The Return of the American Slum

From The Atlantic comes yet another sobering confirmation of America’s economic and social decline. As rising inequality, government austerity, and declining employment continue apace, poverty is naturally rising, becoming more concentrated and self-perpetuating than ever.

The number of people living in high-poverty areas—defined as census tracts where 40 percent or more of families have income levels below the federal poverty threshold—nearly doubled between 2000 and 2013, to 13.8 million from 7.2 million, according to a new analysis of census data by Paul Jargowsky, a public-policy professor at Rutgers University-Camden and a fellow at The Century Foundation. That’s the highest number of Americans living in high-poverty neighborhoods ever recorded.

The development is worrying, especially since the number of people living in high-poverty areas fell 25 percent, to 7.2 million from 9.6 million, between 1990 and 2000. Back then, concentrated poverty was declining in part because the economy was booming. The Earned Income Tax Credit boosted the take-home pay for many poor families. (Studies have shown the EITC also creates a feeling of social inclusion and citizenship among low-income earners.) The unemployment rate fell as low as 3.8 percent, and the first minimum wage increases in a decade made it easier for families to get by. Programs to disassemble housing projects in big cities such as Chicago and Detroit eradicated some of the most concentrated poverty in the country, Jargowsky told me.

As newly middle-class minorities moved to inner suburbs, though, the mostly white residents of those suburbs moved further away, buying up the McMansions that were being built at a rapid pace. This acceleration of white flight was especially problematic in Rust Belt towns that didn’t experience the economic boom of the mid-2000s. They were watching manufacturing and jobs move overseas.

Another reason for this growing problem are ineffective, if not counterproductive, policies at both the state and federal level. 

Federal dollars have sometimes been used in ways that increase the concentration of poverty. Most affordable housing is built with low-income housing tax credits, which are distributed by the states. States assign the tax credits through a process in which they weigh a number of different factors including the location of proposed developments. Many states have favored projects in low-income areas, a practice that was the recent subject of a Supreme Court case known as Inclusive Communities. The Inclusive Communities Project argued, in the case, that the way Texas allocated tax credits was discriminatory, since 93 percent of tax credit units in Dallas are located in census tracts that are more than 50 percent minority, and are predominantly poor. The Supreme Court agreed in June, allowing groups to bring lawsuits about such segregation.

Finally, Housing Choice Vouchers, also known as Section 8, are meant to give poor families better options about where they live, but are instead confining the poor to the few neighborhoods where landlords will accept the voucher.

All of these developments have increased the racial concentration of poverty, especially in mid-sized American cities.

As there, are some legal and political solutions that will help, outside of broadly improving economic prospects for most Americans.

Some recent developments, including the Supreme Court decision and a new HUD rule that requires regions to think more carefully about segregation, are positive signs. But Jargowsky says deeper policy prescriptions are needed to reduce these depressing trends in concentrated poverty. First, he says, federal and state governments must ensure that new suburban developments aren’t built more quickly than the metropolitan region is growing, so that such developments don’t create a population vacuum in cities and inner suburbs. Second, every city and town must ensure that new housing construction reflects the income distribution of the metropolitan area, he said, so that more housing is available to people of all incomes in different parts of town.

“If we are serious about breaking down spatial inequality”, Jargowsky writes, “We have to overcome our political gridlock and chart a new course toward a more geographically inclusive society”.

So long as most Americans are squeezed between the high and rising costs of healthcare, housing, and education, and stagnant incomes, such solutions will only go so far.

These consequences are all the more jarring given that they disproportionately impact the most vulnerable in society, namely children and the elderly. As the article notes, a child who grows up in a high-poverty area is likely to remain poor for a lifetime. According to a recent Harvard study, children who moved from poor areas to more affluent areas had higher incomes and better educational achievements than those who stayed in poor areas.

So unless we reduce the high concentration of poverty, if not poverty as a whole, today’s poor children will be tomorrow’s poor adults, continuing this unjustifiable cycle.

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