Moving Apart: How Non-College Workers Fare in Urban and Rural America

A worker’s educational degree, or lack thereof, drives their economic circumstances—from how much they make to what time they show up to work.¹ But so does where they live. Workers without a degree in cities face different challenges from their non-college counterparts in rural areas. In urban places, economic growth has hollowed out middle-class work, leaving fewer good quality jobs available for those without a four-year degree. In rural areas, declining industries and decades of underinvestment have led to a plight of opportunity and a skills mismatch for many non-college workers.

Across both rural and urban America, there are 109 million working-age adults without a four-year degree.² Below, we unpack how the urban-rural divide is impacting their lives.

Urban Non-College: Driven Down and Driven Out

For decades, workers flocked to cities for good jobs and expansive opportunities. But the economic promise cities once offered has eroded for those without a college degree. Today’s urban non-college workforce is economically worse off than they were in years past. There are a few big reasons why:

Diverging Urban Wage Benefit

Traditionally, urban workers both with and without degrees have earned more than their rural counterparts in the same field of work. Both a lawyer and a janitor living in New York City expect to see higher earnings than their counterparts in rural Ohio.³ But the extra earnings urban non-college workers enjoy over their rural counterparts (also called a wage premium) has steadily been disappearing.⁴ Between 2011 and 2021, the urban wage premium for non-college workers shrank by 11%, from $3,900 to $3,400, while it grew by 19%, from around $8,200 to $9,700, for college workers.⁵

Driven Into Lower-Skill Work

The decline in urban wage premiums is largely caused by a dramatic shift in what jobs are available, according to MIT economist David Autor.⁶ Forty years ago, non-college workers were roughly split between middle-skill jobs (e.g. a factory worker or office administrator, which usually require some sort of credential or training) and lower-skill jobs (which, at most, require a high school degree).⁷ Urban areas were much more likely to have middle-skill work than suburban or rural places, but economic and technological changes shrunk many of the middle-skill occupations core to urban areas.⁸ Factory jobs became more automated, office work that used to be done by clerical workers went online, and some labor-intensive jobs were sent overseas.⁹

Urban college workers in middle-skill jobs were safer from these changes, with many finding opportunity in high-skill industries.¹⁰ But the opposite happened for non-college workers—they overwhelmingly got pushed down the occupational ladder into lower-skilled work.¹¹ This polarization of jobs into high-skill and low-skill work also impacted non-college women and men differently. As middle-skill jobs disappeared, women without a degree were more likely to pursue education and shift into high-skill jobs than their male counterparts.¹²

Autor’s findings that jobs in large cities are increasingly skewed towards either high-skill or low-skill work is further supported by recent census data. In the country’s largest metro areas, the number of workers employed in industries like computer science, mathematics, business, and finance greatly increased between 2011 and 2021, while employment in certain service sector work, such as food preparation, saw moderate increases. At the same time office and administrative jobs, which have historically made up a significant portion of middle-skill work in cities, notably declined.¹³ And while COVID-19 greatly impacted workers in the services sectors, as well as office occupations, data shows that declines in administrative work was happening before the pandemic even started.¹⁴ 

Can’t Afford Cities—Especially Big Ones

Today, the average median annual earnings for all urban non-college workers is $36,000–much less than the $60,500 for college-educated workers.¹⁵ Non-college workers are also three times more likely to live in poverty.¹⁶

Lower incomes and rising prices mean over the last decade many urban workers without a college degree saw their earnings decline when accounting for inflation. Almost 50% of the population over 25 in America’s largest cities have a high school diploma but no bachelor’s degree. This group is also more likely to be seeing real declines in earnings.¹⁷ Between 2011 and 2021 workers with just a high school diploma saw their real annual earnings decrease on average by almost 2%, from $36,400 to $35,800, while for workers who have some college courses or an associate’s degree under their belt, earnings actually declined almost 6% from $46,300 to $43,600.¹⁸

Interestingly during this same period of time workers in big cities who did not graduate high school saw significant increases in earnings, from $25,300 to $28,200. One possible explanation for this trend may be the historic gains low-income workers, especially those in the services sectors, have made in the COVID economy.¹⁹ Over this same period, workers with a four-year degree saw their earnings mostly keeping up with inflation. Considering workers with graduate degrees can expect to earn around $88,000, a few hundred dollar decline in real earnings is much less significant than it is for workers with only a high school degree who are earning less than half that.²⁰

This means that bigger, and more expensive, cities remain increasingly unaffordable for many non-college workers. Analysis found that workers with a college-degree enjoy a similar standard of living across most major cities—but for non-college workers, big cities actually mean a worse quality of life.²¹ Even though San Francisco is a more expensive place to live than Cleveland, the higher incomes allow college workers to maintain a similar type of living, yet for non-college workers earnings are often too low to overcome bigger costs.²²

Rising housing prices are a big driver of cities’ unaffordability for non-college workers.²³ Previously, both a lawyer and a janitor in New York City would earn more than their counterparts in the rural South, even when accounting for the higher housing costs one finds in cities. Today that is no longer true. The New York lawyer still earns more, but for the janitor, they now actually make less than their rural counterpart.²⁴

The rising costs of housing and everyday goods, alongside fewer options for good-paying jobs, means many without a degree are opting to leave urban areas, either to face long commutes back to the city for work or to not return at all. Since 1980, while college-educated workers have been moving into urban areas, non-college workers are moving out.²⁵ New research also finds that an increasing number of college-educated workers are following non-college workers in leaving the countries’ biggest cities. They are doing so in favor of more affordable mid-sized urban places, which often now offer similar opportunities at a lower cost of living.²⁶

Heavier Burden on People of Color

Non-college America is notably diverse, especially compared to the college-educated workforce. Forty-six percent of the non-college workforce are people of color, and there are three times as many Black and Hispanic individuals without a degree than with one.²⁷ One result of this: the hollowing out of middle-skill jobs, and the poor economic outcomes it causes, has fallen heavily on workers of color.

Between 1980 and 2015, employment in middle-wage jobs declined for white urban non-college workers by 7%, but it dropped 12% and 15% for Black and Hispanic workers respectively.²⁸ This decrease was accompanied by a corresponding increase in employment in low-paying jobs.²⁹ This shift to low-wage work depressed the earnings of non-college workers of color in urban areas—non-college Hispanic workers saw their wage premium in real terms decline by around 6% and non-college Black workers by 14%.³⁰

The physical change in where jobs were located also had poor economic implications for Black urban workers. The movement of jobs from cities to suburbs between 1970 and 2000 was associated with substantial declines in Black employment rates compared to white employment rates.³¹ While there were many Black workers who moved from the cities to the suburbs and saw increased economic prosperity, those that remained in cities encountered substantially worse economic outcomes. Over the past 50 years, the real incomes of Black suburban workers increased compared to their white neighbors, but Black urban workers actually saw income losses–meaning they were earning comparatively less than before.³²

Rural Non-College: Farther from Work and Opportunity

While urban non-college workers find themselves driven down and out, in rural America there is a widening gulf between workers and economic opportunity. The increasing concentration of businesses and innovation in America’s cities, decades of underinvestment in rural places, and the decline of key industries has left rural Americans too far from the tools and opportunities they need to succeed and thrive. Below we unpack these trends.

Lag in Educational Attainment

Over the past 50 years, both urban and rural America have become increasingly educated. But it is happening in urban areas at a much faster pace. Since 1970, the number of adults with bachelor’s degrees increased 24 percentage points in urban counties, and just 14 percentage points in rural counties.³³ Today the percent of rural America with a college degree is about the same as the share of urban America with one in 1990.³⁴

In America’s most urban and rural counties, that gap is even wider. Adults living in America’s biggest cities are twice as likely to have a bachelor’s degree as those living in the country’s most remote rural areas.³⁵

This widening educational attainment gap is more layered than just a divide between America’s urban and rural places. Seventy percent of the counties that USDA categorizes as “rural low educational attainment counties” are in areas where Black and Hispanic individuals make up at least 20% of the population.³⁶ Lower educational attainment by communities of color across rural places means they are less likely to reap the economic rewards a college degree offers—rural college workers make 55% more than their non-college peers.³⁷

Opportunity Departs with the College-Educated

After graduating college, many young people from rural communities choose to move to urban centers instead of returning home.³⁸ The pull of opportunity for college graduates to cities has always been there, but the exodus from small towns accelerated as industries like manufacturing saw rapid decline, poverty rates climbed, and rural job growth after the Great Recession was much slower than in cities.³⁹ Meanwhile the growth of opportunity has concentrated in urban places—more rural counties than not have lost businesses in the last decade. And from 2012 to 2021, although the United States added almost 700,000 net new businesses, less than 1% of that growth occurred in rural counties.⁴⁰

As a result, the exodus of college-educated workers from rural places has further exacerbated the economic struggles of these communities. It increases social segregation, decreases economic growth and innovation, and hollows out resources.⁴¹ Without college workers creating businesses and jobs or increasing demand for services, there are even fewer opportunities for those without a degree.

The rise of remote work and the increased movement by workers from cities to rural places is a promising trend. But fostering opportunities for those with and without a four-year degree, and ensuring rural communities have the tools to do so, is essential to the vitality and prosperity of rural places and workers.⁴²

Industry Decline Leads to Labor Force Decline

While the disappearance of urban middle-skill jobs pushed non-college workers into poorer quality jobs, the decline of industries in rural America sent many out of the labor force altogether. Many sectors once key to rural America—such as agriculture, mining, and manufacturing—have dwindled in employment.⁴³ Simultaneously, decades of underinvestment in infrastructure made traveling far distances for a new job difficult, while a lack of access to broadband kept remote jobs or training programs out of workers’ reach.⁴⁴

And while many rural areas are seeing unemployment rates below pre-pandemic levels, there are still a lot of rural working-age adults who don’t have a job.⁴⁵ Rural working-age adults are currently 33% more likely to not have worked in the last year than their urban counterparts.⁴⁶ In rural counties where fewer than 20% of workers have a bachelor’s degree, one-in-four working-age adults did not work at all in the past year.⁴⁷

The map below shows rural places with a high concentration of adults ages 25 to 54 that did not work in the past year. The high number of prime-age adults out of work across Appalachia, the Black rural South, and tribal lands indicate that place, as well as race and ethnicity, greatly impact the economic outcomes for the rural non-college workforce. Workers across the Black rural South are at increased risk of losing jobs to automation, while Native American workers continue to lose out on remote jobs due to a lack of broadband.⁴⁸ Minority communities in rural areas also face job discrimination, high rates of poverty, and significant barriers to educational and economic opportunity.⁴⁹

Training Out of Reach

As employment dropped in manufacturing and agriculture, employment in new sectors such as health and social services increased at a national level.⁵⁰ But many rural workers don’t necessarily have access to this reallocation of work.⁵¹ Many skills training programs remain physically out of reach for rural workers–currently 41 million rural adults live over 25 miles away from the nearest institution of higher learning, while a third of rural workers said reliable access to internet or computer would inhibit them from pursuing a job training program.⁵² An uncertain job market and cost also prevent rural workers from pursuing more training.⁵³ Without easy access to training programs and the support to pursue them, many rural non-college workers remain out of the labor force or shunted into low-wage work.⁵⁴

The gap between the skills one has and the skills they need is holding workers and rural economies back from success. A study found over 80,000 middle-skill workers will be needed to fill available jobs in rural California, but only a quarter of nearby educational institutions grant the credentials such work requires.⁵⁵ And, by 2030, the manufacturing sector could see as many as 2.1 million unfilled positions, mainly because workers won’t hold the digital skills required to do the jobs.⁵⁶

Conclusion

Huge economic shifts over the past several decades have created significant challenges for the non-college workforce across rural and urban communities. The disappearance of middle-skill jobs in both blue and white-collar industries meant many urban non-college workers ended up in lower paying work. Meanwhile, the decline of industries core to much of rural America’s economy left workers without jobs or skills they needed to succeed. And the continued political treatment of rural America as synonymous with agricultural meant there was a growing divide between the support rural places needed and what they got.⁵⁷

To be sure, the big investments made in both urban and rural America’s economy in the bipartisan infrastructure law, Inflation Reduction Act and CHIPS are critically important in efforts to lift up America’s non-college workforce. But without a clear focus on how to best train workers to meet heightened demand, workers without a four-year degree are at risk of being left behind. To ensure they reap the dividends of economic growth policymakers should focus on improving the quality of low-skill jobs, expanding career pathways to a middle-class life for those without a four-year degree, and increasing support for working families.