Two reports released by the Economic Innovation Group detail the growth and persistence of high-poverty neighborhoods in the U.S. over the last 40 years. The reports, “The Expanded Geography of High-Poverty Neighborhoods” and “The Persistence of Neighborhood Poverty,” find that since 1980, the number of high-poverty neighborhoods has increased, the income gap between high and low-poverty neighborhoods has widened, and the share of Hispanic individuals in high-poverty neighborhoods is growing.
Neighborhood poverty has far-reaching implications for numerous economic, social, and health outcomes. High-poverty neighborhoods can limit economic opportunity and mobility, making it difficult for subsequent generations to accumulate wealth, and the average median household income in high-poverty neighborhoods is less than half the national average, leading to a high proportion of residents who are rent-burdened and housing poor.
To assess the changing landscape of high-poverty neighborhoods, the authors use both decennial census data and American Community Survey (ACS) data to compare the poverty rate in all metro area census tracts in 1980, 1990, 2000, 2010, and 2018. The authors use the federal government’s Official Poverty Measure as the primary measure for poverty, classifying neighborhoods as “high poverty” if their poverty rate is at or above 30%.
According to the analysis, the number of high-poverty neighborhoods has seen a steady increase since 1980. Though the number of high-poverty neighborhoods decreased slightly during a period of economic growth in the 1990s, the number of high-poverty neighborhoods grew from 3,558 in 1980 to 6,547 in 2018. Neighborhoods are also experiencing more concentrated poverty. In 1980, 42% of poor Americans lived in a neighborhood where the poverty rate exceeded 20%. By 2018, the proportion of Americans living in these neighborhoods was 49%.
The income gap between low- and high-poverty neighborhoods has also increased. Adjusted for inflation, the median household income in high poverty neighborhoods increased slightly from approximately $25,000 in 1980 to $29,000 in 2018. Neighborhoods with poverty levels less than 10% saw a much larger increase, rising from $72,000 in 1980 to $92,000 in 2018.
The reports find that while the demographics of high-poverty neighborhoods are changing, stark racial disparities remain. In 2018, Hispanics accounted for 35% of people living in high-poverty neighborhoods, an increase from 20% in 1980. Black individuals accounted for 34% of people living in high-poverty neighborhoods in 2018, a fall from 58% in 1980. Despite these changing demographics, Black and Hispanic Americans are respectively six and four times more likely than white Americans to live in a high poverty neighborhood. In 2018, 23% of all Black individuals, 16% of Hispanic individuals, and 4% of non-Hispanic white individuals lived in high-poverty neighborhoods.
Over the last four decades, the number of high-poverty neighborhoods in the United States has risen significantly. These neighborhoods have experienced limited income growth, and they are disproportionately comprised of racial minorities. Living in a high-poverty neighborhood can impact a person’s economic mobility, perpetuating generational poverty and other adverse life outcomes. The authors call on policymakers to use this information as the country looks ahead to recover from the current economic crisis. Recovery efforts should focus on mitigating the negative effects of the pandemic and bolstering economic opportunity in high-poverty neighborhoods.
The reports can be found at: https://bit.ly/3cmS6tD