ARC economic map

Courtesy of Appalachia Regional Commission

The Appalachian Regional Commission uses an index-based county economic classification system to identify and monitor the economic status of counties in Appalachia.

A new report shows that residents of Appalachia Pennsylvania counties made an estimated $7,076 less in 2017 than the per capita market income for Pennsylvania.

In 2017, the per capita market income (PMC) for Appalachian Pennsylvania was $36,093, while Pennsylvania’s PCM was $43,169, according to the report from the Appalachian Regional Commission (ARC). Per capita market income is a measure of an area’s total personal income, less transfer payments, divided by the resident population of the area.

The ARC used an index-based county economic classification system to identify and monitor economic statuses of Appalachian counties.

The system compared each county’s averages with national averages. ARC looked at three economic indicators: three-year average unemployment rate, per capita market income and poverty rate.

“The resulting values are summed and averaged to create a composite index value for each county,” the report said. “Each county in the nation is then ranked, based on its composite index value, with higher values indicating higher levels of distress.”

After the data is collected, each county is classified into one of five economic designations: distressed (dark red); at-risk (light red); transitional (white); competitive (light blue) and attainment (dark blue).

According to ARC’s County Economic Status Designations for Fiscal Year 2020, 80 counties will be considered distressed (ranking among the worst 10 percent of counties in the nation) and 110 counties will be at-risk (ranking between the worst 10 to 25 percent of counties in the nation).

Forest County is the only county in the state that is considered distressed. Fayette County will be ranked at-risk for fiscal year 2020. Washington and Greene County were ranked as transitional.

Forest County’s PCM was $12,458 – $30,711 less than the state average. The poverty rate in Forest is at 14.1 percent. In Fayette, the PCM was $27,345 and the poverty level is at 18.8 percent. Both county’s unemployment rate from 2015 to 2017 were among the highest in the state – at 7.5 percent.

China Riddle, a communications specialist for ARC, said Forest County is considered distressed because the county worsened on all three of ARC’s economic indicators during the past year.

“Per capita market income worsened from $15,440 (38 percent of the national average) in 2016 to $12,458 (29.1 percent of U.S.) in 2017, which is a decline of 19.3 percent,” Riddle said. “The poverty rate of Forest County worsened from 12.7 percent to 14.1 percent between the last two non-overlapping five-year periods, causing its rate relative to the national average to worsen from 84.3 percent to 96.7 percent. All three of these factors combined caused the shift into the distressed category for FY 2020.”

Riddle said that although Fayette County’s income and unemployment rate improved, other U.S. counties improved at greater rates, causing Fayette to slip into the at-risk economic category.

“Relative to the national average, Fayette County worsened on all three of ARC’s economic indicators in the past year,” Riddle said. “While the county’s per capita market income improved by 3.2 percent from $26,487 in 2016 to $27,345 in 2017, the national average improved at a greater rate (5.4 percent), causing the county’s value relative to the national average to worsen from 65.1 percent to 63.8 percent of the U.S. rate.”

Bob Shark, executive director for the Fay-Penn Economic Development Council for Fayette County, said Fayette will be considered transitional when the ARC releases economic status designations in the upcoming years.

“There’s a lot of activity going on in Fayette,” Shark said. “Recently there’s been a lot of growth with our businesses and it probably hasn’t shown in the reports because those are taking numbers from 2017. Fayette will be considered transitional when the next report comes around again.”

The majority of Appalachia Pennsylvania was considered transitional, which ranks the county between worst 25 and best 25 percent of counties in the nation. Four counties ranked as competitive: Allegheny, Butler, Montour and Perry. This means they were ranked between best 25 and best 10 percent of counties in the nation.

The ARC report also found that fiscal year 2020 will have the lowest number of designated distressed counties in Appalachia since 2008. Twenty-nine counties across eight states experienced positive shifts in economic status since 2019, and 18 counties will experience negative shifts in economic status, primarily coal-impacted counties in Ohio, West Virginia and Pennsylvania.

“Parts of the Appalachian Region face significant economic challenges compared to the rest of the country, and by releasing this data publicly in an accessible format, ARC is seeking to ensure awareness of these challenges, and to inform policymakers at all levels,” said ARC Federal Co-Chair Tim Thomas. “ARC and our state partners use this data to direct critical investments toward distressed areas, and I am pleased to see net improvements in many parts of the region compared to previous years.”

Only three counties in Appalachia were considered in the highest ranking. Bath County, Va.; Forsyth County, Ga.; and Shelby County, Ala., were ranked as attainment counties.

Of the 67 counties of Pennsylvania, there are 52 counties that contribute to the 420 counties in Appalachia. The 15 counties not in Appalachia are in the lower corner of the state.