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Economic hardship is now widespread. Is that a good thing?

Dante Chinni

Posted: 11.18.2009 / 8:49 AM PST

As we travel around Patchwork Nation and talk about the good news in the national economy – GDP growth, the improving Dow – we are often met with skepticism. Regardless of what headlines say, many people have yet to sense a turnaround locally.This month’s Economic Hardship Index shows how complicated the national economic picture can be.

Overall, this month’s average is 34.3 – 12 points higher than last month’s, with higher scores equaling more hardship. Scores are up across the board, and in some community types, the scores are up significantly. But they are being driven by particularly hard times in a few specific locales.

“The distance between high and low places grew wider on unemployment. So the lowest place may be around 1.5 [percent], but the highest places went from 28 percent to 30 percent,” says James Gimpel, a professor at the University of Maryland and consultant to the Patchwork Nation project. “Unemployment seems to be hitting the South pretty hard: Georgia, South Carolina, Alabama, Tennessee – these are right up there with Michigan,” which leads the nation.

Yet the bigger story this month may be that the disparity among the hardship scores of our 12 community types is shrinking. In other words, all the community types – be they the wealthy “Monied ’Burbs” or the Latino-heavy “Immigrant Nation” counties – are increasingly feeling similar levels of hardship, though perhaps for different reasons.

The hardship scores measure short-term changes in unemployment, foreclosures, and gasoline prices, combined with basic demographic data.

Good signs or bad signs?

Even though the hardship numbers are up again this month, there may be some good news in the scores. The evening out in the data may suggest that the hardest times are behind the country.

For months some community types, like the small-town “Service Worker Centers,” stood out from the pack with their high scores. But the rest of the types have caught up to them. We’ve noticed this a few times over the past few months – most recently September. Perhaps the continued flattening means the economic trouble has essentially bottomed out.

The proviso, of course, is the increase in bad scores across the board – pushed forward by the places that are really struggling. This one-month uptick is not necessarily cause for alarm. But if it becomes two or three months in row, the trend would be of more concern. It would suggest that the number of truly struggling locales within each community type is growing.

Differences remain

And even though our 12 community types may, on average, be feeling more alike, the hardship still takes on different forms across community types.

Double-digit increases in foreclosures between August and October characterized the “Monied ’Burbs,” the socially conservative “Evangelical Epicenters,” the growing, diversifying “Boom Towns,” the “Military Bastions” near bases, and the “Immigration Nation” counties.

The big-city “Industrial Metropolis” and African-American heavy “Minority Central” communities still have unemployment numbers in the double digits.

Meanwhile, even as unemployment and foreclosures are both low in rural agricultural “Tractor Country” counties, the lower incomes there mean their scores are higher. And some “Tractor Country” communities are hurting in other ways. Grain prices have fallen, and dairy farmers are taking a hit.

One Patchwork Nation blogger in Ronan, Mont., a “Tractor Country” community, wrote about the closing of a lumber mill that meant 100 jobs lost in a community of only about 2,000.

While the evening of hardship scores may be a good sign, the real test will come in the next few months: Do the numbers start to drop?