A study of income and poverty data for Upstate New York finds that:
- Personal income in Upstate grew at just half the national rate in the 1990s, and by 2000 lagged the country by 11 percent. Over half of Upstate’s meager income growth was accounted for by increases in government transfer payments from such sources as Social Security, Medicare and Medicaid, and the earned income tax credit.
- Hour for hour, Upstate workers receive lower wages than people of similar age, race, sex, and educational backgrounds nationwide. Upstate’s workers also work fewer hours, and a smaller share of Upstate adults participate in the workforce, contributing to Upstate’s comparatively low wages per capita.
- Upstate’s highest-income households earn substantially lower incomes than the national average. Upstate’s 80th-percentile household—whose income is higher than 80 percent but lower than 20 percent of all households— earned about $74,300 in Upstate in 1999, compared with over $81,100 nationwide.
- Upstate’s lowest income households experienced little income growth in the 1990s. These households saw slow relative earnings growth and a substantial decrease in welfare income over the decade so that by 1999, their income had fallen from about 8 percent above the national average to about 1 percent below it.
- Upstate poverty rates grew for families, individuals, and children during the 1990s, while they decreased for all three of these groupings nationwide. Traditionally a low-poverty region, by 2000 Upstate’s poverty rate was 11 percent, closing in on the national average of 12.4 percent.
- Concentrated poverty is on the rise in Upstate even as it declines across the nation. The share of concentrated poverty neighborhoods in the United States, and the share of poor households living in such neighborhoods, dropped in the 1990s. The opposite was true for Upstate.
Upstate has two income problems requiring two sets of responses. Policies are needed to create better income opportunities for well-educated workers, who otherwise leave the region. Also, policies are needed that will directly improve the income of low-income households and low-wage workers and reduce their residential concentration in Upstate cities.