

Iowa Auto Parts StoresChange 1976 to 2002

27.9%

63.9%

-22.0%

-40% -20% 0% 20% 40% 60% 80%





+539

Iowa Gift & Novelty StoresChange 1976 to 2002

90.7%

133.8%

-18.4%

-60% -20% 20% 60% 100% 140% 180%





+625

Iowa Book & Stationery StoresChange 1976 to 2002

71.8%

99.7%

-14.0%

-40% -20% 0% 20% 40% 60% 80% 100% 120%





+248

GROWING BUSINESSES

Iowa Building Maintenance FirmsChange 1976 to 2002

1648.0%

1227.0%

31.7%

0% 400% 800% 1200% 1600% 2000%





+1,028

Iowa Auto Repair & Service FirmsChange 1976 to 2002

66.6%

41.2%

18.0%

0% 20% 40% 60% 80%





+1,338

Iowa Beauty & Barber ShopsChange 1976 to 2002

20.1%

6.8%

12.5%

0% 10% 20% 30%





+358

Iowa Eating & Drinking PlacesChange 1976 to 2002

24.6%

12.8%

10.5%

0% 10% 20% 30%





+751

Winners and Losers for Small Towns

GROWING BUSINESSES IN IOWA TOWNSPopulation 1,000-2,499, 1987-1997

177.5

156

150

108.6

100

94

90.8

87.5

84.3

76.3

Hobby, Toy, Craft Stores

Veterinary Services

Music Stores

Cleaning & Maintenance

Equip. Rental & Leasing

Sporting Goods

General Construction

Book Stores

Used Merchandise

Plumbing & AC Sales

Type of Business

0 50 100 150 200

Percent Change

DECLINING BUSINESSES IN IOWA TOWNSPopulation1,000-2,499, 1987-1997

-47.6

-46.7

-37.5

-36.7

-35.7

-29.1

-23.8

-23.6

-22.2

-20

Variety Stores

Dry Cleaning Plants

Gasoline Stations

Women's Clothing Stores

Department Stores

Radio & TV Repair

Barber Shops

Grocery Stores

Shoe Stores

Hardware Stores

Type of Business

0-10-20-30-40-50-60

Percent Change

THRESHOLD LEVELS FOR SELECTED BUSINESSES IN IOWA, 2001

363

705

1,124

1,585

2,941

3,399

3,595

4,127

4,186

4,394

4,910

5,449

10,377

11,566

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000

RESTAURANTS, TAVERNS, & BARS

USED MERCHANDISE STORES

SPORTING GOODS & BICYCLE SHOPS

LAWN, GARDEN, TREE, & LANDSCAPE SERVICE

GROCERY STORES

LUMBER & BUILDING MATERIALS DEALERS

FLORISTS

FURNITURE STORES

JEWELRY STORES

RETAIL NURSERIES, LAWN & GARDEN SUPPLY

DRUG STORES

HARDWARE STORES

SHOE STORES

DEPARTMENT STORES

ANOTHER MAJOR PROBLEM

2. Regional Inequities in Jobs

Iowa Per Capita Personal Income

$18,000

$20,000

$22,000

$24,000

$26,000

$28,000

$30,000

1980 1985 1990 1995 2000

US IowaNW NECentral SWSE

Source: Bureau of Economic Analysis

Iowa Average Earnings Per Job

$20,000

$22,000

$24,000

$26,000

$28,000

$30,000

$32,000

$34,000

$36,000

1980 1985 1990 1995 2000

U.S. IowaNW NECentral SWSE


Average Wage Per Job, 2000

$20,969

$24,564

$25,873

$24,702$21,648

$21,570

$20,231

$29,418

$21,969 $33,426

$26,018

$22,174

$20,337

$22,432

$22,633$19,231

$19,728

$25,148

$27,893

$18,477

$20,621

$19,337

$26,590

$21,724

$21,088

$25,716

$22,178

$20,021

$29,220

$26,930

$22,645

$23,405

$33,106

$24,872

$21,914

$24,654

$23,049

$21,434

$20,013

$26,175$25,824

$26,810

$25,577

$23,642

$21,341

$24,433

$22,142

$19,126

$22,027

$19,612

$22,309

$21,422$19,015

$22,134

$20,206$19,561

$21,277

$26,973

$25,713

$21,480 $21,176

$20,469

$22,185 $22,987

$26,219$18,718 $21,344

$24,461

$17,431$18,444 $21,316$23,352$24,732 $20,883

$28,414

$22,657$21,566

$22,875

$26,818

$19,624

$24,078 $27,978

$30,934

$23,678

$25,859$22,087$23,166 $22,368$22,088

$24,776

$20,583

$22,451$22,349$27,665

$19,724

$22,196

$22,368$21,169 $23,518LYON

SIOUX

PLYMOUTH

WOODBURY

MONONA

HARRISON

POTTAWATTAMIE

MILLS

FREMONT PAGE TAYLOR RINGGOLD DECATUR WAYNE APPANOOSE DAVIS VAN BUREN

LEE

DES MOINES

HENRYJEFFERSONWAPELLOMONROELUCASCLARKEUNIONADAMSMONTGOMERY

CASS ADAIR MADISON WARREN MARION MAHASKA KEOKUK WASHINGTON

LOUISA

MUSCATINE

SCOTT

CLINTON

JACKSONJONES

CEDAR

LINN

JOHNSON

BENTON

IOWA

TAMA

POWESHIEKJASPER

MARSHALLSTORY

POLKDALLAS

BOONEGREENE

GUTHRIEAUDUBON

CARROLLCRAWFORD

SHELBY

IDA SAC

CHEROKEE BUENA VISTA POCAHONTAS HUMBOLDT

KOSSUTH

CALHOUN

WEBSTER

HAMILTON HARDIN GRUNDY

BLACK HAWK BUCHANAN DELAWARE DUBUQUE

CLAYTON

ALLAMAKEEWINNESHIEK

FAYETTE

HOWARDMITCHELLWORTHWINNEBAGO

HANCOCK CERRO GORDOFLOYD CHICKASAW

BREMERBUTLER

FRANKLINWRIGHT

EMMET

PALO ALTO

DICKINSON

CLAY

OSCEOLA

O'BRIEN

2000 Average Wage Per Job75% of state average or below

Less than state average (at least 75% of state average)Greater than state average

Average Manufacturing Earnings Per Employee (in 2000 Constant Dollars)

$50,161

$43,813 $43,346

$42,695

$40,112

$46,705

$35,000

$37,000

$39,000

$41,000

$43,000

$45,000

$47,000

$49,000

$51,000

1980 1985 1990 1995 2000

U.S.Plains Iowa


Iowa Average Manufacturing Earnings Per Employee (in 2000 Constant Dollars)

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

1980 1985 1990 1995 2000



Government Earnings as a Percent of Total Earnings, 1980-2000

15.5%

17.9%

16.6%

15.2%15.2%

15.9%

12%

13%

14%

15%

16%

17%

18%

19%

1980 1985 1990 1995 2000

U.S.Plains Iowa


Iowa Government Earnings as a Percent of Total Earnings, 1980-2000

10%

12%

14%

16%

18%

20%

1980 1985 1990 1995 2000



Average Net Farm Proprietor’s Income(in 2000 Constant Dollars)

$14,385

$10,972

$2,067

$13,571

$5,899

$20,591

$0

$5,000

$10,000

$15,000

$20,000

$25,000

1980 1985 1990 1995 2000

U.S.Plains Iowa


Iowa Average Net Farm Proprietor’s Income (in 2000 Constant Dollars)

-$5,000

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

1980 1985 1990 1995 2000

U.S. Iowa NWNE Central SWSE


2000 Farm Payments Per Capita

$3,080

$462

$303

$1,310$1,479

$1,302

$1,709

$795

$1,775 $131

$826

$1,389

$1,786

$1,338

$1,778$2,626

$1,078

$764

$175

$941

$3,456

$1,718

$270

$1,794

$2,142

$1,242

$1,300

$2,246

$465

$566

$1,536

$2,834

$45

$2,162

$381

$650

$1,485

$1,244

$1,782

$671$354

$1,452

$942

$1,516

$1,262

$1,714

$1,776

$2,147

$1,181

$2,178

$2,615

$1,838$2,521

$2,569

$2,723$1,907

$1,266

$193

$2,579

$1,715 $905

$2,139

$1,464 $1,933

$378$1,875 $556

$2,228

$969$2,096 $1,215$1,089$2,415 $1,272

$129

$2,099$2,086

$2,274

$879

$2,875

$334 $904

$429

$1,024

$918$824$1,053 $783$937

$2,410

$2,476

$1,320$2,911$318

$1,939

$1,281

$927$2,914 $1,881LYON

SIOUX

PLYMOUTH

WOODBURY

MONONA

HARRISON

POTTAWATTAMIE

MILLS

FREMONT PAGE TAYLOR RINGGOLD DECATUR WAYNE APPANOOSE DAVIS VAN BUREN

LEE

DES MOINES

HENRYJEFFERSONWAPELLOMONROELUCASCLARKEUNIONADAMSMONTGOMERY

CASS ADAIR MADISON WARREN MARION MAHASKA KEOKUK WASHINGTON

LOUISA

MUSCATINE

SCOTT

CLINTON

JACKSONJONES

CEDAR

LINN

JOHNSON

BENTON

IOWA

TAMA

POWESHIEKJASPER

MARSHALLSTORY

POLKDALLAS

BOONEGREENE

GUTHRIEAUDUBON

CARROLLCRAWFORD

SHELBY

IDA SAC

CHEROKEE BUENA VISTA POCAHONTAS HUMBOLDT

KOSSUTH

CALHOUN

WEBSTER

HAMILTON HARDIN GRUNDY

BLACK HAWK BUCHANAN DELAWARE DUBUQUE

CLAYTON

ALLAMAKEEWINNESHIEK

FAYETTE

HOWARDMITCHELLWORTHWINNEBAGO

HANCOCK CERRO GORDOFLOYD CHICKASAW

BREMERBUTLER

FRANKLINWRIGHT

EMMET

PALO ALTO

DICKINSON

CLAY

OSCEOLA

O'BRIEN

2000 Farm Payments Per CapitaLess than state per capitaGreater than state per capitaMore than twice state per capita

FUTURE FOR RURAL IOWA

• As global economy expands, perhaps ag will become truly profitable and less dependent on government payments

• Improvements in telecommunications (Internet) will expand markets for rural prople.

FUTURE FOR RURAL IOWA(Continued)

• Rural Iowa will have to come to grips with excess government. Will have to consolidate schools, court houses and other services.

• Local jurisdictions will have to pool resources with others and work as regions.


• Rural Iowa will have to continue to develop and promote its recreational and tourism strengths.

• Rural Iowa will have to vigorously promote and recruit younger families from urban areas on the basis of a better quality of life.


• Rural Iowa must capitalize on the benefits of technology. High speed internet should be omnipresent. Rural Iowans should be able to communicate with the world in the most modern way possible.

• We’ve got to find some way to attract and retail young people in order to reinvigorate the state.

FOR ADDITIONAL INFORMATION

Contact: Kenneth E. StoneProfessor Emeritus of

Economics2208 Van Buren Av.Ames, IA 50010

Phone: (515) 232-7766Fax: (515) 232-4127E-mail: [email protected]: www.econ.iastate.edu/retail

future for rural iowa presented at 77 th annual soil management and land valuation conference may...

Documents

iowa grocery storeschange

iowa clothing storeschange

iowa drug storeschange

iowa shoe storeschange

iowa hardware storeschange

iowa jewelry storeschange

iowa hobby

iowa floristschange