The Great Recession is rewriting the rules of American poverty. Data from the Census Bureau, released in September, show that during the first year of the recession, incomes fell farther and poverty leaped higher than during almost any other time in a generation.
In 2008, U.S. median income fell to $50,303 from $52,163 in 2007. That 3.6% decline is the largest one-year drop since records begin. The poverty rate increased to 13.2% from 12.5%, meaning the recession has brought 2.6 million more Americans into poverty. The Economic Policy Institute projects that in the next two years, incomes could decline by another $3,000 and poverty could increase by 1.9 percentage points.
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Just as the recession has changed the map of unemployment (see "Stars and Jobless Stripes"), it has redrawn the contours of poverty.
In Depth: America's 10 Most Impoverished Cities
To find out who is being hit worst, we used new data from the U.S. Census Bureau's 2008 American Community Survey. Although the Census Bureau defines poverty simply as people earning below a certain income level, (which varies based on family size) we also looked at per capita incomes for a region, the percentage of food stamp recipients, the percentage of people under age 65 receiving public health care and the unemployment rate.
Poverty may once have been worst in the Deep South. And cities on the border with Mexico are plagued with poverty. But the recession--and the decline of American manufacturing--has left Rust Belt cities with comparable levels of poverty. The problem is concentrated in these three regions. All 10 cities on our list are southern cities, border cities or declining manufacturing centers.
Four southern cities make the list: Pine Bluff, Ark.; Albany and Macon, Ga.; and Rocky Mount, N.C. In these cities, per capita incomes are between $18,000 and $23,000, but the bottom 20% are bringing in between $7,500 and $8,500.
The most impoverished region is at the southern tip of Texas. The metropolitan statistical areas for McAllen and Brownsville, Texas, have the lowest incomes and most food stamp recipients of any in America.
"When looking at the entire [metro area] we have a lot of communities that do have large pockets of poverty," says Mike Perez, the city manager of McAllen, Texas. "A lot are recent immigrants--that's part of it. There's a language barrier. And because they're recent immigrants, they don't have the education. That's tied to having jobs that pay well. It's a bit of a vicious cycle."
Despite the discouraging statistics, McAllen has been adding jobs rapidly--Forbes rated McAllen the best medium-size city for job growth earlier this year. (See "Best Mid-Sized Cities For Jobs.") Perez and other city leaders are quick to point out that they don't have control over their entire regions or local economies. Metropolitan statistical areas include counties that are tied to a central city economically, but are oftentimes beyond the control of the mayor. As well, the regions on this list are usually subject to national economic trends that even the best of local governments may be unable to fight.
"We just got our rating upgraded to AA by Standard & Poor's," says Perez. "Sometimes when you look at an entire region, you paint the entire region with the same brush. I think sometimes that's not quite fair. There are areas in the MSA that are very strong and doing very well." The same could be said of any of the regions on the list.
Further west, in El Centro, Calif., and Yuma, Ariz., incomes are higher, but Yuma and El Centro have the highest unemployment rates of any cities in the country.
Cathy Kennerson, CEO of the El Centro Chamber of Commerce, says a host of alternative energy companies--in geothermal, wind, biomass and solar--are looking to invest in the region, but she says Uncle Sam is holding things up with a slow approvals process. "It's such a great area here in the desert for renewable energy manufacturing," says Kennerson, who notes that one sector that continues to grow in the county is the federal government.
Finally, the industrial Midwest is creeping onto the list. The metropolitan areas around Saginaw, Mich., and Flint, Mich., have some of the worst poverty in the nation. Although per capita incomes are higher, the percentage of the population living below half of the poverty line is near 10% in both cities, and 15% of the populations are on food stamps. Other cities in the region are not far behind as manufacturing jobs continue to disappear. In the 1990s, there were nearly 18 million manufacturing jobs in the United States. The recession in 2001 lowered that number to about 14 million, and the current recession to 12 million. The result: a once-great production engine is collapsing into one of the most impoverished regions of America.