The American economy has been recovering from the Great Recession for nearly eight years. As the U.S. has added jobs and wages have risen steadily, a troubling trend has emerged. As incomes have risen throughout the country, so too has poverty. In 2015, 14.6% of Americans lived in poverty, compared to the 12.4% who did in 2009.
Not only has poverty risen across the country, but the likelihood of living in an extremely poor, economically distressed neighborhood as a low-income individual has also gone up. In 2009, 11.7% of all Americans living below the poverty line resided in neighborhoods where at least 40% of residents were poor. In 2015, that share increased to 14.1%. People of all incomes living in extremely poor neighborhoods face greater obstacles to living healthy, safe, and prosperous lives. But for people earning poverty wages and who often struggle to provide basic necessities, the challenges of living in such neighborhoods are even greater.
In some major metropolitan areas, the growth of extremely poor neighborhoods far outpaced the national trend. In Bakersfield, California, over one in every three poor residents now live in concentrated poverty. 24/7 Wall St. reviewed the 20 cities hit hardest by extreme poverty.
The national rise in concentrated poverty — the increase in the share of people living in high-poverty neighborhoods — coincided with a substantial increase in the number of high-poverty neighborhoods. The number of such neighborhoods nationwide rose from about 1,900 in 2009 to roughly 2,700 in 2015.
In an exchange with 24/7 Wall St., Natalie Holmes, research analyst at the Brookings Institution’s Metropolitan Policy Program, explained that concentrated poverty can rise, and neighborhoods can tip into extreme poverty for many reasons. “Existing residents of the neighborhood could see their incomes fall below the poverty line; lower-income people could move into the neighborhood; and/or higher-income people could move out of the neighborhood. One or more of these could push the neighborhood’s poverty rate higher.” Holmes explained.
Regardless as to where poor Americans live, they face a number of disadvantages their peers do not. When they must live in areas where they are surrounded by poverty, these problems are exacerbated, and others arise as well. Holmes noted that these challenges include “worse physical and mental health outcomes; worse schools and lower graduation rates; and lower inter-generational economic mobility—meaning children who grow up in these neighborhoods may have a harder time climbing the economic ladder in adulthood.”
Americans living in high-poverty neighborhoods are more likely to be exposed to higher crime rates and are less likely to be mentally and physically healthy. Less affluent neighborhoods are less likely to provide gainful employment opportunities, healthy eating and exercise opportunities, adequate health facilities, and more.
While the presence of high-poverty neighborhoods can partially be explained by normal market forces and by the presence of government low-income housing projects in some communities, these alone do not fully explain why so many poor people live in areas surrounded by poverty. The United States has a history of policies and practices that grouped low-income residents together. Frequently, these policies were racially motivated, such as the so-called “redlining” of neighborhoods that can be traced in part to the Federal Housing Act of 1934, although these practices were going on informally long before then, and long after. Housing discrimination remains a problem in many major cities .
A history of housing segregation along racial lines helps explain why concentrated poverty so disproportionately affects racial minorities in the United States. While 5.7% of poor white Americans live in high-poverty neighborhoods, 16.8% of poor Hispanics live in these communities. Nearly one in every four poor African Americans live in concentrated poverty.
To identify the major metropolitan areas where poverty is concentrating the fastest, 24/7 Wall St. reviewed U.S. Census Bureau American Community Survey data on poverty rates at the tract level. The concentrated poverty rate is the share of a metropolitan area’s poor population that lives in a census tract characterized by extreme poverty — having a poverty rate of 40% or higher. The concentrated poverty rate was reviewed for 2009 — represented as a five-year average for 2005-2009, and 2015 — a five-year average for 2011-2015. Census tracts in which more than 50% of the population is enrolled in postsecondary school or where the total population is fewer than 500 were excluded from consideration of extreme poverty. Violent crime rates are as of 2015 and are from the FBI’s Uniform Crime Report. We also reviewed other data from the American Community Survey, including educational attainment rates for both groups in concentrated poverty and those not in poverty. These data are also averages of the 2005-2009 and 2011-2015 five-year periods.
These are the cities hit hardest by extreme poverty.