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Summary This study explored the extent and location of ghetto poverty as well as the question of whether poor people living in ghettos are worse off than poor people living elsewhere. By ghettos we mean inner-city neighborhoods with overall poverty rates of 40 percent or more; the ghetto poor, then, are poor people living in a ghetto. The results of our analyses do not necessarily indicate that living in such areas makes poor people worse off than they would be otherwise- but neither do they suggest that living under such conditions does not matter at all. FINDINGS Extent and Location of Ghetto Poverty In 1980, there were 2.4 million poor people living in ghettos~.9 percent of all U.S. poor people. Among these people, there is tremendous racial, regional, and city-to-city variation. 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 two-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 1
2 INNER-CITY POVERTY IN THE UNITED STATES elsewhere. From 1970 to 1980 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. In 1970, two-thirds of the ghetto poor lived in the South; by 1980, the figure was less 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. Within regions, there was also city-to-city variation in the growth of ghetto poverty. In the New York metropolitan area, which by 19$0 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. What appears to be a national trend of increasing geographic concen- tration of the poor living in large cities was actually occurring in only a few places. In some large cities, ghetto poverty was small and did not grow dur- ing the decade of the 1970s. Other cities began the 1970s with substantial concentrated poverty, which then declined over the next 10 years. Effects of Living in Ghettos Does living in a ghetto in itself exacerbate the problems associated with being poor? Does ghetto poverty feed on itself? The social condi- tions in such areas including crime, dilapidated housing, drug use and related violence, problems related to out-of-wedlock births, and chronic unemployment may simply reflect the large numbers of poor minorities who end up living there and the problems they have regardless of where they live. The increase in ghetto poverty may also be a symptom of other changes for example, the increasing residential mobility of nonpoor minorities and economic trends that adversely affect minorities with low education and skill levels who were already more likely to live in ghettos. 1b assess whether living in a ghetto in itself makes poverty worse, one must compare the people who live there with poor people who live in areas with less severe poverty say, areas with less than 20 percent poverty. Poor people in the high-poverty census tracts of the 50 largest cities in 1980 experienced higher rates of unemployment than the poor living in areas with less severe poverty; they were also more dependent on welfare and more likely to live in single-parent households. These differences relative to the rates suffered by similar poor people living in areas with less severe poverty were of moderate to substantial size.
SUMA{4RY 3 Decennial census data cannot rule out systematic unmeasured differ- ences between poor people living in ghettos and those living in areas with less severe poverty. For example, poor people who end up in ghettos may be relatively poorer (that is, further below the poverty line) and may be able to find housing only in the worst areas. Studies of neighborhood effects, (reviewed in Chapter 4), which properly control for the prior differences between those moving in and out of neighborhoods of differing economic and racial composition, have found a significant unexplained residual ef- fect on some types of behavior. Although this effect can be attributed to neighborhood influence, the magnitude of most such effects, where they exist, is usually modest relative to effects of other individual characteristics, especially race, gender, and levels of education and job skills. The research literature provides some evidence that neighborhood effects are stronger for children, although this evidence is not strong. The effects of living in a poor neighborhood on a number of behaviors of interest have not been extensively examined: Examples are the cog- nitive development of preschool and grade-school children, sexual and family formation practices, the transition to employment, and school at- tendance habits of high-school-age youth. Nevertheless, the main point is that children who are minority members, poor, or raised in female-headed families dependent on welfare typically fare poorly in school, marriage, and employment wherever they live. The underlying processes associated with trends in poverty concen- tration also vary by location. Analyses in Chapters 2 and 3 reveal that the performance of the metropolitan economy, rates of in-migration and out-migration of poor and nonpoor people, and changes in racial and household composition played different roles in each city in affecting the concentration or Reconcentration of poverty within certain neighborhoods. Larger (exogenous) economic and social forces affecting local economies, population mobility, and social structure were more closely associated with changes in poverty concentration than size or density of place. Historically, federal policies and programs have had the effect of concentrating povertr in certain areas. First, they have encouraged trends favoring the suburbanization of higher-income people relative to lower- income people, contributing to the residual concentration of the poor, many of them minorities, in large cities. Second, they have encouraged the development of new areas in the South and the West relative to the older, developed metropolitan areas in the Midwest and the Northeast, with the unintended consequence of increasing poverty in the large central cities in those regions. In addition, some federal programs, such as high-rise public housing projects, have had the direct effect of concentrating poverty. After 1968, fair housing laws helped nonpoor minorities to leave ghetto areas, which also contributed to the dramatic increase in concentrated
4 INNER-crIy POVERTY IN THE UNTrED STATES poverty among inner-city minorities during the 1970s. Some federal policies intended to increase the mobility of the poor, such as housing vouchers and mass transit subsidies, have not had the desired effect due to residential or income segregation. CONCLUSIONS On the basis of these findings, the committee reached four major con- clusions. First, recent trends in gheno poverty are best understood for policy purposes as symptoms of broader economic and social changes For example, cross-tabular analysis in Chapter 2 of characteristics associated with differ- ent degrees of change in the concentration of poverty in different cities indicates that cities with rapid growth in concentration also experienced increases in the poverty rate, while cities with slow or negative growth in concentration simultaneously experienced reductions in poverty. This asso- ciation was observed even in cities with very high levels of concentration. The multivariate analysis in Chapter 3 confirms that favorable economic trends in the metropolitan economy that is, reductions in poverty rates- had a positive impact on the economic fortunes of households in ghettos. Accordingly, the committee believes that developments in the national economy are consequential in determining the extent of ghetto poverty. Ghetto poverty, like other types of poverty, could be reduced by national demand-side policies that stimulate gains in economic productivity and sustained economic growth. During the first two decades after World War II, poverty rates in the United States were cut nearly in half because of high rates of employment and economic growth. In the decade after 1973, however, slow economic growth increased unemployment and reduced gains in family income. The poverty rate, which is very sensitive to the unemployment rate, also increased during that period and is still relatively high. In a persistently slack economy, workers with the fewest marketable skills and least education are the least likely to be employed. A lower unemployment rate would reduce the number of people in poverty. At least some of these would be poor people living in ghettos, although the benefits of macroeconomic growth probably would not apply proportionately to central cities and suburbs. Second, many ghetto residents would fare poorly in any job market. The analyses in Chapter 3 indicate that the characteristics of the population were a factor in increasing poverty and unemployment in ghettos. In addition to lacking education, skills, and work experience, many household heads living in ghettos are women with young children who need extensive support services, especially day care. Some ghetto residents would not be prepared to take full advantage of tight labor markets. It would take
SUMMARY s additional efforts to help this group become productive workers, whom employers will hire at wages high enough to make economic self-sufficiency possible. The characteristics of poor and unemployed people living in ghettos suggest that policies aimed at enhancing their employability and productivity would effective complement policies focused on increasing employment opportunities. Such policies need not be specially developed for, or targeted on, ghetto residents; they can instead grow out of broader-based efforts to develop the human capital of poor and disadvantaged people. Such policies include a broad range of investments in education, health (especially preventive programs), and employment and training programs for young people and adults. Careful analyses and evaluations of such programs indicate that at least some of them (state work-welfare experiments are a good example) are demonstrably effective and deliver benefits that exceed their costs. But these programs will not work miracles. Even in effective programs, benefits are usually modest and at best will achieve small but steady improvements in economic self-sufficiency, not dramatic reductions in poverty or welfare receipt. But effective programs often cost more money than elected officials have been prepared to raise. Governments intending to dent the problem must be prepared to invest current resources in the hope of long-term payoffs. Investments in education, health, and employment and training programs are an important part of a policy that addresses poverty, including ghetto poverty. Third, current antipoverty programs and policies meet with special prob- lems in ghettos. These programs may not be designed to deal with such a high concentration of poverty, and poor people living in ghettos may have less access to them than they would have if they lived in nonpoor neigh- borhoods. The committee believes that discriminatory barriers preventing mobility to better neighborhoods should be deliberately undermined by federal policies and programs, for example, through full enforcement of fair housing, equal access, and other nondiscrimination laws and regula- tions, enabling people to leave ghettos if they choose through programs such as housing vouchers and fair-share housing construction throughout metropolitan areas. A strategy to enhance the mobility of ghetto residents cannot, however, solve the problem of ghetto poverty by itself. It depends on where the poor who move end up. Simply hastening the emptying out of ghettos through residential mobility would not have much impact on the fortunes of poor people who had lived there. They would continue to face problems because of their low levels of education, skills, and work experience; poor health and disabilities; teenage and single parenthood; and racial discrimination.
6 INNER-CITY POVERTY IN THE UNITED STAINS They would still have problems with access to affordable health care, day care, and transportation. Increased mobility may also have the unintended effect of spreading ghetto poverty to adjacent areas. Most of the growth in concentrated poverty between 1970 and 1980 occurred through the addition of new ghettos in a few cities, and most of those were contiguous to the ghettos that existed in 1970. Because of these problems with and limitations to enhanced mobil- ity as a strategy for reducing ghetto poverty, the committee stresses the importance of macroeconomic policies and human capital investment in proposed solutions. Fourth, additional research on the causes and effects of gfeno poverty is essential to increasing the government's ability to design and administer policies and programs that are more effective with respect to poverty and its consequences. The committee was not able to study the effects of federal programs on poverty concentration in great detail, and there are knowledge gaps even in issues that were carefully examined. The knowledge base for policy making needs to be improved.
