Views: Fed Research Examines Poverty Concentrations in America

Concentrated poverty in America—those pockets of dense, crippling poverty exemplified by photos coming out of New Orleans after Hurricane Katrina—is the focus of new research from the Federal Reserve.

The report, The Enduring Challenge of Concentrated Poverty: Case Studies from Communities Across the U.S., highlights themes that are common in all of the low-income communities that were studied: lack of human capital development, high unemployment and inadequate housing. However, concentrated poverty occurs in varying social and economic contexts and the need for tailored strategies to tackle the problem is clear, according to the report.

The Federal Reserve collaborated with the Brookings Institution’s Metropolitan Policy Program to study the issue. While concentrations of poor people living in poor neighborhoods have been observed in large cities, concentrated poverty also exists in smaller cities, immigrant gateways, suburban municipalities and rural counties. The resulting report contains case studies, undertaken by the Federal Reserve System’s Community Affairs Offices, of 16 high-poverty communities.

One of the case studies focuses on Holmes County, Miss., located in the Federal Reserve’s Eighth District. With a poverty rate that stood at more than 41 percent in 2000, Holmes County is both geographically and economically isolated.

While the communities were diverse, four common factors emerged: poverty became concentrated over time, and decades of disinvestments are difficult to turn around; residents are often isolated from the larger community, and local organizations lack the resources to meet the community needs; many of these neighborhoods experienced significant demographic changes, such as an increase in immigrant households, a rise in single-parent families, or both; and, these communities exist in both weak and strong regional economies.

High-poverty communities included in the report are: Albany, Ga.; Atlantic City, N.J.; Austin, Texas; Blackfeet Reservation, Montana; Cleveland, Ohio; El Paso, Texas; Fresno, Calif.; Greenville, N.C.; Holmes County, Miss.; Martin County, Ky.; McDowell County, W.Va.; McKinley County, N.M.; Miami, Fla.; Milwaukee, Wis.; Rochester, N.Y.; and Springfield, Mass. The report’s findings will help the Federal Reserve in its ongoing work with community development partnerships in these areas.

Read the full report. Single copies of the publication are free from: Publications, Mail Stop 127, Federal Reserve Board, 20th and C Streets, N.W., Washington, DC 20551; or by calling 202-452-3245.

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