Policy Hub: Macroblog provides concise commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues for a broad audience.
Comments are moderated and will not appear until the moderator has approved them.
Please submit appropriate comments. Inappropriate comments include content that is abusive, harassing, or threatening; obscene, vulgar, or profane; an attack of a personal nature; or overtly political.
In addition, no off-topic remarks or spam is permitted.
Poverty In The Suburbs
Once prized as a leafy haven from the social ills of urban life, the suburbs are now grappling with a new outbreak of an old problem: poverty. Currently, 38 million Americans live below the poverty line, which the federal government defines as an annual income of $20,000 or less for a family of four. But for the first time in history, more of America's poor are living in the suburbs than the cities—1.2 million more, according to a 2005 survey. "The suburbs have reached a tipping point," says Brookings Institution analyst Alan Berube, who compiled the data.
Cleveland, as it turns out, is chosen as the poster city for suburban poverty:
Six years ago, Brian Lavelle moved out of the city of Cleveland to the nearby suburb of Lakewood for what he thought would be a better life... Then, three years ago, the steel mill closed and Lavelle found that the life he dreamed of was just that, a dream. The suburbs, he quickly learned, are a tough place to live if you're poor.
... five years ago, a Hunger Network food pantry in Bedford Heights, a struggling suburb of Cleveland, served 50 families a month. Now more than 700 families depend on it for food.
Howard and Jane Pettry, of Middleburg Heights, Ohio [another Cleveland suburb], see themselves as working-class—just facing hard times. In December, Jane was laid off from her job at a local supermarket, and a week later Howard had a heart attack and missed a month of work from his job at a grain mill. Now Jane's collecting unemployment and they're staring at the poverty line as they struggle to pay the mortgage and the bills.
Is it really the case that the suburbs are increasingly poverty-ridden? I'm suspicious. Not too long ago, my colleagues Mark Schweitzer and Brian Rudick examined the case of Cleveland specifically:
Cleveland is the poorest big city in the United States, according to the Census Bureau, with nearly a third of the city’s residents living in poverty. The city’s poverty rate also rose since it was last measured. These numbers have received a lot of attention since they were released, but unfortunately, they are easily misinterpreted.
The numbers tell us that Cleveland has many poor people. But the numbers don’t tell us that Clevelanders have become worse off, that the region’s economy has deteriorated, or even that there are more poor people in the city than before.
A closer look at the American Community Survey results suggests that Cleveland’s poverty rate reflects the fact that the region’s poor are concentrated in the central city, while the wealthier live in the suburbs. The rate may have risen because people are moving out of the city, and those that leave are disproportionately better-off than those that stay behind. Neither of these facts on its own says anything about the economic health of the region, but they do say something about the relative desirability of living in the city versus its outskirts.
The definition of the Cleveland MSA has recently changed to exclude Ashtabula County, but under either the old or new definition, poverty is far lower outside the city than inside it.
... Looking at the poverty rate of the MSA [metropolitan statistical area] reveals that Cleveland (officially the Cleveland-Lorain-Elyria MSA) is not too different from other U.S. cities. The poverty rate of the Cleveland MSA is just a little above the average for all metropolitan areas in the United States. And like other cities in the country, Cleveland’s suburbs have far lower poverty than the city itself.
...the 2005 rise in metro area poverty figures seen in this figure is almost entirely accounted for by the increase in the number of poor people in the city of Cleveland, rather than in the suburbs. In the 2004-2005 shift that boosted the poverty rate for the MSA, for example, the number of poor people in the MSA grew by 43,540, but 36,991 of that increase occurred in the city.
It is true that the number of poor people in the suburbs is larger than the number of poor people in the city -- according to Schweitzer and Rudick "about two-thirds of the metro area’s poor live outside the city of Cleveland" -- but this is simply a function of the fact that the population of the MSA is heavily concentrated outside of the city. In terms of poverty trends, there just isn't that much happening in the suburbs:
If one wants to use Cleveland to tell a story about poverty -- especially concentrated poverty -- the action is still in the central city.
- Business Cycles
- Business Inflation Expectations
- Capital and Investment
- Capital Markets
- Data Releases
- Economic conditions
- Economic Growth and Development
- Exchange Rates and the Dollar
- Fed Funds Futures
- Federal Debt and Deficits
- Federal Reserve and Monetary Policy
- Financial System
- Fiscal Policy
- Health Care
- Inflation Expectations
- Interest Rates
- Labor Markets
- Latin AmericaSouth America
- Monetary Policy
- Money Markets
- Real Estate
- Saving Capital and Investment
- Small Business
- Social Security
- This That and the Other
- Trade Deficit
- Wage Growth