Midwest, Northern Cities hit hardest: Cleveland Fed Researchers.
Bureau Report
WASHINGTON, DC: The concentration of poverty in Metro areas in the United States has Increased, with the Midwest and cities in the North hit hardest, say a new report by Cleveland Fed Researchers, today.
According to researchers Dionissi Aliprantis, Kyle Fee, and Nelson Oliver, poverty in the US has risen in the last decade. And it has risen most rapidly in neighborhoods with an already large share of poor residents. This increase in the concentration of poverty during the past 10 years was found in 83 of the 100 metro areas studied by the trio.
In the Cleveland Fed’s service area, which includes Ohio and western Pennsylvania, the concentration of poverty rose markedly in many major metro areas due to the severity of the recession in Ohio.
Cleveland and Toledo, already in the top 10 highest concentration metro areas in 2000, maintained that ranking in 2006-2010. Akron, Columbus, Cincinnati, and Youngstown experienced large increases in the concentration of poverty. Only Dayton and Pittsburgh’s rankings were unchanged – neither city had a high concentration of poverty in 2000 nor experienced large increases.
According to the researchers, over the course of the last decade, the poverty rate in the US rose from 11.3 percent to 15.0 percent. From a geographic perspective, the increase has been widespread, as 49 out of the 50 states have seen a rise in poverty rates from 1999 to 2011. Clearly, this rise in poverty is linked closely to economic conditions, with many families and individuals seeing declining incomes during the Great Recession. The manufacturing states of the Midwest saw particularly sharp increases in poverty rates over this time period, they said in the report.
At the same time that the overall level of poverty was rising in the United States, the concentration of poverty was also increasing. While poverty tended to increase in all neighborhoods, this increase was most rapid in neighborhoods that already had a large share of poor residents. This increase in the concentration of poverty is a distinct cause for concern because the disadvantages to an individual from being poor are thought to be either muted or amplified depending on the poverty in their neighborhood. Neighborhoods with many poor residents typically have less access to job opportunities, face higher crime rates, and incur a range of other social problems.
The analysis by the researchers shows that metropolitan areas with the greatest concentration of poverty are northern cities, and that an increased poverty or unemployment rate at the metro-level implies a larger increase in the neighborhood poverty rates of the poor than of the non-poor.
The official poverty measure of the U.S. Census Bureau is defined at the family level in terms of absolute income thresholds. In 2010, for example, the U.S. Census Bureau defined the poverty threshold to be $22,113 for a family of four with two children. If such a family’s total income was less than this threshold, then that family and every individual in it was considered to be in poverty. The official poverty measure was created to reflect the level of income below which families lack the resources necessary to provide the food, shelter, and clothing needed for healthy living.
The researchers say in the 1990s, the overall poverty rate was falling and the share of people living in high-poverty neighborhoods was decreasing. But in the last decade, the concentration of poverty has increased, reversing progress made in the 1990s.
“It is important to note that the full effects of the Great Recession are likely not fully reflected in our data, as the end period of the data in our sample is averaged over the years 2006 through 2010. We expect that as the sample window shifts forward, estimates of neighborhood poverty rates will rise, and it is possible that the concentration of poverty will continue to rise,” they conclude.
“The key issue going forward will be whether the increased concentration of poverty is persistent or reverts back to its pre-recession levels. If the rise is persistent, then policymakers will need to look carefully at programs that mitigate the negative outcomes associated with such concentration of poverty,” they said in the report.