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County Economic Status in Appalachia, FY 2011The Center for Economic Development, Entrepreneurship and Technology maintains a primary focus in the distressed areas of Eastern Kentucky, which include the 51 counties in the Appalachian Regional Commission (ARC). The (ARC) uses an index-based county economic classification system to identify and monitor the economic status of Appalachian counties. The system involves the creation of a national index of county economic status through a comparison of each county's averages for three economic indicators—three-year average unemployment rate, per capita market income, and poverty rate—with national averages. Each Appalachian county is classified into one of five economic status designations, based on its position in the national ranking. Distressed Designation and County Economic Status Classification System, FY 2007 – FY 2011

  • Distressed counties are the most economically depressed counties. They rank in the worst 10 percent of the nation's counties.

  • At-Risk counties are those at risk of becoming economically distressed. They rank between the worst 10 percent and 25 percent of the nation's counties.

  • Transitional counties are those transitioning between strong and weak economies. They make up the largest economic status designation. Transitional counties rank between the worst 25 percent and the best 25 percent of the nation's counties.

  • Competitive counties are those that are able to compete in the national economy but are not in the highest 10 percent of the nation's counties. Counties ranking between the best 10 percent and 25 percent of the nation's counties are classified competitive.

  • Attainment counties are the economically strongest counties. Counties ranking in the best 10 percent of the nation's counties are classified attainment.

While primary service is the eastern region of Kentucky, assistance may be provided throughout the state depending upon the nature of the request, the benefits to economically distressed communities, and available resources. The counties included in the ARC region are some of the poorest in the country. According to the County Economic Status in Appalachia, FY 2011, (Effective October 1, 2010 through September 30, 2011), Eastern Kentucky contains 43 counties labeled as distressed in 2011 by the ARC by virtue of:

  • 196% of the U.S. poverty rate

  • 135% of the U.S. three-year average unemployment rate

  • 48% of the U.S. per capita market income

Historically, the economy of Eastern Kentucky has experienced myriad problems contributing to the depressed economy of the area. Factors working against economic development include dependence on the coal industry, large numbers of absentee landowners, inadequate public services and educational opportunities, infrastructure problems, and periods of short-term expansion. Below are compariable statistics of Kentucky's Appalachian counties provided by the ARC.

  • In 2007 the average per capita income in Kentucky Appalachia was $15,690 while Kentucky's average was $24,700 and the national average was $32,930.

  • Thirty-two percent of rural counties in Appalachia are considered distressed, compared to only 17% of rural counties in the rest of the nation.

  • Poor quality and incomplete physical infrastructure (eg. roads, sewers, IT) continue to contribute to persistent and significant economic development problems.

  • Eastern Kentucky's housing needs remain significant with 46% living in substandard housing.

  • Fifteen percent of all rural housing units are manufactured homes compared to 6% for the nation.

  • Regional high school dropout rate ranges from 40%-50% .

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