Penn StatePoverty
Povertyin America: One Nation, Pulling Apart

Poverty in America Today

The United States is a nation pulling apart to a degree unknown in the last twenty-five years. A decade of strong national economic growth in the 1990s left many of America's communities falling far behind median national measures of economic health. Despite the investments in transportation and public facilities infrastructures, massive movements of capital and people, and the expectations of most regional economists over the past forty years, the nation's regional development patterns are becoming more uneven. Income inequality is on the rise. The number of communities falling behind the national economic average is increasing. This tendency has been most pronounced in recent years, when trade liberalization and globalization have greatly opened the American economy.

According to our estimates in 2003, almost 25% of the nation's counties had low per-capita incomes below one half the national average or less, high unemployment, low labor force participation rates, and a high dependency on government transfer payments-all measures of economic distress. These communities are located in timber, agricultural, and mineral and energy resource areas in the nation and in regions of the Deep South including the Mississippi Delta, the eastern coal belt of Appalachia, historic New Mexican and Native American communities, and along our borders. More recently, newly distressed counties are experiencing the collapse of their post-war low-wage manufacturing economies. At a smaller spatial scale, communities in persistent poverty also are present in the nation's cities, where long-term decline has left core urban areas of cities such as Washington, DC, Detroit, Michigan, and Los Angeles, California with limited job opportunities, high levels of poverty, and populations with few effective means of economic advancement.

The problem of persistent poverty is a complex one that includes communities and individuals who, through no fault of their own, find themselves unable to make ends meet in this globalizing, information-intensive world. People at risk are women, children, and people of color, single-parent families, and the elderly. Large numbers of the nation's citizens live at or below the poverty threshold, which means each month is a struggle to pay the bills and provide the basics, including food, clothing, and shelter, not to mention access to health care and simple comforts. How can the richest country in the world still have more than 12% of its total population, and al-most 20% of all children under the age of 18, unable to meet, let alone be guaranteed coverage of, basic needs? Today, as a nation, we are significantly different than we were in 1960, when more than 20% of the population was visibly poor and lacked basic goods, including food, clothing, proper shelter, clean water, heating, health care, and access to decent schools. We are a more diverse population and a more dispersed population; we are older and remain divided by race, income, and location.

Certainly progress has been made over the intervening forty years in terms of an overall minimum standard of living as measured by material conditions. And yet the lived experience of poor people is starkly different from that of individuals and families who enjoy some degree of economic security as measured by income levels that pro-vide comfortable, worry-free circumstances. If anything, the gap between the economically secure and the poor is more severe than it was four decades ago. Increasingly, the nation is composed of persons who look to a future in which circumstances include the expectation of more wealth, security, and opportunity; and the alternative, those who struggle to make ends meet. In many families today, children cannot say they expect to be better off than their parents. This is perhaps the greatest challenge now facing our society. Forty years ago, public officials took a stand against economic deprivation. For a short period of time we made huge strides in reducing economic insecurity. America is again facing this serious challenge. Once again we can make a difference if we choose to look this issue in the eye and invest in people and communities.

Project Summary

This accelerated research, data development, and distribution research program provides new understanding of the manifestation, meaning, and causes of enduring economic distress. The meaning of distress can move from the abstract to the concrete through an empirical examination of the spatial distribution and enduring existence of economic distress. By combining statistical analysis with policy evaluation and historical assessment of previous policy efforts, this project is elevating the issue of community economic distress to a new level.

This project has reexamined community social and economic conditions nationwide, using a newly designed index of economic health and economic distress. The work was developed at a highly spatially disaggregated level (census tract and community/town level); building upon both the preliminary 2000 census results and a series of new databases that the project team developed for each decade since 1960.

The Spatial Distribution of Distress: Several reports examine the following research questions:

  • What explains the level and persistence of economic distress over the 1960-2000 period?
  • Are explanations for persistent distress the same or similar for longstanding distressed locations versus new entrants?
  • Are there obvious differences by region and by state?
  • Do these differences persist or change through time?
  • Are there substate regional spatial trends in the incidence of long-term economic distress? Have the patterns changed through time?
  • Does changing spatial scales highlight additional patterns of economic distress, such as that found in urban areas?

Policy Assessment and Evaluation: six reports provide details on the following questions:

  • To what degree was the historic policy problem of economic distress understood empirically and at what level of detail?
  • To what extent and how was policy shaped by differences in perceptions of the problem between the President and key members of Congress?
  • To what extent has welfare reform by default shifted the level of responsibility for economic distress alleviation to the state level?
  • What room, if any, is there to reformulate existing economic development policy to function with a greater sensitivity to persistent distress and new manifestations of distress over time? The Impact of Federal Funds
  • To what extent is there an historical spatial bias in expenditure levels based on size of population concentration and remoteness, economic base, region, and "capacity" of place? To what extent did federal expenditures vary both across place and time and in what ways?
  • What were the multiplier effects of federal expenditures? Were some places more likely than others to draw private sector expenditures in conjunction with federal dollars?
  • To what (if any) extent were federal expenditures correlated with changes in economic distress levels over time?
  • Are there obvious differences in the effect of expenditures based on the type of and timing of investment?

Work in this project has lead to the following deliverables:

  1. Extensive new analysis of the changing patterns of community economic distress that will show that we now live in "one nation, pulling apart".
  2. An attractive, highly readable Atlas of Community Economic Health and Distress in America.
  3. An analysis of the effect of federal expenditures on economic development in distressed communities, using a unique, previously un-analyzed database of project expenditures from both the Economic Development Administration and the Appalachian Regional Commission.
  4. A publicly accessible web site that contains data and tools developed in the project and is designed to assist communities in analyzing their own economic circumstances, links to information sources, and other relevant data sources for economic and social development.