Between 2001 and 2018, the economic health of 2,375 counties increased while 717 counties experienced a decline during the same period. These are the key findings from the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) report released in December and based on a survey of gross domestic product (GDP) for the nation’s 3,113 counties during the first decade and a half of the 21st century.
The GDP, or the value of goods and services produced within a county, varies as greatly as the county sizes in the U.S. The total level of Real GDP in 2018 ranged from Issaquena County, Miss., at $18.4 million to Los Angeles County’s $710.9 billion.
Only 21 counties, 20 of which had population size of less than 10,000, didn’t experience any change in GDP. Overall, the report found that the small counties, in fact, were the ones to experience the most change: 1,806 increased and 682 decreased in 2,488 of the 2,508 small counties.
The report also highlighted that the mining, quarrying, and oil and gas extraction (MQOG) industry was a leading contributor to economic change. The MQOG industry was the leading contributor to GDP decline in the large, medium and small country categories. In the medium county category (counties with populations between 100,000 and 500,000) the MQOG industry was the leading contributor for both the fastest growing county, Canadian County, Okla. (21 percent), and the county with largest percent decrease, San Juan County, N.M. (-6.1 percent). In the large county category (counties with populations greater than 500,000), the IT industry contributed the fastest economic growth in Santa Clara County, Calif. (10.2 percent).
The BEA’s report is extensive in its coverage and builds upon prototype data that was produced in December 2018, including new source data, expanding industry details and personal income estimates to provide a clearer understanding of county health.
The report is a good place to begin but it cannot be the end of the analysis, according to Peter Temin, Elisha Gray II Professor Emeritus of Economics at MIT. The data presents the information as a blanketed look at the entire country, but the problem is that “nothing is exactly the same around the country,” he said.
Temin also explained that the report “deals with things that they can easily observe,” but it fails to represent the human involvement in the numbers, which need to be corroborated by the financial, human and social capitals before they can yield insights. “It means that our growth track is much less than it seems to be” based on an initial review of the BEA report, he added. “You’re missing the other dimensions of what’s going on in the United States … you get a very partial picture when you look at the report.”
Teryn Zmuda, director of research at the National Association of Counties (NACo), also expressed concern about using this information to blanket all U.S. counties. She explained that “Grant County, N.D. … had a 44 percent decrease in GDP but […] the population itself decreased, so that’s going to have an impact on your overall economy as well.”
Especially within small counties, this human capital must be considered to have a full picture of the true economic health because a county’s strength can be measured through its capitals, Zmuda said. For example, even if the BEA numbers are low, if the county has a strong social capital then the low numbers may not be cause for alarm.
Zmuda emphasized the resiliency factor and explained that “Whether [it] be a recession or just a more stagnant growth period, preparing our counties to be resilient in that period of time” is how counties can ensure future health.
So how do local, county, state officials and leaders implement the information to better their locality’s future? By taking BEA’s report and “continuing a more detailed look into those industries once you’ve identified trends in the overall economy,” Zmuda said.
To account for the broad range of county diversity across the nation, the personal capitals and familiarity must be incorporated into the plan because, “if a local person sees it and looks at his or her state, then that person has much more information about what’s going on,” than someone who simply looks at the raw numbers, said Temin. The BEA’s report was a necessary first step, but now counties and states can continue a path toward thoughtful, impactful legislation to better assure our counties’, states’ and country’s health.