Poverty Rates in United States

Urban poverty in America today In a country that boasts probably the highest standard of living in the world, one wonders why poverty-stricken areas still persist. Even poverty remaining about the same or decreasing slowly but surely would satisfy most Americans who do not want to hear about social problems anyway. Unfortunately, poverty rates are not declining, and impose a heavy burden on cities. According to the U.S. Department of Housing and Urban Development's report, cities face the triple threat of concentrated poverty that began two decades ago (The State of the Cities, 1998).

In fact, the poverty rate among children has increased from less than 17% in 1980 to more than 20% in 1990 (U.S. Bureau of the Census 1992 cited in Hao). Research on poverty by HUD has shown a great deal of evidence that being poor has serious consequences; severe social dysfunction such as violent crime and drug abuse, as well as family problems (The State of the Cities). For example, children who live in poverty, particularly persistent poverty, suffer significant disadvantages in physical and mental development as well as socioeconomic attainment in the future (Hao).

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According to the HUD's report, cities nowadays face three fundamental problems that cause urban poverty: job gap, education gap and housing gap. First of all, people in the cities need jobs. Although employment is increasing in the States, there are relatively few entry-level jobs in central cities. Moreover, employment opportunities for low-skilled workers are limited. According to the HUD report, the unemployment rate for central cities in March 1998 was 5.

3 compared with 3.9 % for suburbs (The States of the cities, 1998). In some cities, like New York, the unemployment rate was more than twice the rate of the suburbs. Furthermore, there is a wider wage gap in the cities over the past few years. Inequality in wage was so serious between the low-skilled workers and the high-skilled workers. According to the U.S. Department of Labor, the inflation-adjusted wages of low-skilled workers declined, whereas the wages of high-skilled workers increased over the past 2 decades (The States of the Cities, 1998). On the other hand, cultural factors played a role in the obvious inequality that existed between various racial groups (Cherry). Other economists also use the thesis to explain how structural characteristics of labor markets are responsible for racial wage inequalities (Cherry). Another point is lack of transportation access to suburban jobs. Many low-income workers do not have cars, and they all rely on public transportation. However, public transportation doesn't get people from the city to the suburban job areas. And many business start moving out from the central to suburban, this causes a serious problem to the low-income families. A safe and affordable child care is very important for parents who need to work. However, an affordable and safe child care is so limited. Low-income families who mostly concentrated in cities could not afford this service. According to the report, only 10% of families who qualify for Federal child care help. Many families are on the waiting lists for child care assistance (The States of the cities, 1998). Human capital has a significantly important impact on earning power of an individual. According to the HUD report, a 2-year post secondary degree raises earning by 20 % and a 4-year bachelor's degree by 40%, over a high school diploma (The States of the Cities). Unfortunately, people in low-income families do not have a lot of opportunities to receive higher education.

Another issue is the education gap. Education is an important factor for every nation. However, the quality of education in many urban schools is poor due to a low morale in these schools. About 70% of students in these schools are come from low-income families, and many inner-city students most likely come from single parent families and immigrants (The States of the Cities, 1998). Due to the poor quality in education, about 77% of the students in high poverty urban school failed to achieve basic competency levels in reading and 67% failed to achieve basic levels of competency in math (The States of the Cities, 1998). Because of this reason, dropout rate increase and school completion is very low in poverty urban school.The third issue is the housing gap. Although homeownership is high in United States, there are gaps between cities and suburban area. According to the annual report from The State of the Nation's housing 1997, people lives in the cities are less likely to own a house than people lives in suburban with the same income level. Furthermore, according to the data from the Harvard University Joint Center African-American households of all income level are less likely to own a home than white households of the same income level (The States of the Cities, 1998). The influx of African Americans into urban centers created disorganization in accordance with the "culture of poverty" thesis. And during the early days of the migration, blacks were treated unfairly. Prejudice does exist today. In contrast to white communities, the black communities never stabilized. They were never accepted into the larger society and so stayed segregated with little chance for growth. Therefore, it is hard for the black to apply for mortgage credit. Mortgage lending information by HMDA shows that minority households' reject rate for applying mortgage credit is higher than white households with same income level. On the other hand, a sharp decline in affordable rental housing stock and high number of homeless people make the case even worse. Although the issue suggested by the U.S. Department of Housing and Urban Development is significant to the urban poverty, the problem of urban poverty is clearly a racial one. Poverty is most flagrant in black areas due to earlier maltreatment of people in that racial group. It was further exacerbated when African Americans migrated to cities all throughout the country. When African Americans finally had access to the social service system, it was naturally abused because the black sector lacked good educational facilities and equal opportunity employment. This phenomenon is present throughout the United States. Thus, a national effort must be made to tackle the continuation of poverty.