A recently-issued study by the Federal Reserve Bank of Boston shows that poverty in the suburbs is far more pervasive in higher-income census tracts than previously thought.
The Fed’s most recent Community Outlook Survey spanned the six New England states, but the report’s authors chose to focus on two Connecticut tracts, New Haven and Hartford; results could be extrapolated across New England.
The lack of public transportation in the suburbs requires car ownership for each jobholder. The study’s authors pegged the cost of operation for one car at about $3,500 a year, or up to 56 cents a mile, representing 9 percent of the median moderate family income, which in Connecticut is $40,000 to $50,000. Multiply that $3,500 figure by the number of jobholders in a household and transportation represents a significant cost drag, taking resources away from other long-term goals such as emergency, college and retirement savings, and building home equity. Lack of affordable housing and the high cost of child care, pitted against the lack of high-paying jobs in the suburbs within economical commuting distance, is the study’s takeaway lesson.
An example: 68 percent of Hartford’s workforce commutes from outlying towns, and despite the existence of an extensive, economical bus network in Greater Hartford, most commuters must drive daily to their jobs.
Survey Said
In April of this year, a total of 175 service providers from the economic development, affordable housing, community action, human services and workforce development sectors in the six New England states responded to 24 multiple-choice and fill-in questions. The Fed asked respondents to comment on the changes in conditions over the previous six months of the polling period and to project changes over the next six months. The Fed cautioned that data collected represent the opinions of service providers who completed the survey.
In April, survey participants were asked three new questions: What proportion of their service communities are suburban; what are the top challenges facing lower-income suburban communities; and an open-ended question solicited input about other challenges these communities face. The responses serve as the primary sources of information for the report, the Fed said.
Kaili Mauricio, senior policy analyst for the Federal Reserve Bank of Boston, one of the report’s authors, says that challenges faced by lower income people in rich suburbs included lack of access to services, lack of political representation and perceptions of racism. The concern over lack of political representation came as a surprise; 57 percent of respondents ranked this concern as at least slightly important.
A Greater Urban Reach
Urban services, by contrast, are less expensive because they can serve a larger constituency within a smaller geographic area. “You don’t even realize those [urban] discounts exist,” Mauricio said. Urban commuters are nine times more likely to take public transportation than suburban jobholders. “Their income doesn’t change if they move, and a cost goes up,” he said. “They have to make some sort of sacrifice [to compensate].”
Study authors didn’t use the federal poverty level unless no other measures were available. “The federal poverty level is so low, it doesn’t reflect everyone that’s struggling,” Mauricio said. Instead, they used moderate family income, which in Connecticut is $40,000 to $50,000.
A total of 181,000 Connecticut families are lower income, with 100,000 living in officially designated lower to moderate income (LMI) tracts; 81,000 families live outside LMI tracts on less than $40,000 a year – this, in a state where 35 percent of census tracts have median family incomes exceeding $100,000, according to the report. On the flip side, many tracts have more than 10 percent of families with incomes under the moderate family income figure of $40,000. This creates a sort of vest-pocket poverty, which may escape the purview of service providers which could provide some financial relief.
An example: in Greater New Haven, about 23,600 families with children earn too much to qualify for government assistance, but too little to afford quality childcare. About 45 percent of these families live in one of New Haven’s three inner-ring suburbs, 30 percent in the Valley area and the remainder in the outer-ring suburbs. In Hartford, more than 46,000 families earn less than $40,000 annually, and 28,000 are in the non-LMI suburbs.
Median income in the state is $87,000, skewed by the state’s many high-income census tracts.
“Many people think that [$40,000 to $50,000 income] is good, but when we break down [living] costs, it actually strikes you what it costs to live in the suburbs,” Mauricio said.
The old saw that it’s not so much what one makes, but how much one gets to keep, has never been more apparent than here. The chart represents purchasing power.
The report doesn’t propose a solution, Mauricio said; it’s meant to be a conversation-starter about inequalities that will likely have downstream effects on the economic power of all the census tracts affected.
Email: coneill@thewarrengroup.com
