The Changing Shape of American Cities

Introduction:
The last two decades have brought dramatic changes to many American cities. Most cities in the United States in 1990 had a “donut” shape, with wealthier residents in a booming suburban ring surrounding a decaying core. Today cities are increasingly resembling what has been called a new donut – with three, rather than two rings. The center has grown much more desirable to educated, higher-income residents, especially young adults under the age of 35. Poverty, meanwhile, is migrating outwards, creating an “inner ring” of urban and early suburban neighborhoods around the core, where per capita incomes have fallen and education rates are stagnant. Beyond the inner ring, an outer ring of newer and larger suburbs continues to add population.

Source: Demographics Research Group, University of Virginia Weldon Cooper Center for Public Service.

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Poverty in the United States: 2013 (September 25, 2014)

Abstract:

In 2013, 45.3 million people were counted as poor in the United States under the official poverty measure—a number statistically unchanged from the 46.5 million people estimated as poor in 2012. The poverty rate, or percent of the population considered poor under the official definition, was reported at 14.5% in 2013, a statistically significant drop from the estimated 15.0% in 2012. Poverty in the United States increased markedly over the 2007-2010 period, in tandem with the economic recession (officially marked as running from December 2007 to June 2009), and remained unchanged at a post-recession high for three years (15.1% in 2010, and 15.0% in both 2011 and 2012). The 2013 poverty rate of 14.5% remains above a 2006 pre-recession low of 12.3%, and well above an historic low rate of 11.3% attained in 2000 (a rate statistically tied with a previous low of 11.1% in 1973).

Source: Congressional Research Service

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Policies to Address Poverty in America

Introduction:
Millions of people live in poverty in this country. They suffer not only material deprivation, but also the hardships and diminished life prospects that come with being poor. Childhood poverty often means growing up without the advantages of a stable home, high-quality schools, or consistent nutrition. Adults in poverty are often hampered by inadequate skills and education, leading to limited wages and job opportunities. And the high costs of housing, healthcare, and other necessities often mean that people must choose between basic needs, sometimes forgoing essentials like meals or medicine. In recognition of these challenges, The Hamilton Project has commissioned fourteen innovative, evidence-based antipoverty proposals. These proposals are authored by a diverse set of leading scholars, each tackling a specific aspect of the poverty crisis.

Source: Brookings Institution

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Lower-Income Individuals Without Pensions: Who Misses Out and Why?

Abstract:

In 2010, only 19 percent of individuals ages 50-58 whose household incomes were less than 300 percent of the poverty line participated in a pension of any kind at their current jobs, compared to 56 percent of those above 300 percent of poverty. This paper investigates this pension gap. In particular, we decompose the pension participation rate into its four elements in order to compare coverage between higher- and lower-income individuals: 1) the fraction of people who are currently working (the employment rate); 2) the fraction of workers who are in firms that offer pension benefits to at least some workers (the offer rate); 3) the fraction of workers who are eligible for pension benefits, conditional on being in a firm where it is offered (the eligibility rate); and 4) the fraction of workers who enroll in a pension plan when they are eligible (the take-up rate). We find that the substantial pension gap between higher- and lower-income individuals is driven primarily by the lower-income group’s lower employment rate and the smaller probability of working for an employer that offers pensions; when lower-income workers do have a pension plan at work, their eligibility and take-up rates are nearly equivalent to higher-income workers. We also find that the factors associated with a higher value for each element of pension participation are very consistent: higher education and income, previous pension history, and job characteristics including firm size, occupation, job tenure, and union status. Together, these findings suggest that policies such as automatic enrollment that focus on pension eligibility or take-up are unlikely to close the pension coverage gap between older, lower-income individuals and their higher-income contemporaries; instead, greater pension participation requires more jobs and, in particular, more “good jobs.”

Source: Working Papers, Center for Retirement Research at Boston College

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New York State’s Extreme School Segregation: Inequality, Inaction and a Damaged Future

From the Foreword:

New York's record on school segregation by race and poverty is dismal now and has been for a very long time. The children who most depend on the public schools for any chance in life are concentrated in schools struggling with all the dimensions of family and neighborhood poverty and isolation. In spite of the epic stuggle for more equitable funding in New York, there is a striking relationship between segregated education and unequal school success. Although many middle class families of all races would like their children to be educated in successful diverse schools, there are few such opportunities.

From the Executive Summary:

In this report, we provide a synthesis of over 60 years of research showing that school integration is still a goal worth pursuing. From the benefits of greater academic achievement, future earnings, and even better health outcomes for minority students, and the social benefits resulting from intergroup contact for all students -- like the possible reduction in prejudice and greater interracial communication skills -- we found that "real integration" is indeed an invaluable goal worth undertaking in growing multiracial societies.

Source: The Civil Rights Project, UCLA [via eScholarship Repository]

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The Economics of Slums in the Developing World

Abstract:

The global expansion of urban slums poses questions for economic research as well as problems for policymakers. We provide evidence that the type of poverty observed in contemporary slums of the developing world is characteristic of that described in the literature on poverty traps. We document how human capital threshold effects, investment inertia, and a "policy trap" may prevent slum dwellers from seizing economic opportunities offered by geographic proximity to the city. We test the assumptions of another theory -- that slums are a just transitory phenomenon characteristic of fastgrowing economies -- by examining the relationship between economic growth, urban growth, and slum growth in the developing world, and whether standards of living of slum dwellers are improving over time, both within slums and across generations. Finally, we discuss why standard policy approaches have often failed to mitigate the expansion of slums in the developing world. Our aim is to inform public debate on the essential issues posed by slums in the developing world.

Source: Journal of Economic Perspectives

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A Dozen Facts about America’s Struggling Lower-Middle-Class

From the introduction:

This Hamilton Project policy paper provides a dozen facts on struggling lower-middle-class families focusing on two key challenges: food insecurity, and the low return to work for struggling lower-middle-class families who lose tax and transfer benefits as their earnings increase. These facts highlight the critical role of federal tax and transfer programs in providing income support to families struggling to remain out of poverty.

Source: Brookings Institution

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Diversity in Old Age: The Elderly in Changing Economic and Family Contexts

The longevity of today’s older adults offers greater opportunities for meaningful interactions with children and grandchildren. Yet, the strength of these ties has been tested by changes in the structure and composition of families caused by high rates of cohabitation, childbearing outside of marriage, and divorce. And the rates of disruption are higher for poorer families, so older parents with the fewest resources to share are most likely to be called on for help. 

Source: Brown University

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What If You Had Been Less Fortunate: The Effects of Poor Family Background on Current Labor Market Outcomes

Abstract:

This study examines the correlation between childhood poverty and its influence on adulthood wage distribution, where childhood poverty refers to experience of poverty or poor family background during one's childhood. With the data from Korean Labor Income Panel Study, KLIPS, quantile regression technique and decomposition method are conducted to identify and decompose the wage gap between low (poor) and middle class income group along the whole current wage distribution, based on a simulated counterfactual distribution. The results show that, those who had been less fortunate during their childhood likely had less opportunity to gain labor market favored characteristics such as a higher level of education, and even earn lower returns to their labor market characteristics in the current labor market. This leads to a discount of about fifteen percentages points off of the wage on average in total for those with underprivileged backgrounds during childhood compared to those with the middle class background, and that disadvantage is observed heterogeneously, greater at the lower quantiles than the higher quantiles of the current wage distribution. Then this research contributes to the literature by providing a partial understanding of poverty in Korea and its possible causes, in particular, in form of poor family background or childhood poverty, with which the implication of intergenerational effect issue is considered.

Source: Institute for the Study of Labor

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Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry

Executive Summary

Nearly three-quarters (73 percent) of enrollments in America's major public benefits programs are from working families. But many of them work in jobs that pay wages so low that their paychecks do not generate enough income to provide for life's basic necessities. Low wages paid by employers in the fast-food industry create especially acute problems for the families of workers in this industry. Median pay for core front-line fast-food jobs is $8.69 an hour, with many jobs paying at or near the minimum wage. Benefits are also scarce for front-line fast-food workers; an estimated 87 percent do not receive health benefits through their employer. The combination of low wages and benefits, often coupled with part-time employment, means that many of the families of fast-food workers must rely on taxpayer-funded safety net programs to make ends meet.

This report estimates the public cost of low-wage jobs in the fast-food industry. Medicaid, the Earned Income Tax Credit and the other public benefits programs discussed in this report provide a vital support system for millions of Americans working in the United States' service industries, including fast food. We analyze public program utilization by working families and estimate total average annual public benefit expenditures on the families of front-line fast-food workers for the years 2007–2011.1 For this analysis we focus on jobs held by core, front-line fast-food workers, defined as nonmanagerial workers who work at least 11 hours per week for 27 or more weeks per year.

Source: Center for Labor Research and Education (UC Berkeley)

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Census Report: Income, Poverty and Health Insurance Coverage in the United States

From the Press Release:

The U.S. Census Bureau announced today that in 2012, real median household income and the poverty rate were not statistically different from the previous year, while the percentage of people without health insurance coverage decreased.

Median household income in the United States in 2012 was $51,017, not statistically different in real terms from the 2011 median of $51,100. This followed two consecutive annual declines.
The nation's official poverty rate in 2012 was 15.0 percent, which represents 46.5 million people living at or below the poverty line. This marked the second consecutive year that neither the official poverty rate nor the number of people in poverty were statistically different from the previous year's estimates. The 2012 poverty rate was 2.5 percentage points higher than in 2007, the year before the economic downturn.

The percentage of people without health insurance coverage declined to 15.4 percent in 2012 ─ from 15.7 percent in 2011. However, the 48.0 million people without coverage in 2012 was not statistically different from the 48.6 million in 2011.

Source: U.S. Census Bureau
Download: Income, Poverty, and Health Insurance Coverage in the United States: 2012

Poverty Impedes Cognitive Function

Abstract:

The poor often behave in less capable ways, which can further perpetuate poverty. We hypothesize that poverty directly impedes cognitive function and present two studies that test this hypothesis. First, we experimentally induced thoughts about finances and found that this reduces cognitive performance among poor but not in well-off participants. Second, we examined the cognitive function of farmers over the planting cycle. We found that the same farmer shows diminished cognitive performance before harvest, when poor, as compared with after harvest, when rich. This cannot be explained by differences in time available, nutrition, or work effort. Nor can it be explained with stress: Although farmers do show more stress before harvest, that does not account for diminished cognitive performance. Instead, it appears that poverty itself reduces cognitive capacity. We suggest that this is because poverty-related concerns consume mental resources, leaving less for other tasks. These data provide a previously unexamined perspective and help explain a spectrum of behaviors among the poor. We discuss some implications for poverty policy.

Source: Science 30 August 2013: Vol. 341 no. 6149 pp. 976-980 DOI: 10.1126/science.1238041

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Related stories at the Atlantic: The High Cost of Not having Enough & How Poverty Taxes the Brain

Poverty in the United States

From the Summary:
In 2011, 46.2 million people were counted as poor in the United States, the same number as in 2010 and the largest number of persons counted as poor in the measure’s 53-year recorded history. The poverty rate, or percent of the population considered poor under the official definition, was reported at 15.0% in 2011, statistically unchanged from 2010. The 2011 poverty rate of 15.0% is well above its most recent pre-recession low of 12.3% in 2006, and has reached the highest level seen in the past 18 years (1993). The increase in poverty over the past four years reflects the effects of the economic recession that began in December 2007. Some analysts expect poverty to remain above pre-recessionary levels for as long as a decade, and perhaps longer, given the depth of the recession and slow pace of economic recovery. The pre-recession poverty rate of 12.3% in 2006 was well above the 11.3% rate at the beginning of the decade, in 2000, which marked a historical low previously attained in 1973 (11.1%, a rate statistically tied with the 2000 poverty rate).

Source: Congressional Research Service, Library of Congress

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