Next Week’s Poverty Numbers: What Metro Areas Can Expect
As the national economy continues its tepid recovery in the aftermath of the Great Recession, spending fights in Washington and state capitals have increasingly zeroed in on programs that offer critical support to millions of low-income families across the country struggling to make ends meet. The current debate about the future of food stamps (i.e., the Supplemental Nutrition Assistance Program, or SNAP), or recent cuts to the state Earned Income Tax Credit in Michigan and North Carolina, are just a couple of examples.
Amid those battles, next week the U.S. Census Bureau will release new data on the state of poverty in United States as of 2012. Their findings are likely to underscore how millions more Americans continue to grapple with poverty than before the crash, even three years after the recession officially ended.
The numbers will come in two waves. First, on September 17, we’ll get official national-level estimates on poverty, income, and health insurance coverage from the Current Population Survey. Second, on September 19, results from the 2012 American Community Survey will provide a local-level look at the trends, allowing us to see how the map of poverty has (or hasn’t) changed across the nation’s largest metro areas, and within their cities and suburbs.
Most analysts expect the September 17 release to show at best a slight decline in the national poverty rate, which in 2011 stood at 15.0 percent. Their modest expectations stem in part from the fact that, even though the U.S. unemployment rate declined in 2012 from 8.9 to 8.1 percent, some of those decreases came as discouraged workers dropped out of the labor force all together. In addition, some of the fastest growing occupations since the recovery began have been in low-wage jobs that may not pay enough to boost working families’ incomes above the poverty line.
What does this mean for the major metro markets that make up the national economy? In recent years, declining regional unemployment rates failed to translate into meaningful improvements in regional poverty rates. Between 2009 and 2010, 78 of the nation’s 100 largest metro areas registered at least a small decline in their unemployment rates, yet none saw their poverty rates fall by a significant margin. In fact, poverty rates grew in 47 metro areas in that year. In the following year, unemployment rates improved in 88 regions. Yet only Grand Rapids experienced a slight but statistically significant poverty decrease, and 20 other large metro areas saw increases.
In 2012, nearly every major market (90 of 100) saw its unemployment rate fall. It may be that regions like Denver, Des Moines, Detroit, Stockton, and Tampa, which saw unemployment fall the most, manage real progress against poverty. But in light of the small poverty rate reduction expected at the national level, and the rather modest declines in unemployment seen in most major metro areas, it seems likely that the latest findings will point to stagnant and elevated poverty rates across the metro map.
Another trend to watch is poverty’s location within metro areas. Will the steady suburbanization of poverty continue?
On the one hand, big cities grew faster than suburbs from 2011 to 2012, so the faster suburban population growth that swept up even low-income individuals may no longer hold. On the other hand, the economic revival of many city neighborhoods in recent years suggests that some suburban areas continue to become relatively more affordable for the poor. The data on September 19 should reveal which dynamic prevailed in 2012.
Former Nonresident Senior Fellow
Interim Vice President and Director - Brookings Metro
Next week will give us the details, but policymakers from Washington to state capitals to local cities and towns should expect a reminder that the recovery continues to leave millions of American families and communities behind.
Additionally, next week’s national numbers should also provide insight into the role programs like the Earned Income Tax Credit (EITC), refundable Child Tax Credit (CTC), and food stamps play in helping to fight poverty. (While those estimates are not broken out at the local level, Thursday’s ACS release will offer data on food stamp receipt in 2012, and Brookings’ newly updated EITC Interactive now has details on tax filers who received the EITC in that year, including dollar amounts claimed.)
Poverty is a stubborn thing. Leaders in cities, suburbs, and rural areas should be similarly stubborn about protecting the safety net programs that remain so essential to their people and places today.