Nation's Poorest Cities Struggle Despite Benefits of Strong Economy
By Lori Wright, Media Relations
February 13, 2008
New research from UNH shows that the nation’s poorest cities experienced
a substantial drop in poverty rates during the economic boom from 1992 to 2003,
but not enough to lift them out of their relative positions as the most impoverished
communities in America.
The research suggests that economic development efforts focused on growth
can help reduce poverty, but that the underlying factors affecting urban poverty
will have to be changed to fundamentally to address poverty in high poverty-rate
And now that the national economy is in a down-turn, metropolitan areas with
high poverty rates -- such as Detroit and El Paso, Texas -- that did not improve
relative to other metropolitan areas during the economic "good times" will
be the same ones with the greatest difficulties during these national economic "bad
times," according to Ross Gittell, James R. Carter Professor of Management
The research is conducted by Gittell and Edinaldo Tebaldi, former assistant
professor of economics at UNH now at Bryant University. It looks at whether
the strong economy in the 1990s affected poverty rates in American cities.
The findings are presented in the most recent issue of Economic Development
Quarterly in the article “Did a Strong Economy in the 1990s Affect
Poverty in U.S. Metro Areas? Exploring Changes in Poverty in Metropolitan
Areas Over the Last U.S. Business Cycle, 1992-2003.”
“Over the last business cycle in the United States, there was significant
decline in poverty rates in metro areas across the nation. The decline in poverty
was broad and was greatest in the metro areas with the highest poverty rates
at the beginning of the business cycle,” Gittell said.
“Yet the relatively strong economy that prevailed in the last business
cycle did not move the metro areas with the highest poverty from their position.
The underlying factors affecting metro area poverty will have to be changed
to more fundamentally address poverty in high-poverty-rate metro areas. Reliance
on changes in the macro economy will not be sufficient,” he said.
The researchers found that several factors reduced poverty rates in urban
areas: levels of education, technological specialization, and the concentration
of employment in finance and government sectors. They also found that urban
areas with a high percentage of Hispanics and foreign-born residents experienced
increases in poverty rates from 1992 to 2003. This phenomenon disappeared or
substantially diminished, however, in urban areas with a high proportion of
people with college education.
High educational levels were the most important factor in reducing urban poverty. “Metropolitan
areas with a more highly educated population reduce poverty faster than do
metropolitan areas with a less well-educated population,” Gittell said.
In addition, urban areas with a high concentration of employment in financial
services and government saw poverty rates drop more than other areas. According
to Gittell, this may be caused by employment opportunities being available
to a broad cross section of urban residents or enhanced availability of government
and financial services.
Technology-intensive metro areas reduced poverty more than other metro areas,
suggesting that the economic dynamics of technology centers may be favorable
to populations in poverty.
“The benefits of technology-based economic growth might reach the poor,
promoting an increase in personal income, which can reduce poverty rates. However,
the drop in the poverty rate also could result from significant in-migration
of higher income residents into tech poles,” Gittell said.
Gittell has conducted extensive research about urban poverty, income inequity,
social capital, and the economy broadly. He is the author of “Community
Organizing: Building Social Capital as a Development Strategy” (Sage
Publications, June 1998) and “Renewing Cities” (Princeton University
Press, October 1992).