“The ultimate left-behind places”: Widespread presence of “Persistent Poverty” in the U.S.

In the ongoing efforts to combat poverty in the United States since the 1960s, a recent analysis has revealed that approximately 35 million Americans, or nearly 1 in 10, reside in communities plagued by “persistent poverty.” This troubling statistic is 72% higher than previously estimated, as reported by the Economic Innovation Group (EIG). The analysis focused on areas where the poverty rate has remained above 20% for over three decades, examining poverty at the level of smaller geographic divisions known as Census tracts, rather than the broader county level. This approach provided a more accurate depiction of pockets of impoverishment that may go unnoticed at the county level.

For instance, although there are no counties in Maine, New Hampshire, or Vermont classified as persistently poor by certain measures, there are smaller Census tracts within these states that meet the criteria. These tracts are home to thousands of residents living in deep poverty, highlighting the need for attention and assistance.

“Left-behind places”

This analysis sheds light on overlooked regions in the United States that have been largely excluded from the significant economic growth experienced by the country over the past three decades. While persistently poor areas are often associated with long-standing economic deprivation, such as in Appalachia and the rural South, EIG’s findings reveal enduring poverty pockets in every state across the nation.

EIG’s Director of Research, Kenan Fikri, referred to these areas as “the ultimate left-behind places” and emphasized that they have remained impervious to multiple cycles of economic growth.

Fikri emphasized the importance of addressing these areas, stating, “If large tracts of the country are full of people not reaching their full potential, then the country as a whole isn’t reaching its full potential.”

In persistently impoverished communities, individuals may face challenges beyond financial poverty. Issues such as limited access to quality education, healthcare, and infrastructure can hinder progress for residents, regardless of their income.

Nationally, nearly 12% of Americans, roughly 38 million people, fall below the poverty line, according to Census data. Single adults earning less than $14,580 annually are considered poor, while a family of four earning less than $30,000 is also classified as poor based on federal guidelines.

“Economic or demographic shock”

Regions experiencing persistent poverty typically have been subjected to economic or demographic shocks that set them on a path of high poverty, with few interventions to counteract the trend, according to August Benzow, research lead at EIG. These shocks can vary, such as the decline of the coal mining industry in Appalachia or longstanding issues like racial segregation and limited access to capital in impoverished urban neighborhoods.

Despite the differences in the causes, these communities often share one common trait: once they enter a state of persistent poverty, climbing out becomes exceedingly difficult. The analysis found that only 7% of counties with poverty rates above 20% in 1990 managed to significantly reduce poverty while experiencing population growth by 2019. Most of these counties escaped persistent poverty due to exurban sprawl or growth in regional industries.

Fikri highlighted the challenge, stating, “Once it takes root, it can be very difficult to turn the tide.”

EIG’s research reveals that persistently poor communities remain deprived due to factors such as disconnection from regional growth, inadequate infrastructure, limited small business development, and a vulnerable tax base susceptible to local economic distress. Financial institutions and investors tend to avoid investing in these areas, leading to a lack of opportunities for businesses to start and individuals to purchase homes.

Benzow stated, “Once places become high poverty, financial institutions and investors tend not to invest in these places, and this creates a calcification or a lack of opportunity to where it’s much more difficult to start a business or to purchase a home.”

How to uproot poverty

Addressing the issue of persistently poor neighborhoods requires a multifaceted approach, according to EIG. “There is no single silver bullet to fix the issue,” emphasized Fikri.

Potential initiatives include investing in infrastructure, expanding broadband access, promoting workforce development, and improving education. Grant programs could provide support for these efforts, including childcare subsidies for parents re-entering or remaining in the workforce. EIG also suggests that the federal government could foster private-sector investment in these areas to attract capital and stimulate economic growth.

“There needs to be more investment, but it needs to be smarter,” Benzow added. He recommended that federal investment be more experimental and innovative.