Magazine article Economic Trends

Urban Poverty in the Fourth District

Magazine article Economic Trends

Urban Poverty in the Fourth District

Article excerpt

Cleveland recently attracted national attention when the Census Bureau ranked its poverty rate the highest of any U.S. city with a population over 250,000. In part, Cleveland's worsening poverty rate reflects the harsh impact of the recent recession. However, the recession worsened poverty rates across the country to some degree. After trending downward for a decade, poverty rates in the U.S. and in all four Fourth District states began ticking up in 2000--in advance of the recession.

Compared to other District cities of similar size, Cleveland also fares poorly: In 2003, its 31.3% poverty rate was more than 10 percentage points higher than that of Cincinnati, the city with the second-highest poverty rate in the District. Cleveland's poverty rate was nearly double Columbus's 16.5% and Pittsburgh's 16.1%. The comparison to Pittsburgh is especially striking because the two cities have similarly high concentrations of manufacturing. Finally, Cleveland's poverty rate increase in 2000-03 was 14 times greater than the U.S. and seven times greater than Ohio. Cleveland's difficult passage though the recession is part--but not all--of the story.

Because city boundaries are historically determined, they do not usually encompass all relevant economic activity in a labor market. A more appropriate context for an area's economic information is the metropolitan statistical area (MSA), which is designed to capture most of an area's related economic activity and may span several counties. In this context, the Cleveland MSA looks fairly unremarkable and far more like its counterparts in the District.

Income differences between the city and the metropolitan area can be partly explained by educational attainment: On average, higher education levels are associated with higher earnings. In 2000, suburban Cleveland had double the central city's share of people with at least a bachelor's degree. …

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