6 Special reportPoverty in America The EconomistSeptember 28th 2019
1F
or many, the stereotypical image of American poverty still re-
sembles the infamous Cabrini-Green Homes, a housing estate
completed in 1962 near the heart of Chicago. It became overrun by
gangs, drugs and violence. City police, in effect, ceded control.
This popular conception of poverty remains largely urban, black
and ghettoised. But the stereotype is outdated. The Cabrini-Green
estate, which once housed 15,000 people, is no more. The city fin-
ished demolishing it in 2011. The new neighbourhood is peaceful,
with low-slung apartments, a new school, playgrounds and green
space aplenty, alongside wine shops and cross-fit gymnasiums for
the millennial crowd. In 1981 Jane Byrne, then the city’s mayor,
moved into a Cabrini-Green building on 1160 North Sedgwick
Street to draw attention to high crime rates—only to turn tail and
flee a mere three weeks later. Today that address is an attractive
brick building overlooking an upmarket
bakery and a Starbucks coffee shop.
To see the changing geography of Amer-
ican poverty, go instead to Harvey, a small
suburban town of 26,000 just 20 miles (32
km) south of Chicago. Despite its proximity
to a large city, median household income is
an abysmal $24,343. After mismanage-
ment and missed bond payments, the city’s
finances are in freefall. One in four flats
now sits vacant. Nearly 36% of its residents
are classified as poor, higher than in many
of the poorest counties in eastern Kentucky
and the rest of Appalachia. Though Harvey
was never rich, that is a drastic increase
from the 22% poverty rate in 2000. And as
politicians, journalists and sociologists
continue to focus attention on the well-
known urban ghettos on the city’s southand west sides, few are taking note of the worsening plight of
places like Harvey or nearby Dolton, where concentrated poverty is
now just as bad.
After the demographic changes over the past decade, there are
now more poor people in Chicago’s southern suburbs than in the
city itself. The same is true for the rest of America: a poor person is
now much likelier to be found in the suburbs than in the big cities.
According to the census taken in 2000, 10.5m, or 31%, of all poor
people lived in the suburbs of America’s largest cities. The most re-
cent estimates from the Census Bureau show that the number of
poor people living in those suburbs has exploded to 16.3m, an in-
crease of 56%. Unlike urban poverty, which has long been associat-
ed with destitute blacks, suburban poverty is more pronounced
among poor whites and Hispanics.
The dire fortunes of Harvey illustrate the urgent problem of
modern poverty in America. It is not growing nationwide, but it is
evolving into something more virulent. The poor are increasingly
clustered together outside newly thriving central cities, and thus
out of sight. Being poor is difficult enough, but opportunities
dwindle if you live in a district of concentrated poverty (where
20% of neighbours live below the poverty line) or of extreme pov-
erty (where 40% fall below the threshold). Where you grow up af-
fects the trajectory of your life. Rising housing costs and income
inequality have made the problem worse. The number of Ameri-
cans living in concentrated poverty has increased by 57% since
2000, according to Elizabeth Kneebone of the University of Cali-
fornia, Berkeley. Because of the growth of concentrated poverty in
suburbs and small cities, a majority of poor Americans now live in
these distressed neighbourhoods.
Plot the rate of almost any social dysfunction—addiction,
crime, infant mortality, joblessness or mental illness—and you in-
variably reproduce the same map. The cumulative effect of these
overlapping disadvantages is worse than any individual one; con-
centrated poverty is more damaging than mere poverty. The clear-
est evidence comes from three economists—Raj Chetty, Nathaniel
Hendren and Lawrence Katz of Harvard University—who analysed
a randomised experiment in which some poor families were given
housing vouchers to move out of impoverished districts into low-
er-poverty ones. For children who moved to better neighbour-
hoods while young, the researchers found massive effects on an
array of long-term life outcomes. College attendance rates in-
creased by 16.5%; annual incomes as adults were 31% larger; wom-
en were 26% less likely to become single mothers.
Often, the effect crops up in unexpected ways. A study of black
children in Chicago by Rob Sampson, Patrick Sharkey and Stephen
Raudenbush, three sociologists, estimated the negative effect on
vocabulary and verbal ability from growing
up in the city’s most troubled areas as
equivalent to missing a year of school. Mr
Sharkey has found that the harms accumu-
late. Two consecutive generations in poor
neighbourhoods cause the measured intel-
ligence of children to drop by eight or nine
iq points. For a child of average intelli-
gence, the drop is equivalent to moving
from the 50th percentile to the 28th.
A more corrosive consequence of con-
centrated poverty, though harder to mea-
sure, is on feelings of hopelessness and de-
spondency. Poverty is more than just
physical deprivation. It is also psycholog-
ically debilitating—breeding constant
anxiety about the near future, and inuring
people to daily traumas, of hunger or vio-
lence or addiction. The temporary cogni-Outer-citypoverty
The most profound shift in American poverty is that it is beginning
to concentrate in the suburbsGeographical changesMoving to the outskirtsSource:ElizabethKneeboneanalysisofUSCensus
andAmericanCommunitySurveydataUnited States, people below the federal
poverty level by geography type, m0510151970 80 90 2000 10 17SuburbsSmall metro areasRuralLargecitiescrises like joblessness and drug addiction would be far worse. Hos-
pitals, schools and local government are often the largest provid-
ers of stable jobs. Medicaid, which was expanded in Kentucky
through Obamacare, pays for substance-abuse treatment in parts
of America hit hardest by the opioid epidemic.
The existence of poverty does not undermine the American
dream, but the persistence of it does. The safety net looks stuck in
time, even though the problem of poverty has evolved. And now
there is a new danger. Because of rising income inequality and
housing costs, poverty is moving out of cities and into suburbs,
where it is less visible. Poor white and Hispanic Americans are
much more likely to live in such places. Combating this looming
problem is not at the heart of any political agenda. That is unfortu-
nate and self-defeating. A wealth of economic and sociological
studies show that poor children who grow up in districts of con-
centrated poverty have profoundly worse life outcomes—their in-
comes sag, their health deteriorates and their family lives turn
dysfunctional. The job of the safety net is to arrest this cycle. If this
generation of poor children is to do better than the one before, the
net will need to become stronger still. 72