Progress Illinois

Declining poverty rates and nationwide efforts to decentralize poverty caused the urban poor population to fall by 27 percent during the 1990s. Unfortunately, the economic downturn of the Bush years has reversed those trends.

According to a comprehensive new study by the Brookings Institution's Alan Berube and Elizabeth Kneebone, the number of tax filers nationwide living in areas with high rates of working poverty jumped by 40 percent between tax years 1999 and 2005. During the same period, 34 large metropolitan areas experienced increased rates of concentrated working poverty (calculated by the share of Earned Income Tax Credit filers in communities with a high percentage of working poor). By contrast, 24 areas showed declines.

Cities in the Midwest and Northeast are experiencing the highest increases:

Detroit and its suburbs in 2005 had the highest concentrated working poverty rate in the Midwest: 27.5 percent, followed by St. Louis (21.6 percent), Cleveland (21.5 percent) and Chicago—plus its Illinois and Northwest Indiana suburbs—at 17.9 percent. The highest rate in the Northeast was the Philadelphia metropolitan area, at 25.5 percent.

As the landscape in Chicago demonstrates, this problem isn't limited to the inner city.

According to Brookings, five additional suburban ZIP codes now have high rates of concentrated working poverty -- in Riverdale, Harvey, and Hammond, among others -- compared to a net gain of one in Chicago proper. Several ZIP codes in the Chicago region crossed more intermediate thresholds of working poverty between TY 1999 and TY 2005 too, with 20 or 30 percent of their filers now receiving the EITC, many of which fall in the inner suburbs.

The new data indicates that the United States by no means solved the problem of concentrated poverty during the Clinton years. The working poor remained susceptible to economic fluctuations. As a result, the slumping economy -- spurred by the dot-com bust and 9/11 and followed by a slow recovery under President Bush -- led to much of the regression. And the problem has likely gotten worse since 2005:

Poverty rates in this study predate the arrival of $4-a-gallon gas, higher unemployment rates and three years of food inflation, all of which would certainly paint a gloomier picture. "Given the backsliding evident by 2005, and the weak economic forecasts ahead, it seems likely that we will finish the current decade having ceded some of the 'stunning progress' against concentrated poverty we achieved during the prior decade," the authors concluded.

For more, read the entire report (pdf).