Tuesday, November 22, 2011 6:44:28 PM
Older, Suburban and Struggling, ‘Near Poor’ Startle the Census
Belinda Sheppard and two adult children live above the poverty line, and barely cover their bills.
Doug Mills/The New York Times
Graphic
Bordering on Poverty
A fuller measure of poverty by the Census Bureau shows more people living near poverty (not poor, but with incomes below 150% of the poverty line) than the old measure does. The new measure adjusts for cost of living and includes government benefits and income lost to taxes, health care and work expenses.
http://www.nytimes.com/interactive/2011/11/19/us/bordering-on-poverty.html
By JASON DePARLE, ROBERT GEBELOFF and SABRINA TAVERNISE
Published: November 18, 2011
WASHINGTON — They drive cars, but seldom new ones. They earn paychecks, but not big ones. Many own homes. Most pay taxes. Half are married, and nearly half live in the suburbs. None are poor, but many describe themselves as barely scraping by.
Down but not quite out, these Americans form a diverse group sometimes called “near poor” and sometimes simply overlooked — and a new count suggests they are far more numerous than previously understood.
When the Census Bureau this month released a new measure of poverty [ http://www.nytimes.com/2011/11/08/us/poverty-gets-new-measure-at-census-bureau.html ], meant to better count disposable income, it began altering the portrait of national need. Perhaps the most startling differences between the old measure and the new involves data the government has not yet published, showing 51 million people with incomes less than 50 percent above the poverty line. That number of Americans is 76 percent higher than the official account, published in September. All told, that places 100 million people — one in three Americans — either in poverty or in the fretful zone just above it.
After a lost decade of flat wages and the worst downturn since the Great Depression, the findings can be thought of as putting numbers to the bleak national mood — quantifying the expressions of unease erupting in protests and political swings. They convey levels of economic stress sharply felt but until now hard to measure.
The Census Bureau, which published the poverty data two weeks ago, produced the analysis of those with somewhat higher income at the request of The New York Times. The size of the near-poor population took even the bureau’s number crunchers by surprise.
“These numbers are higher than we anticipated,” said Trudi J. Renwick, the bureau’s chief poverty statistician. “There are more people struggling than the official numbers show.”
Outside the bureau, skeptics of the new measure warned that the phrase “near poor” — a common term, but not one the government officially uses — may suggest more hardship than most families in this income level experience. A family of four can fall into this range, adjusted for regional living costs, with an income of up to $25,500 in rural North Dakota or $51,000 in Silicon Valley.
But most economists called the new measure better than the old, and many said the findings, while disturbing, comported with what was previously known about stagnant wages.
“It’s very consistent with everything we’ve been hearing in the last few years about families’ struggle, earnings not keeping up for the bottom half,” said Sheila Zedlewski, a researcher at the Urban Institute, a nonpartisan economic and social research group.
Patched together a half-century ago, the official poverty measure has long been seen as flawed. It ignores hundreds of billions the needy receive in food stamps, tax credits and other programs, and the similarly large sums paid in taxes, medical care and work expenses. The new method, called the Supplemental Poverty Measure, counts all those factors and adjusts for differences in the cost of living, which the official measure ignores.
The results scrambled the picture of poverty in many surprising ways. The measure shows less severe destitution, but a bit more overall poverty; fewer poor children, but more poor people over 65.
Of the 51 million who appear near poor under the fuller measure, nearly 20 percent were lifted up from poverty by benefits the official count overlooks. But more than half were pushed down from higher income levels: more than eight million by taxes, six million by medical expenses, and four million by work expenses like transportation and child care.
Demographically, they look more like “The Brady Bunch” than “The Wire.” Half live in households headed by a married couple; 49 percent live in the suburbs. Nearly half are non-Hispanic white, 18 percent are black and 26 percent are Latino.
Perhaps the most surprising finding is that 28 percent work full-time, year round. “These estimates defy the stereotypes of low-income families,” Ms. Renwick said.
Among them is Phyllis Pendleton, a social worker with Catholic Charities in Washington, who proudly displays the signs of a hard-won middle-class life. She has one BlackBerry and two cars (both Buicks from the 1990s), and a $230,000 house that she, her husband and two daughters will move into next week.
Combined, she and her husband, a janitor, make about $51,000 a year, more than 200 percent of the official poverty line. But they lose about a fifth to taxes, medical care and transportation to work — giving them a disposable income of about $40,000 a year.
Adjust the poverty threshold, as the new measure does, to $31,000 for the region’s high cost of living, and Ms. Pendleton’s income is 29 percent above the poverty line. That is to say, she is near poor.
While the phrase is new to her, the struggle it evokes is not.
“Living paycheck to paycheck,” is how she describes her survival strategy. “One bad bill will wipe you out.”
It took her three years to save $3,000 for the down payment on her house, which she got with subsidies from a nonprofit group, Capital Area Asset Builders. But even after cutting out meals at Red Lobster, movie nights and new clothes, she had to rely on government aid to get health insurance for her daughters, 11 and 13, and she is already worried about college tuition.
“I’m turning over every rock looking for scholarships,” she said. “The money’s out there, you just have to find it.”
The findings, which the Census Bureau plans to release on Monday, have already set off a contentious debate about how to describe such families: struggling, straitened, economically insecure?
Robert Rector, an analyst at the conservative Heritage Foundation, rejects the phrase “near poverty,” arguing that it conjures levels of dire need like hunger and homelessness experienced by a minority even among those actually poor.
“I don’t have any objection to this measure if you use the term ‘low-income,’ ” he said. “But the emotionally charged terms ‘poor’ or ‘near poor’ clearly suggest to most people a level of material hardship that doesn’t exist. It is deliberately used to mislead people.”
Bruce Meyer, an economist at the University of Chicago, warned that the numbers are likely to mask considerable diversity. Some households, especially the elderly, may have considerable savings. (Indeed, nearly one in five of the near poor own their homes mortgage-free.) But others may be getting help with public housing and food stamps.
“I do think this is a better measure, but I wouldn’t say that 100 million people are on the edge of starvation or anything close to that,” Mr. Meyer said.
But Ms. Zedlewski said the seeming ordinariness of these families is part of the point. “There are a lot of low-income Americans struggling to make ends meet, and we don’t pay enough attention to them,” she said.
One group likely to gain attention is older Americans. By the official count, only 22 percent of the elderly are either poor or near poor. By the alternate count, the figure rises to 34 percent.
That is still less than the share among children, 39 percent, but it erases about half the gap between the economic fortunes of the young and old recorded in the official count. The likeliest explanation is high medical costs.
Another surprising finding is that only a quarter of the near poor are insured, and 42 percent have private insurance. Indeed, the cost of paying the premiums is part of the previously uncounted expenses they bear.
Belinda Sheppard’s finances have been so battered in the past year, she finds herself wondering what storm will come next. Her adult daughter lost her job and moved in. Her adult son does not have one and cannot move out.
That leaves three adults getting by on $46,000 from her daughter’s unemployment check and the money Ms. Sheppard makes for a marketing firm, placing products in grocery stores. Take out $7,000 for taxes, transportation and medical care, and they have an income of about 130 percent of the poverty line — not poor, but close.
Ms. Sheppard pays $2,000 in rent and says her employer classifies her as part time to avoid offering her health insurance, even though she works 40 hours a week. Unable to buy it on her own, she crosses her fingers and tries to stay healthy.
“I try to work as many hours as I can, but my salary, it’s not enough for everything,” she said. “I pay my bills with very small wiggle room. Or none.”
*
Related
Economix Blog: Voices of the Near Poor (November 19, 2011)
http://economix.blogs.nytimes.com/2011/11/19/voices-of-the-near-poor/
Middle-Class Areas Shrink as Income Gap Grows, New Report Finds (November 16, 2011)
http://www.nytimes.com/2011/11/16/us/middle-class-areas-shrink-as-income-gap-grows-report-finds.html [below]
New Way to Tally Poor Recasts View of Poverty (November 8, 2011)
http://www.nytimes.com/2011/11/08/us/poverty-gets-new-measure-at-census-bureau.html
Bleak Portrait of Poverty Is Off the Mark, Experts Say (November 4, 2011)
http://www.nytimes.com/2011/11/04/us/experts-say-bleak-account-of-poverty-missed-the-mark.html
Outside Cleveland, Snapshots of Poverty’s Surge in the Suburbs (October 25, 2011)
http://www.nytimes.com/2011/10/25/us/suburban-poverty-surge-challenges-communities.html
Related in Opinion
Reading Between the Poverty Lines (November 19, 2011)
http://www.nytimes.com/2011/11/20/opinion/sunday/reading-between-the-poverty-lines.html
Room for Debate: Are Older Americans Better Off? (November 9, 2011)
http://www.nytimes.com/roomfordebate/2011/11/09/are-older-americans-better-off/
*
© 2011 The New York Times Company
http://www.nytimes.com/2011/11/19/us/census-measures-those-not-quite-in-poverty-but-struggling.html [ http://www.nytimes.com/2011/11/19/us/census-measures-those-not-quite-in-poverty-but-struggling.html?pagewanted=all ]
---
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=====
Middle-Class Areas Shrink as Income Gap Grows, New Report Finds
The Germantown area of Philadelphia was formerly considered solidly middle class but is now mostly low income. "Everything started going down in the dumps," a longtime resident said.
Jessica Kourkounis for The New York Times
Graphic
Shrinking Middle as Income Inequality Rises
Nearly a third of American families now live in either affluent or poor neighborhoods, up from 15 percent four decades ago, according to a study of the country’s largest metropolitan areas. Meanwhile, the share of Americans living in middle-income neighborhoods has declined to 44 percent from 65 percent in 1970. Philadelphia and its Pennsylvania suburbs have seen among the largest change in income segregation.
[depicting the Philadelphia metro area in 1970, 1990 and 2007; key runs from 'Affluent neighborhood' at the top, through 'High income', 'Middle income', 'Low income', and 'Poor'; graph at top shows 'Families in each neighborhood type in metro areas', top line 'Middle Income', bottom line 'Poor or Affluent' -- complete graphic with annotations at http://www.nytimes.com/interactive/2011/11/16/us/shrinking-middle-as-income-inequality-rises.html?ref=us ]
Many stores along West Chelten Avenue in the Germantown area are closed and for rent.
Jessica Kourkounis for The New York Times
The Northern Liberties neighborhood of Philadelphia is now described as middle class.
Jessica Kourkounis for The New York Times
By SABRINA TAVERNISE
Published: November 15, 2011
WASHINGTON — The portion of American families living in middle-income neighborhoods has declined significantly since 1970, according to a new study ["Growth in the Residential Segregation of Families by Income, 1970-2009", http://graphics8.nytimes.com/packages/pdf/national/RussellSageIncomeSegregationreport.pdf ], as rising income inequality left a growing share of families in neighborhoods that are mostly low-income or mostly affluent.
The study, conducted by Stanford University and scheduled for release on Wednesday by the Russell Sage Foundation [ http://www.russellsage.org/ ] and Brown University, uses census data to examine family income at the neighborhood level in the country’s 117 biggest metropolitan areas.
The findings show a changed map of prosperity in the United States over the past four decades, with larger patches of affluence and poverty and a shrinking middle.
In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970. At the same time, a third of American families lived in areas of either affluence or poverty, up from just 15 percent of families in 1970.
The study comes at a time of growing concern about inequality and an ever-louder partisan debate over whether it matters. It raises, but does not answer, the question of whether increased economic inequality, and the resulting income segregation, impedes social mobility.
Much of the shift is the result of changing income structure in the United States. Part of the country’s middle class has slipped to the lower rungs of the income ladder as manufacturing and other middle-class jobs have dwindled, while the wealthy receive a bigger portion of the income pie. Put simply, there are fewer people in the middle.
But the shift is more than just changes in income. The study also found that there is more residential sorting by income, with the rich flocking together in new exurbs and gentrifying pockets where lower- and middle-income families cannot afford to live.
The study — part of US2010 [ http://www.s4.brown.edu/us2010/ ], a research project financed by Russell Sage and Brown University — identified the pattern in about 90 percent of large and medium-size metropolitan areas for 2000 to 2007. Detroit; Oklahoma City; Toledo, Ohio; and Greensboro, N.C., experienced the biggest rises in income segregation in the decade, while 13 areas, including Atlanta, had declines. Philadelphia and its suburbs registered the sharpest rise since 1970.
Sean F. Reardon, an author of the study and a sociologist at Stanford, argued that the shifts had far-reaching implications for the next generation. Children in mostly poor neighborhoods tend to have less access to high-quality schools, child care and preschool, as well as to support networks or educated and economically stable neighbors who might serve as role models.
The isolation of the prosperous, he said, means less interaction with people from other income groups and a greater risk to their support for policies and investments that benefit the broader public — like schools, parks and public transportation systems. About 14 percent of families lived in affluent neighborhoods in 2007, up from 7 percent in 1970, the study found.
The study groups neighborhoods into six income categories. Poor neighborhoods have median family incomes that are 67 percent or less of those of a given metropolitan area. Rich neighborhoods have median incomes of 150 percent or more. Middle-income neighborhoods are those in which the median income is between 80 percent and 125 percent.
The map of that change for Philadelphia is a red stripe of wealthy suburbs curving around a poor, blue urban center, broken by a few red dots of gentrification. It is the picture of the economic change that slammed into Philadelphia decades ago as its industrial base declined and left a shrunken middle class and a poorer urban core.
The Germantown neighborhood, once solidly middle class, is now mostly low income. Chelten Avenue, one of its main thoroughfares, is a hard-luck strip of check-cashing stores and takeout restaurants. The stone homes on side streets speak to a more affluent past, one that William Wilson, 95, a longtime resident, remembers fondly.
“It was real nice,” he said, shuffling along Chelten Avenue on Monday. Theaters thrived on the avenue, he said, as did a fancy department store. Now a Walgreens stands in its place. “Everything started going down in the dumps,” he said.
Philadelphia’s more recent history is one of gentrifying neighborhoods, like the Northern Liberties area, where affluence has rushed in, in the form of espresso shops, glass-walled apartments and a fancy supermarket, and prosperous new suburbs that have mushroomed in the far north and south of the metro area.
Lawrence Katz, an economist at Harvard, said the evidence for the presumed adverse effects of economic segregation was inconclusive. In a recent study [ http://www.huduser.org/portal/publications/pubasst/MTOFHD.html ] of low-income families randomly assigned the opportunity to move out of concentrated poverty into mixed-income neighborhoods, Professor Katz and his collaborators found large improvements in physical and mental health, but little change in the families’ economic and educational fortunes.
But there is evidence that income differences are having an effect, beyond the context of neighborhood. One example, Professor Reardon said, is a growing gap in standardized test scores between rich and poor children, now 40 percent bigger than it was in 1970. That is double the testing gap between black and white children, he said.
And the gap between rich and poor in college completion — one of the single most important predictors of economic success — has grown by more than 50 percent since the 1990s, said Martha J. Bailey, an economist at the University of Michigan. More than half of children from high-income families finish college, up from about a third 20 years ago. Fewer than 10 percent of low-income children finish, up from 5 percent.
William Julius Wilson, a sociologist at Harvard who has seen the study, argues that “rising inequality is beginning to produce a two-tiered society in America in which the more affluent citizens live lives fundamentally different from the middle- and lower-income groups. This divide decreases a sense of community.”
*
Related
Beyond Seizing Parks, New Paths to Influence (November 16, 2011)
http://www.nytimes.com/2011/11/16/nyregion/occupy-wall-street-organizers-consider-value-of-camps.html
Times Topic: Income Inequality
http://topics.nytimes.com/top/reference/timestopics/subjects/i/income/income_inequality/index.html
Related in Opinion
Room For Debate: Rising Wealth Inequality: Should We Care?
http://www.nytimes.com/roomfordebate/2011/03/21/rising-wealth-inequality-should-we-care
*
© 2011 The New York Times Company
http://www.nytimes.com/2011/11/16/us/middle-class-areas-shrink-as-income-gap-grows-report-finds.html
Belinda Sheppard and two adult children live above the poverty line, and barely cover their bills.
Doug Mills/The New York Times
Graphic
Bordering on Poverty
A fuller measure of poverty by the Census Bureau shows more people living near poverty (not poor, but with incomes below 150% of the poverty line) than the old measure does. The new measure adjusts for cost of living and includes government benefits and income lost to taxes, health care and work expenses.
http://www.nytimes.com/interactive/2011/11/19/us/bordering-on-poverty.html
By JASON DePARLE, ROBERT GEBELOFF and SABRINA TAVERNISE
Published: November 18, 2011
WASHINGTON — They drive cars, but seldom new ones. They earn paychecks, but not big ones. Many own homes. Most pay taxes. Half are married, and nearly half live in the suburbs. None are poor, but many describe themselves as barely scraping by.
Down but not quite out, these Americans form a diverse group sometimes called “near poor” and sometimes simply overlooked — and a new count suggests they are far more numerous than previously understood.
When the Census Bureau this month released a new measure of poverty [ http://www.nytimes.com/2011/11/08/us/poverty-gets-new-measure-at-census-bureau.html ], meant to better count disposable income, it began altering the portrait of national need. Perhaps the most startling differences between the old measure and the new involves data the government has not yet published, showing 51 million people with incomes less than 50 percent above the poverty line. That number of Americans is 76 percent higher than the official account, published in September. All told, that places 100 million people — one in three Americans — either in poverty or in the fretful zone just above it.
After a lost decade of flat wages and the worst downturn since the Great Depression, the findings can be thought of as putting numbers to the bleak national mood — quantifying the expressions of unease erupting in protests and political swings. They convey levels of economic stress sharply felt but until now hard to measure.
The Census Bureau, which published the poverty data two weeks ago, produced the analysis of those with somewhat higher income at the request of The New York Times. The size of the near-poor population took even the bureau’s number crunchers by surprise.
“These numbers are higher than we anticipated,” said Trudi J. Renwick, the bureau’s chief poverty statistician. “There are more people struggling than the official numbers show.”
Outside the bureau, skeptics of the new measure warned that the phrase “near poor” — a common term, but not one the government officially uses — may suggest more hardship than most families in this income level experience. A family of four can fall into this range, adjusted for regional living costs, with an income of up to $25,500 in rural North Dakota or $51,000 in Silicon Valley.
But most economists called the new measure better than the old, and many said the findings, while disturbing, comported with what was previously known about stagnant wages.
“It’s very consistent with everything we’ve been hearing in the last few years about families’ struggle, earnings not keeping up for the bottom half,” said Sheila Zedlewski, a researcher at the Urban Institute, a nonpartisan economic and social research group.
Patched together a half-century ago, the official poverty measure has long been seen as flawed. It ignores hundreds of billions the needy receive in food stamps, tax credits and other programs, and the similarly large sums paid in taxes, medical care and work expenses. The new method, called the Supplemental Poverty Measure, counts all those factors and adjusts for differences in the cost of living, which the official measure ignores.
The results scrambled the picture of poverty in many surprising ways. The measure shows less severe destitution, but a bit more overall poverty; fewer poor children, but more poor people over 65.
Of the 51 million who appear near poor under the fuller measure, nearly 20 percent were lifted up from poverty by benefits the official count overlooks. But more than half were pushed down from higher income levels: more than eight million by taxes, six million by medical expenses, and four million by work expenses like transportation and child care.
Demographically, they look more like “The Brady Bunch” than “The Wire.” Half live in households headed by a married couple; 49 percent live in the suburbs. Nearly half are non-Hispanic white, 18 percent are black and 26 percent are Latino.
Perhaps the most surprising finding is that 28 percent work full-time, year round. “These estimates defy the stereotypes of low-income families,” Ms. Renwick said.
Among them is Phyllis Pendleton, a social worker with Catholic Charities in Washington, who proudly displays the signs of a hard-won middle-class life. She has one BlackBerry and two cars (both Buicks from the 1990s), and a $230,000 house that she, her husband and two daughters will move into next week.
Combined, she and her husband, a janitor, make about $51,000 a year, more than 200 percent of the official poverty line. But they lose about a fifth to taxes, medical care and transportation to work — giving them a disposable income of about $40,000 a year.
Adjust the poverty threshold, as the new measure does, to $31,000 for the region’s high cost of living, and Ms. Pendleton’s income is 29 percent above the poverty line. That is to say, she is near poor.
While the phrase is new to her, the struggle it evokes is not.
“Living paycheck to paycheck,” is how she describes her survival strategy. “One bad bill will wipe you out.”
It took her three years to save $3,000 for the down payment on her house, which she got with subsidies from a nonprofit group, Capital Area Asset Builders. But even after cutting out meals at Red Lobster, movie nights and new clothes, she had to rely on government aid to get health insurance for her daughters, 11 and 13, and she is already worried about college tuition.
“I’m turning over every rock looking for scholarships,” she said. “The money’s out there, you just have to find it.”
The findings, which the Census Bureau plans to release on Monday, have already set off a contentious debate about how to describe such families: struggling, straitened, economically insecure?
Robert Rector, an analyst at the conservative Heritage Foundation, rejects the phrase “near poverty,” arguing that it conjures levels of dire need like hunger and homelessness experienced by a minority even among those actually poor.
“I don’t have any objection to this measure if you use the term ‘low-income,’ ” he said. “But the emotionally charged terms ‘poor’ or ‘near poor’ clearly suggest to most people a level of material hardship that doesn’t exist. It is deliberately used to mislead people.”
Bruce Meyer, an economist at the University of Chicago, warned that the numbers are likely to mask considerable diversity. Some households, especially the elderly, may have considerable savings. (Indeed, nearly one in five of the near poor own their homes mortgage-free.) But others may be getting help with public housing and food stamps.
“I do think this is a better measure, but I wouldn’t say that 100 million people are on the edge of starvation or anything close to that,” Mr. Meyer said.
But Ms. Zedlewski said the seeming ordinariness of these families is part of the point. “There are a lot of low-income Americans struggling to make ends meet, and we don’t pay enough attention to them,” she said.
One group likely to gain attention is older Americans. By the official count, only 22 percent of the elderly are either poor or near poor. By the alternate count, the figure rises to 34 percent.
That is still less than the share among children, 39 percent, but it erases about half the gap between the economic fortunes of the young and old recorded in the official count. The likeliest explanation is high medical costs.
Another surprising finding is that only a quarter of the near poor are insured, and 42 percent have private insurance. Indeed, the cost of paying the premiums is part of the previously uncounted expenses they bear.
Belinda Sheppard’s finances have been so battered in the past year, she finds herself wondering what storm will come next. Her adult daughter lost her job and moved in. Her adult son does not have one and cannot move out.
That leaves three adults getting by on $46,000 from her daughter’s unemployment check and the money Ms. Sheppard makes for a marketing firm, placing products in grocery stores. Take out $7,000 for taxes, transportation and medical care, and they have an income of about 130 percent of the poverty line — not poor, but close.
Ms. Sheppard pays $2,000 in rent and says her employer classifies her as part time to avoid offering her health insurance, even though she works 40 hours a week. Unable to buy it on her own, she crosses her fingers and tries to stay healthy.
“I try to work as many hours as I can, but my salary, it’s not enough for everything,” she said. “I pay my bills with very small wiggle room. Or none.”
*
Related
Economix Blog: Voices of the Near Poor (November 19, 2011)
http://economix.blogs.nytimes.com/2011/11/19/voices-of-the-near-poor/
Middle-Class Areas Shrink as Income Gap Grows, New Report Finds (November 16, 2011)
http://www.nytimes.com/2011/11/16/us/middle-class-areas-shrink-as-income-gap-grows-report-finds.html [below]
New Way to Tally Poor Recasts View of Poverty (November 8, 2011)
http://www.nytimes.com/2011/11/08/us/poverty-gets-new-measure-at-census-bureau.html
Bleak Portrait of Poverty Is Off the Mark, Experts Say (November 4, 2011)
http://www.nytimes.com/2011/11/04/us/experts-say-bleak-account-of-poverty-missed-the-mark.html
Outside Cleveland, Snapshots of Poverty’s Surge in the Suburbs (October 25, 2011)
http://www.nytimes.com/2011/10/25/us/suburban-poverty-surge-challenges-communities.html
Related in Opinion
Reading Between the Poverty Lines (November 19, 2011)
http://www.nytimes.com/2011/11/20/opinion/sunday/reading-between-the-poverty-lines.html
Room for Debate: Are Older Americans Better Off? (November 9, 2011)
http://www.nytimes.com/roomfordebate/2011/11/09/are-older-americans-better-off/
*
© 2011 The New York Times Company
http://www.nytimes.com/2011/11/19/us/census-measures-those-not-quite-in-poverty-but-struggling.html [ http://www.nytimes.com/2011/11/19/us/census-measures-those-not-quite-in-poverty-but-struggling.html?pagewanted=all ]
---
from elsewhere this string, (linked in) http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68940485 and preceding and following
=====
Middle-Class Areas Shrink as Income Gap Grows, New Report Finds
The Germantown area of Philadelphia was formerly considered solidly middle class but is now mostly low income. "Everything started going down in the dumps," a longtime resident said.
Jessica Kourkounis for The New York Times
Graphic
Shrinking Middle as Income Inequality Rises
Nearly a third of American families now live in either affluent or poor neighborhoods, up from 15 percent four decades ago, according to a study of the country’s largest metropolitan areas. Meanwhile, the share of Americans living in middle-income neighborhoods has declined to 44 percent from 65 percent in 1970. Philadelphia and its Pennsylvania suburbs have seen among the largest change in income segregation.
[depicting the Philadelphia metro area in 1970, 1990 and 2007; key runs from 'Affluent neighborhood' at the top, through 'High income', 'Middle income', 'Low income', and 'Poor'; graph at top shows 'Families in each neighborhood type in metro areas', top line 'Middle Income', bottom line 'Poor or Affluent' -- complete graphic with annotations at http://www.nytimes.com/interactive/2011/11/16/us/shrinking-middle-as-income-inequality-rises.html?ref=us ]
Many stores along West Chelten Avenue in the Germantown area are closed and for rent.
Jessica Kourkounis for The New York Times
The Northern Liberties neighborhood of Philadelphia is now described as middle class.
Jessica Kourkounis for The New York Times
By SABRINA TAVERNISE
Published: November 15, 2011
WASHINGTON — The portion of American families living in middle-income neighborhoods has declined significantly since 1970, according to a new study ["Growth in the Residential Segregation of Families by Income, 1970-2009", http://graphics8.nytimes.com/packages/pdf/national/RussellSageIncomeSegregationreport.pdf ], as rising income inequality left a growing share of families in neighborhoods that are mostly low-income or mostly affluent.
The study, conducted by Stanford University and scheduled for release on Wednesday by the Russell Sage Foundation [ http://www.russellsage.org/ ] and Brown University, uses census data to examine family income at the neighborhood level in the country’s 117 biggest metropolitan areas.
The findings show a changed map of prosperity in the United States over the past four decades, with larger patches of affluence and poverty and a shrinking middle.
In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970. At the same time, a third of American families lived in areas of either affluence or poverty, up from just 15 percent of families in 1970.
The study comes at a time of growing concern about inequality and an ever-louder partisan debate over whether it matters. It raises, but does not answer, the question of whether increased economic inequality, and the resulting income segregation, impedes social mobility.
Much of the shift is the result of changing income structure in the United States. Part of the country’s middle class has slipped to the lower rungs of the income ladder as manufacturing and other middle-class jobs have dwindled, while the wealthy receive a bigger portion of the income pie. Put simply, there are fewer people in the middle.
But the shift is more than just changes in income. The study also found that there is more residential sorting by income, with the rich flocking together in new exurbs and gentrifying pockets where lower- and middle-income families cannot afford to live.
The study — part of US2010 [ http://www.s4.brown.edu/us2010/ ], a research project financed by Russell Sage and Brown University — identified the pattern in about 90 percent of large and medium-size metropolitan areas for 2000 to 2007. Detroit; Oklahoma City; Toledo, Ohio; and Greensboro, N.C., experienced the biggest rises in income segregation in the decade, while 13 areas, including Atlanta, had declines. Philadelphia and its suburbs registered the sharpest rise since 1970.
Sean F. Reardon, an author of the study and a sociologist at Stanford, argued that the shifts had far-reaching implications for the next generation. Children in mostly poor neighborhoods tend to have less access to high-quality schools, child care and preschool, as well as to support networks or educated and economically stable neighbors who might serve as role models.
The isolation of the prosperous, he said, means less interaction with people from other income groups and a greater risk to their support for policies and investments that benefit the broader public — like schools, parks and public transportation systems. About 14 percent of families lived in affluent neighborhoods in 2007, up from 7 percent in 1970, the study found.
The study groups neighborhoods into six income categories. Poor neighborhoods have median family incomes that are 67 percent or less of those of a given metropolitan area. Rich neighborhoods have median incomes of 150 percent or more. Middle-income neighborhoods are those in which the median income is between 80 percent and 125 percent.
The map of that change for Philadelphia is a red stripe of wealthy suburbs curving around a poor, blue urban center, broken by a few red dots of gentrification. It is the picture of the economic change that slammed into Philadelphia decades ago as its industrial base declined and left a shrunken middle class and a poorer urban core.
The Germantown neighborhood, once solidly middle class, is now mostly low income. Chelten Avenue, one of its main thoroughfares, is a hard-luck strip of check-cashing stores and takeout restaurants. The stone homes on side streets speak to a more affluent past, one that William Wilson, 95, a longtime resident, remembers fondly.
“It was real nice,” he said, shuffling along Chelten Avenue on Monday. Theaters thrived on the avenue, he said, as did a fancy department store. Now a Walgreens stands in its place. “Everything started going down in the dumps,” he said.
Philadelphia’s more recent history is one of gentrifying neighborhoods, like the Northern Liberties area, where affluence has rushed in, in the form of espresso shops, glass-walled apartments and a fancy supermarket, and prosperous new suburbs that have mushroomed in the far north and south of the metro area.
Lawrence Katz, an economist at Harvard, said the evidence for the presumed adverse effects of economic segregation was inconclusive. In a recent study [ http://www.huduser.org/portal/publications/pubasst/MTOFHD.html ] of low-income families randomly assigned the opportunity to move out of concentrated poverty into mixed-income neighborhoods, Professor Katz and his collaborators found large improvements in physical and mental health, but little change in the families’ economic and educational fortunes.
But there is evidence that income differences are having an effect, beyond the context of neighborhood. One example, Professor Reardon said, is a growing gap in standardized test scores between rich and poor children, now 40 percent bigger than it was in 1970. That is double the testing gap between black and white children, he said.
And the gap between rich and poor in college completion — one of the single most important predictors of economic success — has grown by more than 50 percent since the 1990s, said Martha J. Bailey, an economist at the University of Michigan. More than half of children from high-income families finish college, up from about a third 20 years ago. Fewer than 10 percent of low-income children finish, up from 5 percent.
William Julius Wilson, a sociologist at Harvard who has seen the study, argues that “rising inequality is beginning to produce a two-tiered society in America in which the more affluent citizens live lives fundamentally different from the middle- and lower-income groups. This divide decreases a sense of community.”
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Related
Beyond Seizing Parks, New Paths to Influence (November 16, 2011)
http://www.nytimes.com/2011/11/16/nyregion/occupy-wall-street-organizers-consider-value-of-camps.html
Times Topic: Income Inequality
http://topics.nytimes.com/top/reference/timestopics/subjects/i/income/income_inequality/index.html
Related in Opinion
Room For Debate: Rising Wealth Inequality: Should We Care?
http://www.nytimes.com/roomfordebate/2011/03/21/rising-wealth-inequality-should-we-care
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© 2011 The New York Times Company
http://www.nytimes.com/2011/11/16/us/middle-class-areas-shrink-as-income-gap-grows-report-finds.html
Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
F6
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