Economy

This Is the Poorest City in America

(Update) The nationwide poverty rate has been dropping since a decade ago. It was 15.1% in 2011 but declined to 10.5% in 2019. There is speculation that COVID-19-driven government support will drive that number down again this year.

The Census Bureau has created another way to calculate poverty, what it calls the Supplemental Poverty Measure. This number adds “many of the government programs designed to assist low-income families and individuals that are not included in the official poverty measure.” This number was 11.7% in 2019.

Poverty rates vary widely by location. The federal government provides them by state, county and metropolitan area. Interestingly, there is no relationship between population growth and poverty rates, as the new 2020 census data show, particularly when compared to the population in the same metros in 2010.

Across the 385 metro areas the census measures, the poverty rate varies from 27.3% to 5.2%. At the top of that range is McCallen, Texas. Its population grew 13% from 2010 to 2020 and hit 875,200. This is among the fastest paces across all metros for the same period.

McAllen has other hallmarks of an extremely poor city. The percentage of people who have a high school education or better is a low 67.5%. The median household income is $41,800, well over $20,000 below the national number. Just over 90% of the population is Hispanic.

McAllen sits on the Rio Grande, just across the river from Reynosa, Mexico. It is also almost directly south of San Antonio.

Census data also show that poverty is not clustered in one area of the United States. The other five cities with poverty rates over 25% are Brownsville, Texas; El Centro, California; Las Cruces, New Mexico; and Monroe, Louisiana.

Why is the poverty rate in McCallen so high? According to the Dallas Federal Reserve, agribusiness business activity in the area has collapsed. The Dallas Fed also points to low education rates as an issue. That is unlikely to change soon.