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Which places made progress against poverty in 2017?

The latest Census Bureau numbers on poverty and income, released last week, contained some good news for the nation: median household income increased in 2017, and the national poverty rate edged down 0.4 percentage points to reach 12.3 percent—its lowest level since 2006. The less good news is that those gains were smaller than the year before, and the actual number of people in poverty remained unchanged in 2017.

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Similarly, recently released 2017 American Community Survey data also show continued progress against poverty in the nation’s major metro areas (which collectively contain two-thirds of U.S. population), but contain signs that that progress has been uneven.

Major metro poverty fell for the fourth year in a row, but fewer places benefited

In 2017, the poverty rate for the nation’s 100 largest metro areas fell to 12.4 percent—a decline of 0.7 percentage points from 2016 (Figure 1). That decrease continued the steady progress that began in 2014, when the major-metro poverty rate inched down for the first time post-Great Recession.

But this time around, fewer regions shared in that progress. Among individual metro areas, 29 registered statistically significant decreases in their poverty rates in 2017, down from 36 in 2016, and 34 in 2015.

Metro poverty 2017

Among those 29 regions, some of the steepest poverty rate decreases occurred in Southern and Midwestern metro areas. Ten metro areas registered statistically significant poverty rate declines of at least 2 percentage points, more than threefold the average major-metro decrease (Table 1). At the same time, many of these same regions remain home to higher-than-average poverty rates, underscoring that recent progress against poverty has yet to reach many struggling residents in regions like Fresno, Nev., Memphis, Tenn., and Youngstown, Ohio.

table 1

In one metro area—New Orleans—poverty actually increased in 2017. There, the poverty rate grew from 17.0 percent in 2016 to 18.6 percent in 2017, and the metro area’s poor population climbed by an estimated 22,000.

Decreases in city poverty rates accelerated, while suburban progress stalled 

Central cities largely drove large-metro progress against poverty in 2017, as they have each year since metro area poverty rates began to fall post-recession (Figure 2).[1] The overall poverty rate in cities declined by more than twice as much as the rate in suburbs from 2016 to 2017 (1.2 percentage points versus 0.5 percentage points).

Change in city and suburban poverty rate

Among individual metro areas, 18 registered significant decreases in their city poverty rates of at least 1 percentage point—that’s one more region than last year. But, the number of metro areas making similar progress in their suburbs dropped from 8 in 2016 to just 5 in 2017. Notably, two metro areas that were among the hardest hit by poverty increases in the wake of the recession—Atlanta and Riverside, Calif.—recorded decreases in both their city and suburban poverty rates for the first time in 2017.

Cities also drove declines in the total number of major metro area residents living below the poverty line, even more so than in past years (Figure 3). Between 2016 and 2017, the number of people in poverty in major metros fell by 1.2 million. Cities accounted for more than half (55 percent) of that decline, even though they were home to 3.2 million fewer poor people overall than suburbs by 2017.

Figure 3: Contribution to annual decline in poor population

Poverty rates in cities remain higher than in suburbs, but the gap continues to narrow 

In 2017, city residents remained much more likely to live in poverty than their suburban counterparts. The city poverty rate was 17.5 percent in 2017, more than 7 percentage points higher than in suburbs (Figure 4). That disparity between cities and suburbs remains considerable, but it is also shrinking. In 2013 (a year into the easing of post-recession poverty rates in large cities and the year before suburbs posted their first poverty rate declines), the gap between city and suburban poverty rates was more than 9 percentage points. But, in each subsequent year, the gap has narrowed. That’s good news for cities where the economic expansion seems to finally be reaching further down the income ladder. However, that narrowing gap also raises troubling questions about the durability of economic hardship in suburbs that have shown little progress, especially amid so many indicators of a strong national economy.

City and suburban poverty rates

Indeed, those troubling questions extend beyond the suburbs. With unemployment rates so low and more people working full time, why don’t the 2017 data show more people and places making progress against poverty? The last time the unemployment rate was this low was at the end of the 1990s, but the major metro poverty rate has yet to drop to its level in 2000 (11.6 percent).

As Lauren Bauer’s analysis suggests, by and large it’s not that poor people (at least, those who are not children, seniors, disabled, or caregivers) are not working. It’s that they are not working jobs that pay enough or offer enough hours to make ends meet. The challenge in this economy seems not to be too few jobs, but too few jobs with wages and benefits that provide a path out of poverty.

There are federal programs that mitigate these challenges for low-income workers. The Supplemental Poverty Measure showed that assistance delivered through the Supplemental Nutrition Assistance Program (SNAP) lifted 3.4 million people out of poverty in 2017. Refundable tax credits (the Earned Income Tax Credit and Additional Tax Credit) bolster low wages for working families; last year they kept 8.3 million people out of poverty.

Rather than reading the good news in the 2017 data as a green light to cut safety net programs to help balance the budget, or to subject programs like SNAP, Medicaid, and housing assistance to additional (and likely ineffective) work requirements that would do more harm than good, policymakers would do well to recognize the “less good” news in the 2017 data. Those nuances show how uneven a strong economy looks when disaggregated across the nation’s major metro areas, cities, and suburbs. Amid the progress, there remain many people and places being left behind.

[1] As defined here, cities include those that appear first in the official metropolitan statistical area (MSA) title, and any other city in the MSA title that has a population of 100,000 or more. “Suburbs” represent the remainder of the official MSA outside cities.

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