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Analysis shows rural Minnesota living does cost less

An analysis of economic data undertaken by the Center for Rural Policy and Development found that while wages are lower in rural areas, a lower cost of living provides an advantage when compared to the metropolitan area.

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Lower costs for housing, a slower pace of life, and safety and security are the primary motives leading to the "brain gain" of people age 20 to 60 moving to rural areas in Minnesota, according to research by Ben Winchester, a rural sociologist with the University of Minnesota Extension. A quiet residential street in Benson is shown above. Tom Cherveny / West Central Tribune

WILLMAR — Wages in rural Minnesota may lag behind those in the metropolitan area, but they do go farther.

When wages are compared to the cost of living, some rural areas of the state actually enjoy an advantage over the Twin Cities metropolitan area, where living costs are much higher.

These are the findings released during a webinar hosted Wednesday by the Center for Rural Policy and Development in St. Peter. The center worked with Ben Winchester , rural sociologist with University of Minnesota Extension, to analyze economic data from the Minnesota Department of Employment and Economic Development on median wages and living costs in the regions of the state.

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Ben Winchester, rural sociologist with University of Minnesota Extension

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The results provided the evidence for what a lot of people have been feeling, said Kelly Asche , research associate with the center. “Yeah I’m getting paid less out here, but it just feels like things are cheaper, it’s not as hard to make ends meet. (The) data shows yeah, that’s true,” said Asche on the webinar.

He was joined by Winchester, who has previously documented that many rural areas are enjoying what he terms a “brain gain.” While many young people leave rural communities after completing school, many rural areas are seeing an influx of people age 20 to 60. They are attracted to rural areas for the simpler pace of life, safety and security, and lower housing costs, his previous research showed.

Housing costs are a major component in making possible the lower cost of living in rural areas. Housing costs are 33 percent lower in Greater Minnesota as compared to the metropolitan area, according to Asche.

Taxes and the costs for child care are the other areas where rural areas have a significant advantage over the metropolitan area.

Food and health care are generally more expensive in rural areas, according to the study.

The study was based on median wages and living costs for a hypothetical family of three, with two adults and a child, and one working full time and the other part time. The analysis found that no matter where such a family lived, in most occupations, wages fell below the true cost of living if both adults were not working full time. It takes two full-time wage earners to make ends meet in rural areas as well as the metro area.

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The Inflation Reduction Act includes $9.7 billion in clean energy funding for rural electric cooperatives. Wind turbines in the Palmer's Creek Wind Farm north of Granite Falls are shown.
Live wide open: Rural areas in west central in Minnesota are promoting their open spaces, slower pace of life and safety as attractions to recruit new workers. Wind turbines in the Palmer's Creek Wind Farm north of Granite Falls are shown. Tom Cherveny / West Central Tribune
Tom Cherveny / West Central Tribune file photo

Not surprisingly, the study also found regions where lower-paying occupations are concentrated do not fare so well in the comparison. Areas in central and northeast Minnesota, where tourism and service industries comprise a larger share of the economy, lag behind the metropolitan area in the wages versus cost of living analysis.

The study was undertaken prior to the COVID-19 pandemic, during a period when the labor market throughout Minnesota was tight, Asche and Winchester pointed out. They hope the data will help rural areas in their efforts to recruit workers.

Along with the economic analysis, Winchester is analyzing a survey sent to new residents in rural counties. Among the findings he pointed out was the response of those who moved to rural locations for their jobs. Most said they made the move for jobs that better matched their skills, meaning that even if they took a cut in pay, they saw the move as a step upward in their careers.

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