The causes of increasingly concentrated poverty are varied. In some parts of the country, the growing number of people living below the poverty line was enough to drive up the number of neighborhoods that are considered extremely poor. In every city on this list, the poverty rate increased since 2010. Additionally, Boise, Idaho, Omaha, Nebraska, and Worcester, Massachusetts are the only metro areas on this list with a lower poverty rate than the 14.2% U.S. rate.
Migration also likely explains the increasing concentrations of poverty in many cities on this list — either as lower income individuals move to poorer neighborhoods or wealthier individuals move out of them.
Although concentrated poverty increased substantially in each of these cities, this does not necessarily mean these areas are not benefiting from economic growth. Memphis, Tennessee is the only metro area on this list with a stagnant annualized economic growth rate since 2010. In more than a third of the cities on this list, annualized GDP growth outpaced the comparable 2.0% national GDP growth rate. However, not all metro area residents are benefitting equally from growth — as highlighted by the increase in concentrated poverty.
Concentrated poverty also varies by city along ethnic lines. Nationwide, the share of poor white Americans living in high poverty neighborhoods increased slightly from 4.9% in 2010 to 5.2% in 2016. Similarly, the share of poor black Americans living in extremely poor neighborhoods climbed from 22.5% to 22.9% over the same period. Meanwhile, the concentrated poverty among poor Hispanics fell from 16.7% to 15.0%. However, these patterns vary considerably from city to city.
Extremely poor neighborhoods typically share a number of of socioeconomic characteristics beyond a high poverty rate. According to a recent report on concentrated poverty released by the non-profit public policy think tank Brookings Institution, residents of high poverty neighborhoods tend to have weaker job-seeking networks. To be sure, in every metro area on this list, the unemployment rate in extremely poor neighborhoods is well above the corresponding rate in the city’s higher income neighborhoods. In Cleveland, the unemployment rate in high poverty neighborhoods is nearly 18 percentage points higher than in the rest of the city’s neighborhoods.
Educational attainment rates further underscore the social segregation precipitated by increasingly concentrated poverty. In every metro area on this list, adults in extremely poor neighborhoods are less likely to be college educated than those outside high poverty neighborhoods. The disparity in bachelor’s degree attainment rates range from 8 percentage points in Scranton, Pennsylvania to 24.3 percentage points in Indianapolis.
High poverty neighborhoods also tend to report higher crime rates and may account for a disproportionate share of violent crime in the metro areas on this list. Omaha, Nebraska and Boise, Idaho are the only metro area on this list, for which FBI data is available, with lower violent crime rates than the U.S. as a whole.
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 2010 — represented as a five-year average for 2006-2010, and 2016 — a five-year average for 2012-2016. 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 2006-2010 and 2012-2016 five-year periods.
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.