I grew up in the US, mostly in Dixe, but one year of my youth was spent in Carlisle, Pennsylvania. I spent twenty years in the military (had a 13 month gap in active service), and lived as an adult in South Korea, Germany, Japan, and the US states of Georgia and California. I heard the word in all of those places. Nobody at all apparently considered the word racist. But, hey, maybe I was just lucky to be around people who know what a word means. FWIW, I was born in late 1958.
I think you have to look at the totality of the circumstances. This was already a pretty obscure word, I think. I’d guess that a significant proportion of the population had never heard of it even before it fell into disfavor because of what it sounds like. And it’s not a word in everyday use for anyone. And it sounds exactly like the slur. If you didn’t know the word, even if you picked up the -ly on the end, you might think somebody was using an adjectival form of the slur. You’d be really hard pressed to distinguish the “d” sound.
The “cost” of avoiding it is so minimal, and the risk of misunderstanding so obviously huge, that I think the decision to avoid it is easy, it’s just common sense.
The other problem, of course, is that it has certainly been appropriated by actual racists to mean the slur when they want a veneer of deniability, however thin the veneer. So you have to take that into account if you insist on continuing to use it.
Google ngram is much more consistent with your experience than with mine. Comparing niggardly, miserly and stingy - it has niggardly as the most common historically; a crossover point where all 3 are equally common around 1975, then niggardly starts dropping off. No surprise for me so far. But it still has niggardly at over half the frequency of stingy & miserly in 2010. So much more common than I expected. (Data past 2010 doesn’t seem reliable)
Granted this is in written English, but I’m not sure it makes all that much difference.
We would use “niggle” quite regularly in relation to team sports to mean small illegalities intended to make the opponent angry - niggardly follow quite naturally from there.
And there are LOTS of words that I know but don’t hear regularly, doesn’t mean they should be consigned to the scrapheap though - I find such thinking double plus ungood
Good grief. I misspelled Dixie. But with their current societal trends, fuck 'em.
Oddly, I think this is still a common word in British English.
AFAIK, “niggardly” is not derived from “niggle”. It’s derived from a pair of metal plates used in fireplaces in Elizabethan England that constrict the size of the fire. The plate was called a niggard. Pushing them close together to keep the fire small and use less wood was referred to as “being niggardly”. Cite: house tour of Plas Mawr, an historic house in Conwy, Wales. (And here’s hoping they knew what they were talking about.)
Hmmmm… niggard | Etymology, origin and meaning of niggard by etymonline
Reports the root as “niggard” (stingy person) or “nig”
When compared to Niggle Niggle Definition & Meaning | Dictionary.com
they appear to have the same root.
Dictionary.com has this to say
USAGE NOTE FOR NIGGARD
The words niggard and niggardly are often misinterpreted as racial slurs because they sound like what is probably the most offensive word in the English language. Actually, niggard dates back to Middle English. The first element nygg-, nig- was borrowed from a Scandinavian source, and -ard is a pejorative suffix. The adjective and adverb niggardly is a modern English formation from niggard. Historical linguists and others familiar with the etymology of these words know that they are not truly related to the word nigger. However, the source of a term is not as important as how it is perceived and used in contemporary language. So even if the words niggard and niggardly are not racial slurs in their etymologies, meanings, or historical uses, it may be wisest to avoid these terms. The connotation or perception of any word is determined by how it is used, received, and interpreted; niggard and niggardly may be offensive to many speakers because of this speculative, but false, etymology.
The board is telling me we’ve had this discussion before -
and in reality I would avoid the term in most situations as communication is far more important than correctness. It still galls however when “proper” words are denied us due to ignorance.
Other cites available here: Talk:niggard - Wiktionary, the free dictionary
Also, I didn’t say the terms weren’t related, just that I didn’t think niggard was derived from niggle. 'tis a niggling little detail, to be sure. 
Well you made me laugh so there is that…
Niggle please!
Agree with all of this.
Born in 1973, and here in America growing up I’ve never heard it used outside of in English class with old literature where we had to be told what it meant.
But I did come across the term “niggling injury” in the sports board game Blood Bowl, created by UK-based Games Workshop, to describe a chronic but small injury. This word was confused by players, but not with the same n-word one might expect, but with a monster in the Games Workshop pantheon: one of my fellow players always called it a “Nurgling Injury”.
The Nazis happened.
If you think it’s only Americans who have a problem with Swastikas, let me introduce you to a little place called Germany. Oh, and meet Israel…
I was born in 1971, and have a fairly good vocabulary but I never heard the word niggardly until the David Howard incident (Wow was it really 21 years ago!?).
“Niggling” is still common, as in “niggling doubt”. I’d probably avoid using it though. (unless somebody pointed this out already and I missed it)
I always thought that “niggling” was a thing that difficult-to-articulate doubts did in the back of my head.
A-a-a-a-nnnd, ninja’d.
I clicked through to the actual references in books, and it seemed that the vast majority were referring to scandals and the similarity to the slur rather than a natural usage of the word in the context of describing a cheap person. There were also a fair number of foreign texts and Quran references sprinkled in.
Any native English speaker using that word To describe a cheap person is using it for a purpose, and that purpose doesn’t have anything to do with the exact quality of cheapness being described.
Ah, good catch. Of course that makes sense, especially in written text.
Well, if we’re talking shades, all we need to do is set up a proper test, like comparing the word to a brown paper bag.