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In America’s War on Poverty, Inner Cities Remain the Front Line
By Lena Ferguson, ICIC
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As we eclipse the 50th anniversary of the War on Poverty, the question arises—where does American poverty live? Over the past few years, new studies suggest that the geography of poverty has shifted. As young professionals and baby boomers move back to the urban core, low-income residents are being pushed to the suburbs. Poverty, they argue, is now a suburban issue.
But a closer look at the data indicates that poverty remains overwhelmingly concentrated within the urban core.
Here are a few sobering statistics to offer a comparison:
Inner cities: 3 in 10 people live in poverty
Suburbs: 1 in 10 people live in poverty
Inner City Poverty Rate: 32%
Rest of Central City Poverty Rate: 9.4%
Rest of MSA Poverty Rate (i.e. suburbs): 9.7%
Rest of USA Poverty Rate (i.e. rural areas): 15.7%
An inner city, as defined by ICIC , is a geographic area that has a poverty rate of 20% or higher or a poverty rate of 1.5x higher than the metropolitan statistical area (MSA) and an unemployment rate of 1.5 the MSA and/or a median household income of 50% or less than the MSA. Importantly, ICIC excludes student populations, which skew poverty measures.
Using ICIC’s definition, it holds true that absolute poverty is higher in the suburbs (11 million) than in inner cities (8 million). But inner cities comprise less than 1% of land area versus the suburbs which comprise 17% of total U.S. land area—nearly 100x that of inner cities. The concentration of poverty in such a small land area suggests that inner cities should be the prime target for poverty alleviation efforts.
“Despite the fact that there are a greater number of people living in poverty in America’s suburbs, poverty and unemployment remain overwhelmingly concentrated in inner cities. Programs targeting inner cities will have greater spillover effects, potentially helping a far greater number of people than programs focused on the suburbs,” explains Kim Zeuli, Senior Vice President and Director of Research and Advisory at ICIC.
A program located in an inner city, such as Newark, would reach a far greater number of people living in poverty than a similar size program in a Newark suburb. To reach the same number of people in the suburbs, one would most likely have to replicate the program many times across the metropolitan region to achieve the same impact as the inner city program. And it is unlikely that one program would fit the needs of so many different communities.
Workforce training programs are one such example. Inner cities have a higher rate of unemployment (14%) than the national average (9%). By channeling workforce development funds into programs that serve inner city residents, their impact is magnified. From an annual survey of the 100 fastest growing inner city firms, we know that these firms alone employ over 103,000 people—50% of which are hired directly from inner city neighborhoods. Importantly, these companies also invest in their employees, through benefits (96% offer health insurance to employees) and professional development (69% offer further training and bonuses for workers). Workforce development programs that target unemployed inner city residents can serve a large number of low-income residents all at once, thereby preparing them for meaningful employment at urban businesses such as these.
Understanding the geography of poverty is also critical as policy shifts towards regionalism. Here at ICIC we know that in the absence of specific commitments to distressed urban areas, regionalism will deliver sub-par performance in terms of both growth and equity. Traditional regional approaches systematically undervalue the economic assets of cities and specifically tend to overlook the assets and opportunities in distressed urban communities. Inner cities have different growth drivers; if we truly care about alleviating urban poverty, we must have a distinct set of strategies unique to inner city economies.
On Monday night, in President Obama’s State of the Union Address, we heard him stress the need to reduce unemployment and lessen income inequality. And when it comes to pushing the line on the War on Poverty, inner cities remain the key battlefields.
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