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1 Introduction In its earlier study, Urban Change and Poverty, the Committee on National Urban Policy examined the general state of U.S. cities and urban poverty. The findings were more hopeful than had been expected in certain areas of concern and more disturbing in others. On the hopeful side, cities as a whole were found to be less financially and economically distressed than one might have been led to expect by the rhetoric of urban crisis. A disturbing finding, however, was that poverty appeared to be worse in many large cities than it had been 10 and 20 years before. More significantly, poverty appears to be becoming more spatially concentrated in inner-city neighborhoods. Some analysts have concluded that an urban underclass consisting of persistently poor people is developing in U.S. cities. Our earlier report sug- gested that, at the least, poverty is an increasingly serious problem in cities. But we wanted to know more about the extent to which poverty is concen- trated in particular neighborhoods and the effects of this concentration on poor people themselves. With these and related concerns in mind, the committee undertook the current study, which examines the issue of concentrated poverty in U.S. cities. The committee was charged with four main tasks: describe the extent to which poverty has become concentrated in particular areas; identity causes of this concentration; . identify the consequences for the poor of living in areas of highly concentrated poverty; and analyze implications of the findings for national urban policy. 7

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8 INNER-CITY POVERTY IN THE UNITED STATES TRENDS IN URBAN POVERlY Since the early Woos the metropolitan areas of the United States have been the sites of most of the nation's growth in employment and income. American cities attracted those looking for economic opportunity and social advancement from the countryside and abroad (Kasarda, 1988~. Within metropolitan areas, however, people and jobs have been migrating to the suburbs and beyond since at least the 1920s (Hawley, 1956; Long, 1981~. Inner cities have declined in population, employment, and income relative to fast-growing suburbs. At the regional level, jobs and people have been shifting from the Northeast and the Midwest to the South and the West. The older regions have suffered especially from declines in manufacturing employment, as the growth of the economy has taken the form of increases in the production of information and other sentences (Garnick, 1988; Noyelle and Stanback 1984~. In recent decades, middle-income blacks and other minorities have joined better-off whites in moving to the suburbs. These demographic and economic trends have affected the socioeconomic conditions of cities, especially in the Northeast and the Midwest. The exodus from central cities that is, the largest cities of standard metropolitan statistical areas- has been only partially offset by in-migration, and most of those moving into large cities have been people with low incomes and minorities (Kasarda, 1988:~ble 12~. Gentrification that is, the influx of more affluent people- has been limited to a few neighborhoods in particular cities (Berry, 1985; Frey, 1985~. As a result, the proportion of the population living in large central cities has decreased nationally. Average personal income levels have dropped, and the proportions of city residents who are poor, unskilled, poorly educated, unemployed, and members of minority groups have increased relative to those living in the suburbs. For example, the ratio of average city income to average suburban income among families declined from 79e8 percent in 1970 to 76~5 percent in 1980 (Manson and Schnare, l985:1bble II- 4~. At the same time, the social structure of the city has also been changing: There are fewer employed men and more families headed by women, especially among blacks (Wilson and Neckerman, 1986; McI~nahan et al., 1988. By the early 1980s it was apparent that poverty had shifted from being a mostly rural to a mostly urban phenomenon. That shift did not mean that ~ There are large regional differences in these trends. It is the large central cities (and, in some cases, entire metropolitan areas) in the Midwest and the Northeast that are losing population and where the disparities between central cities and their suburbs are the largest. There is less disparity between central cities and suburbs in the South and the West where the population is increasing in central cities and central cities are able to grow through annexation.

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INTRODUCTION 9 the majority of the poor now lived in central cities, but that the central-city share had grown considerably. More than half of poor people in the United States (56 percent) lived outside metropolitan areas in 1959; less than a third (30 percent) did in 1985. In 1959, about 27 percent of poor people lived in central cities; by 1985, 41 percent did. The poverty rate, meaning the incidence of poverty in central cities, was 14.2 percent in 1970, reached 19.9 percent in 1982 during the recession, then declined to 18.0 percent in 1986. Central-city poverty rates are now higher than nonmetropolitan poverty rates (18.6 versus 16.9 percent in 1987), and more than double suburban poverty rates (8.5 percent in 1987~. GHETTO POVERTY The trends in central-city poverty described in the previous section tell only part of the story. The spatial organization of poverty within metropolitan areas and within cities adds yet another and we believe significant-dimension. Ghetto poverty, which is the proportion of poor people living in neighborhoods with very high poverty rates, has been increasing rapidly in many large metropolitan areas. The social conditions in urban ghettos, including crime, dilapidated housing, drug use and drug-related violence, problems related to out-of- wedlock births, and chronic unemployment have been well documented in the popular press. Many observers believe that extreme poverty in a poor person's neighborhood and the social disorganization associated with it exacerbate the problems of poverty and make it all the more difficult for individuals and families to escape poverty. In this section, we review the data on ghetto poverty and consider the possible consequences. The term ghetto has no official definition. As it is typically used in discussions of poverty, the term refers to inner-cibr neighborhoods with very high levels of poverty. Usually, but not always, these neighborhoods are predominantly black and Hispanic. We follow the convention adopted by Jargowsly and Bane in this volume and use census tracts as a proxy for neighborhoods.2 They define a ghetto as any neighborhood (i.e., group of census tracts) with an overall poverty rate of 40 percent or more.3 The ghetto poor, then, are poor people who live in a ghetto. The level of ghetto poverty is the proportion of the poor who live in ghettos. This proportion 2 Census tracts are areas defined by the Census Bureau, typically containing about 2,000 to 8,000 people. In a densely settled neighborhood, a census tract may be the size of four or five city blocks. 3Although the phrase "increase in ghetto poverty" is often assumed to mean the same thing as "growing concentration of poverty," the latter term may give a misleading impression. Ghettos in 1980 were typically bigger geographically but less densely populated than in 1970.

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10 INNER-CITY POVERTY IN THE UNITED STATES can be disaggregated by race, e.g., the level of ghetto poverty among blacks would be the proportion of black poor people living in ghettos. In 1980, there were 2.4 million poor people living in ghettos~.9 percent of all U.S. poor people.4 Thus, it is clearly not true that the typical poor person was a resident of an urban ghetto. Since many politicians, reporters, and members of the public seem to equate poverty with the black residents of urban ghettos, the relatively small size of this percentage deserves emphasis. The incidence of ghetto poverty varies sharply by race. In 1980, 2.0 percent of all U.S. non-Hispanic white poor people, 21.1 percent of all U.S. black poor people, and 15.9 percent of all U.S. Hispanic poor people lived in ghettos. Thus, nearly mro-thirds of the ghetto poor are black, and most of the rest are Hispanic. The level of ghetto poverty also varies by region. Within all U.S. metropolitan areas, 28 percent of black poor people lived in ghettos. In the Northeast, however, 34 percent of black poor people lived in ghettos, compared with 30 percent, 26 percent, and 11 percent for the North Central, South, and West regions, respectively. And 37 percent of poor Hispanics lived in ghettos in the Northeast, 21 percent in the South, and many fewer elsewhere. Ghetto poverty, and the social disorganization thought to be associated with it, are often said to be "exploding." The facts, however, create a different picture. The total number of poor people living in ghettos increased 29.5 percent, from 1.9 million in 1970 to 2.4 million, in 1980. However, the total number of poor people in metropolitan areas grew nearly as fast (23.5 percent). Thus, the increase in the level of ghetto poverty relative to overall poverty was more modest: among blacks, the level of ghetto poverty increased from 26.5 percent to 27.7 percent; among Hispanics, it actually decreased from 23.7 to 18.6 percent. This picture of a modest increase in ghetto poverty among blacks and a decrease among Hispanics seems at odds with common perceptions of a rapidly growing problem. The discrepancy can be resolved, however, by noting the tremendous racial, regional, and city-to~ibr variation in ghetto poverty. In the Northeast, the level of ghetto poverty among blacks more than doubled from 15 to 34 percent. In the South, it dropped from 36 to 26 percent. As a result of these regional shifts, the distribution of poor people living in ghettos changed substantially between 1970 and 1980. lo-thirds of the ghetto poor lived in the South in 1970. By 1980, the figure was less 4Since census tract data are only available from decennial censuses, the most recent data avail- able on ghetto poverty are for 1980. All data on ghetto poverty presented in this section are from Jargowsky and Bane; see their paper in this volume for details on data sources and methods.

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INTRODUCTION 11 than 40 percent. The proportion of poor people living in ghettos in the Northeast and the North Central regions, taken together, increased from 27 to 55 percent. Because the metropolitan areas in the North tend to be larger than metropolitan areas in the South, ghetto poverty also became more of a "big city" phenomenon. The proportion of poor people living In ghettos in metropolitan areas of more than 1 million people increased from 45 to 63 percent. Within regions, there was also city-to-city variation in the growth of ghetto poverty. In the New York standard metropolitan statistical area, which by 1980 contained nearly one-fifth of all U.S. ghetto poor, the level of ghetto poverty among blacks tripled: from 14.5 to 43.4 percent. In contrast, the Boston metropolitan area had a decrease: from 19.6 to 9.8 percent. Many cities in the South had decreases but remained at high levels; for example, in New Orleans ghetto poverty decreased from 49.7 to 40.7 percent. The increases in ghetto poverty did not occur because more poor people moved into fixed areas of cities. Rather, the geographical size of ghettos increased rapidly in many metropolitan areas. In some, even cities with decreases in ghetto poverty had an expansion of the ghetto area as measured by the number of census tracts with poverty rates greater than 40 percent; the expansion of the ghetto area was associated with general exodus from downtown areas. Both poor and nonpoor people moved out of ghettos and mixed income areas, perhaps trying to escape crime and a deteriorating quality of life. The nonpoor moved out faster than the poor, however, so the group left behind was poorer. As a result, many census tracts saw poverty rates rise to 40 percent and higher. Most often, then-new ghetto tracts were adjacent to the old ghetto tracts, so that the ghetto area seemed to expand outward from a central core. THE UNDERCI^SS HYPOTHESIS According to numerous journalistic accounts, social pathologies have increased among urban and (usually) young and minority poor residents. The problems highlighted in these accounts include involvement with illegal drugs, violent crime, dropping out of school, unemployment, welfare de- pendence, pregnancy among the teenage children of welfare recipients, and a disproportionate number of families headed by single women. (Chapter 2 deals with this issue in more detail.) Some scholars argue that these problems indicate the existence of a growing, largely black, underclass in inner-city ghettos. For example, Wilson (1987:49) argues: Inner-city neighborhoods have undergone a profound social transformation in the last several years as reflected not only in their increasing rates of social

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12 INNER-CITY POVERTY IN THE UNITED STATES dislocation (including come, joblessness, out~f-wedlock births, female-headed families, and welfare dependency but also in the changing economic class structure of ghetto neighborhoods.... The movement of middle~lass black professionals from the inner city, followed in increasing numbers by working~lass blacks, has left behind a much higher concentration of the most disadvantaged segments of the black urban population, the population to which I refer when I speak of the ghetto underclass. Wilson (1987:60) hypothesizes that this "higher concentration of the most disadvantaged segments of the urban black population" has resulted in "concentration effects," which exacerbate unemployment and other condi- tions associated with poverty. He cites as examples isolation from informal job networks, lack of exposure to norms and behavior patterns of the steadily employed, lack of access to effective schools, and lack of opportu- nity for women to marry men with stable jobs. While these observations are certainly provocative, the question of whether ghetto poverty actually causes the development of an underclass deserves more careful scrutiny. This volume directly addresses this issue. Does ghetto poverty in cen- tral cities cause or reinforce behaviors deemed socially unacceptable that, in turn, lead to long-term or persistent poverty among affected residents, especially among children? In other words, what are the relationships among several distinct dimensions of urban poverty: ghetto poverty, persis- tent poverty, and socially unacceptable behavior? Only some poor people remain poor for long periods of time; are they more or less likely than those who are poor for brief periods to live in very poor neighborhoods? Are people engaging in socially unacceptable behavior more or less likely to be persistently poor or residents of very poor neighborhoods? This report examines these questions in terms of currently available data and assesses their implications for policy. POLICY ISSUES This volume addresses three questions, the answers to which have significant policy implications: 1. ~ what extent is poverty increasing in urban areas, especially in central cities? Is ghetto poverty increasing as well? Who is affected? Is it a general phenomenon or rather confined to certain cities or regions? 2. Are there concentration effects i.e., is it worse to be poor in a very poor neighborhood than in another neighborhood? Is ghetto poverty fostering the growth of a new underclass that is not only poor and disad- vantaged but also distinct and deviant in its values and behavior? 3. If ghetto poverty is increasing in some areas, what is causing it to do so? Are there alternative explanations? Do government policies inad- vertently encourage ghettos to form, or do they result from broad economic

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INTRODUCTION 13 changes or from urban-level forces? Are there multiple causes, working in different ways in different cities? What are the policy implications of the increasing ghetto poverty in large cities? Does it require policies spe- cially designed or targeted for certain cities, or is it amenable to a general antipoverty strategy? In the next chapter Paul Jargowsky and Mary Jo Bane answer basic questions about the geographic location of ghetto poverty, the characteris- tics of poor people who live there compared with those in nonpoor areas, and trends in ghetto poverty during the 1970s. In Chapter 3 John Weicher provides a different view of ghetto poverty by following the fortunes of a set of persistently poor inner-city neighbor- hoods from 1970 to 1980 (and, for a more limited set of neighborhoods, from 1960 to 1980~. He analyzes population changes, compares the charac- teristics of the residents and housing at each census, and tests the association of changes in these characteristics with changes in metropolitan-level pop- ulation, unemployment, income, and job location (i.e., "suburbanization" of employment). In Chapter 4 Christopher Jencks and Susan Mayer evaluate the leading quantitative research studies of the erects of living or growing up in a poor rather than a nonpoor neighborhood in terms of several outcomes, including crime, teenage sexual behavior, school achievement, and labor market success. These studies, although plagued with data limitations and methodological shortcomings, provide some insight into the potential importance of the contextual effects of poverty on ghetto residents. Jencks and Mayer conclude with suggestions for research that would better answer questions about the significance and extent of concentration effects for policy makers. In Chapter 5 Jencks and Mayer evaluate the hypothesis that a growing number of urban jobs have relocated to the suburbs, while exclusionary housing practices have prevented blacks from moving out of inner-city neighborhoods. They also consider the related question of whether black workers who live in the suburbs find better jobs than those who live in inner-city neighborhoods. Finally, they compare the earnings of inner-city blacks who commute to the suburbs with the earnings of similar blacks who work in ghettos. In Chapter 6 Michael McGeary reviews the research on federal policies and programs, including policies against housing discrimination, transporta- tion programs, economic development, and educational welfare programs, examining them for evidence of their effects on ghetto poverty. In the last chapter the committee reviews the findings concerning the extent and nature of urban poverty, the relationship of ghetto poverty to the existence of an underclass, and the impact of ghettos per se on the

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14 INNER-C1IY POVERTY IN THE UNITED STATES individuals involved. It ends by discussing the possible implications of these findings for federal policy and makes recommendations for both policy and research. REFERENCES Berty, Brian J.L. 1985 Islands of renewal in seas of decay. Pp. 69-96 in Paul E. Peterson, ea., The New Urban Reality. Washington, D.C.: Brookings Institution. Clark, Kenneth B., and Richard Nathan 1982 The urban underclass. In Critical Issues for National Urban Policy: A Reconnaissance arid Ada for Further Study. Committee on National Urban Policy, National Research Council. Washington, D.C.: National Academy Press. Frey, William H. 1985 Mover destination selectivity and the changing suburbanization of metropoli- tan whites and blacks. Demog~a~y 22(May):~243. Garnick, Daniel H. 1988 Local area economic growth patterns: A comparison of the 198Os and previous decades. Pp. 199-254 in Michael G.H. McGeary and Laurence E. Lynn, Jr., eds., Urban Change and Poverty. Washington, D.C.: National Academy Press. Hawley, Amos H. 1956 The Changing Shape of Metropolitan Arr~rica: Deconcentration Since 1920. Glencoe, Ill.: Free Press. Kasarda, John D. 1988 Jobs, migration, and emerging urban mismatches. Pp. 148-198 in Michael G.H. McGeary and Laurence E. Lynn, Jr., eds., Urban Change and Poverty. Washington, D.C.: National Academy Press. Long, John F. 1981 Population Deconcen~ation u' the United States. Special Demographic Anal yses, CDS-81-5. Bureau of the Census. Washington, D.C.: U.S. Department of Commerce. McLanahan, Sara S., Irwin Garfinkel, and Dorothy Watson 1988 Family structure, poverty, and the underclass. Pp. 10~147 in Michael G.H. McGeary and Laurence E. Lynn, Jr., eds., Urban Change and Poverty. Washington, D.C.: National Academy Press. Manson, Donald B., and Ann B. Schnare 1985 Change in Be Ci~/S?~burb Income Gap, 1970-1980. November. Report for Urban Institute Project 3376. Washington, D.C: Urban Institute. Nathan, Richard R. 1986 The Underclas~ll It Always Be with Us? Paper presented at the New School for Social Research, New York. National Research Council 1982 Critical Issues for National Urban Policy: A Reconnaissance and AT for Further Study. Committee on National Urban Polipy. Washington, D.C.: National Academy Press. Noyelle, Thierry J., and Thomas M. Stanback, Jr. 1984 The Economic Transformation of American Cities. Totowa, NJ.: Rowman & Allanheld.

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INTRODUCTION 15 Wilson, William Julius 1987 The Truly Disadvantaged. The Inner City, He Underclass, and Public Policy. Chicago: University of Chicago Press. Wilson, William Julius, and Kathryn M. Neckerman 1986 Poverty and family structure: The widening gap between evidence and public policy issues. Pp. 232-259 in Sheldon H. Danziger and Daniel H. Weinberg, eds., Fighting Poverty: What Works and What Doesn't. Cambridge, Mass.: Harvard University Press.