FUTURE FOR RURAL IOWA Presented at 77 th Annual Soil Management And Land Valuation Conference May 19, 2004 by Kenneth E. Stone, Professor Emeritus of Economics, ISU

SOME OF THE PROBLEMS

1. Retail Migration

1980 Iowa County Retail Sales Surplus or Leakage 25 Surplus Counties Four 40%+ Leakage Counties

2001 Iowa County Retail Sales Surplus or Leakage -59% -19% 28%-37% -5% LYON OSCEOLA DICKINSON EMMETKOSSUTH WINNEBAGO WORTH MITCHELL HOWARD WINNESHIEK ALLAMAKEE -24% 6% 5% -36% -18% -20% -21% -40%28% -46% -57% -13% -34% -45% -24% -12% 3% -34% -48% -44% 16% -57% -66% -27% -13% -44% -28% -49% -17% -44% 37% -24% -54% 27% -40% -18% -59% -8% -7% -2% -34% 46% 5% -32% -30% -44% -21% -34% -37% -33% -60% -30% -40% -22% -35% 18% -51% -11% -39% -38% -33% -36% -10% -57% -25% -58% -45% -56% -44% -36% -17% -62% 26% -34% -39% -31% -44% -52% 10% 0% -11% -37% -36% 16% -60% -45% -29% -41% -22% -49% 18% -80% CLAYTONFAYETTE CHICKASAW FLOYD CERRO GORDOHANCOCK WRIGHT FRANKLINBUTLER BREMER DUBUQUEDELAWAREBUCHANAN BLACK HAWK GRUNDY HARDIN HAMILTON WEBSTER HUMBOLDT POCAHONTAS PALO ALTO CLAY BUENA VISTA CALHOUN SACIDA WOODBURY PLYMOUTH SIOUXO'BRIEN CHEROKEE MONONACRAWFORD CARROLL GREENE BOONESTORY MARSHALL TAMA BENTON LINNJONESJACKSON CLINTON SCOTT CEDAR MUSCATINE LOUISA DES MOINES HENRY LEE JEFFERSON VAN BUREN DAVIS WAPELLO KEOKUK IOWA JOHNSONPOWESHIEK JASPERPOLKDALLASGUTHRIE AUDUBON SHELBYHARRISON CASS ADAIR MADISON WARREN LUCASMONROE APPANOOSE MARION MAHASKA WAYNE DECATUR CLARKEUNION RINGGOLD TAYLOR ADAMSMONTGOMERY PAGE FREMONT POTTAWATTAMIE MILLS WASHINGTON 17 Surplus Counties (32) 40%+ Leakage Counties

Jewell’s Sales Have Declined by 80% Since 1976

Memorabilia of a By-gone Era

EVENTS THAT CAUSED BIG CHANGES IN IOWA RETAIL

Population Changes

Rural Population Iowa Thousands

CountryPlaceFarm Iowa’s Rural Population Source: Dr. Willis Goudy, Census Services

Urban Population Iowa Thousands

Urban Population Iowa Millions 50, ,000-49,999 2,500-9,999

Shopping Malls

Coral Ridge Mall-1.2 Million Square Feet, Approx. $250 Mil Per Year

Tanger Factory Outlet Mall-Approx. $100 Mil Per Year

North Grand Mall in Ames, 351,000 Square Feet

Discount Department Stores

SUPER TARGET STORE IN ANKENY, IOWA, 240,000 SQUARE FEET

Wal*Mart Supercenter, 220,000 Sq. Ft., Ankeny, IA

BIG K MART AT AMES, IOWA

Big-Box Building Materials Stores

MENARD’S HOME IMPROVEMENT STORE IN ANKENY, IA

HOME DEPOT AT ANKENY, IOWA

LOWE’S HOME IMPROVEMENT AT AMES, IA

Ever Bigger Grocery Stores

CUB Food Store, Ames, IA, 65,000 Square Feet

HY VEE FOOD STORE LOCATED AT SITE OF FORMER K MART, 70,000 Square Feet

WHY IS RETAIL IMPORTANT?

The Multiplier Concept of Local Respending Patterns Initial $1.00 of exports 40¢ respent locally 16¢ respent locally 6¢ respent locally 60¢ leakage 24¢ leakage 10¢ leakage 3¢ leakage 3¢ respent locally 2¢ leakage 1¢ respent locally Initial impact: $1.00 $ Full impact: $1.66

Trends of Different Types of Retail Businesses

DECLINING BUSINESSES

Men’s Apparel Stores Change 1976 to 1998 Figures have been adjusted for inflation. -209

Iowa Clothing Stores Change 1976 to 2002 Figures have been adjusted for inflation. -178

Iowa Drug Stores Change 1976 to 2002 Figures have been adjusted for inflation. -12

CONSOLIDATING BUSINESSES

Iowa Department Stores Change 1976 to 2002 Figures have been adjusted for inflation. -74

Iowa Grocery Stores Change 1976 to 2002 Figures have been adjusted for inflation. -965

Iowa Shoe Stores Change 1976 to 2002 Figures have been adjusted for inflation. -208

Iowa Hardware Stores Change 1976 to 2002 Figures have been adjusted for inflation. -451

SATURATED BUSINESSES

Iowa Used Merchandise Stores Change 1976 to 2002 Figures have been adjusted for inflation. +1,085

Iowa Hobby, Toy, Craft Stores Change 1976 to 2002 Figures have been adjusted for inflation. +3,178

Iowa Florists Change 1976 to 2002 Figures have been adjusted for inflation. +178

Iowa Jewelry Stores Change 1976 to 2002 Figures have been adjusted for inflation. +29

Iowa Photo Studios Change 1976 to 2002 Figures have been adjusted for inflation. +531

Iowa Auto Parts Stores Change 1976 to 2002 Figures have been adjusted for inflation. +539

Iowa Gift & Novelty Stores Change 1976 to 2002 Figures have been adjusted for inflation. +625

Iowa Book & Stationery Stores Change 1976 to 2002 Figures have been adjusted for inflation. +248

GROWING BUSINESSES

Iowa Building Maintenance Firms Change 1976 to 2002 Figures have been adjusted for inflation. +1,028

Iowa Auto Repair & Service Firms Change 1976 to 2002 Figures have been adjusted for inflation. +1,338

Iowa Beauty & Barber Shops Change 1976 to 2002 Figures have been adjusted for inflation. +358

Iowa Eating & Drinking Places Change 1976 to 2002 Figures have been adjusted for inflation. +751

Winners and Losers for Small Towns

GROWING BUSINESSES IN IOWA TOWNS Population 1,000-2,499, Hobby, Toy, Craft Stores Veterinary Services Music Stores Cleaning & Maintenance Equip. Rental & Leasing Sporting Goods General Construction Book Stores Used Merchandise Plumbing & AC Sales Type of Business Percent Change

DECLINING BUSINESSES IN IOWA TOWNS Population1,000-2,499, Variety Stores Dry Cleaning Plants Gasoline Stations Women's Clothing Stores Department Stores Radio & TV Repair Barber Shops Grocery Stores Shoe Stores Hardware Stores Type of Business Percent Change

ANOTHER MAJOR PROBLEM 2. Regional Inequities in Jobs

Iowa Per Capita Personal Income Source: Bureau of Economic Analysis

Iowa Average Earnings Per Job Source: Bureau of Economic Analysis

Average Wage Per Job, 2000 $20,969 $24,564 $25,873 $24,702 $21,648 $21,570 $20,231 $29,418 $21,969 $33,426 $26,018 $22,174 $20,337 $22,432 $22,633 $19,231 $19,728 $25,148 $27,893 $18,477 $20,621 $19,337 $26,590 $21,724 $21,088 $25,716 $22,178 $20,021 $29,220 $26,930 $22,645 $23,405 $33,106 $24,872 $21,914 $24,654 $23,049 $21,434 $20,013 $26,175 $25,824 $26,810 $25,577 $23,642 $21,341 $24,433 $22,142 $19,126 $22,027 $19,612 $22,309 $21,422 $19,015 $22,134 $20,206 $19,561 $21,277 $26,973 $25,713 $21,480 $21,176 $20,469 $22,185 $22,987 $26,219 $18,718 $21,344 $24,461 $17,431 $18,444 $21,316 $23,352 $24,732 $20,883 $28,414 $22,657 $21,566 $22,875 $26,818 $19,624 $24,078 $27,978 $30,934 $23,678 $25,859 $22,087 $23,166 $22,368 $22,088 $24,776 $20,583 $22,451 $22,349 $27,665 $19,724 $22,196 $22,368$21,169 $23,518 LYON SIOUX PLYMOUTH WOODBURY MONONA HARRISON POTTAWATTAMIE MILLS FREMONT PAGETAYLORRINGGOLD DECATUR WAYNE APPANOOSE DAVIS VAN BUREN LEE DES MOINES HENRY JEFFERSON WAPELLO MONROE LUCAS CLARKE UNION ADAMS MONTGOMERY CASSADAIR MADISON WARREN MARION MAHASKA KEOKUK WASHINGTON LOUISA MUSCATINE SCOTT CLINTON JACKSON JONES CEDAR LINN JOHNSON BENTON IOWA TAMA POWESHIEKJASPER MARSHALL STORY POLK DALLAS BOONEGREENE GUTHRIE AUDUBON CARROLLCRAWFORD SHELBY IDA SAC CHEROKEE BUENA VISTA POCAHONTASHUMBOLDT KOSSUTH CALHOUN WEBSTER HAMILTON HARDINGRUNDY BLACK HAWK BUCHANAN DELAWARE DUBUQUE CLAYTON ALLAMAKEE WINNESHIEK FAYETTE HOWARD MITCHELL WORTH WINNEBAGO HANCOCK CERRO GORDO FLOYDCHICKASAW BREMER BUTLER FRANKLIN WRIGHT EMMET PALO ALTO DICKINSON CLAY OSCEOLA O'BRIEN 2000 Average Wage Per Job 75% of state average or below Less than state average (at least 75% of state average) Greater than state average

Average Manufacturing Earnings Per Employee (in 2000 Constant Dollars) Source: Bureau of Economic Analysis

Iowa Average Manufacturing Earnings Per Employee (i n 2000 Constant Dollars) Source: Bureau of Economic Analysis

Government Earnings as a Percent of Total Earnings, Source: Bureau of Economic Analysis

Iowa Government Earnings as a Percent of Total Earnings, Source: Bureau of Economic Analysis

Average Net Farm Proprietor’s Income (in 2000 Constant Dollars) Source: Bureau of Economic Analysis

Iowa Average Net Farm Proprietor’s Income ( in 2000 Constant Dollars) Source: Bureau of Economic Analysis

2000 Farm Payments Per Capita $3,080 $462 $303 $1,310 $1,479 $1,302 $1,709 $795 $1,775 $131 $826 $1,389 $1,786 $1,338 $1,778 $2,626 $1,078 $764 $175 $941 $3,456 $1,718 $270 $1,794 $2,142 $1,242 $1,300 $2,246 $465 $566 $1,536 $2,834 $45 $2,162 $381 $650 $1,485 $1,244 $1,782 $671 $354 $1,452 $942 $1,516 $1,262 $1,714 $1,776 $2,147 $1,181 $2,178 $2,615 $1,838 $2,521 $2,569 $2,723 $1,907 $1,266 $193 $2,579 $1,715 $905 $2,139 $1,464 $1,933 $378 $1,875 $556 $2,228 $969 $2,096 $1,215 $1,089 $2,415 $1,272 $129 $2,099 $2,086 $2,274 $879 $2,875 $334 $904 $429 $1,024 $918 $824 $1,053 $783 $937 $2,410 $2,476 $1,320 $2,911 $318 $1,939 $1,281 $927 $2,914 $1,881 LYON SIOUX PLYMOUTH WOODBURY MONONA HARRISON POTTAWATTAMIE MILLS FREMONT PAGETAYLORRINGGOLD DECATUR WAYNE APPANOOSE DAVIS VAN BUREN LEE DES MOINES HENRY JEFFERSON WAPELLO MONROE LUCAS CLARKE UNION ADAMS MONTGOMERY CASSADAIR MADISON WARREN MARION MAHASKA KEOKUK WASHINGTON LOUISA MUSCATINE SCOTT CLINTON JACKSON JONES CEDAR LINN JOHNSON BENTON IOWA TAMA POWESHIEKJASPER MARSHALL STORY POLK DALLAS BOONEGREENE GUTHRIE AUDUBON CARROLLCRAWFORD SHELBY IDA SAC CHEROKEE BUENA VISTA POCAHONTASHUMBOLDT KOSSUTH CALHOUN WEBSTER HAMILTON HARDINGRUNDY BLACK HAWK BUCHANAN DELAWARE DUBUQUE CLAYTON ALLAMAKEE WINNESHIEK FAYETTE HOWARD MITCHELL WORTH WINNEBAGO HANCOCK CERRO GORDO FLOYDCHICKASAW BREMER BUTLER FRANKLIN WRIGHT EMMET PALO ALTO DICKINSON CLAY OSCEOLA O'BRIEN 2000 Farm Payments Per Capita Less than state per capita Greater than state per capita More than twice state per capita

FUTURE FOR RURAL IOWA As global economy expands, perhaps ag will become truly profitable and less dependent on government payments Improvements in telecommunications (Internet) will expand markets for rural prople.

FUTURE FOR RURAL IOWA (Continued) Rural Iowa will have to come to grips with excess government. Will have to consolidate schools, court houses and other services. Local jurisdictions will have to pool resources with others and work as regions.

FUTURE FOR RURAL IOWA (Continued) Rural Iowa will have to continue to develop and promote its recreational and tourism strengths. Rural Iowa will have to vigorously promote and recruit younger families from urban areas on the basis of a better quality of life.

FUTURE FOR RURAL IOWA (Continued) Rural Iowa must capitalize on the benefits of technology. High speed internet should be omnipresent. Rural Iowans should be able to communicate with the world in the most modern way possible. We’ve got to find some way to attract and retail young people in order to reinvigorate the state.

FOR ADDITIONAL INFORMATION Contact: Kenneth E. Stone Professor Emeritus of Economics 2208 Van Buren Av. Ames, IA Phone: (515) Fax: (515) Web: