America's Best Kept Secret: Rising Suburban Poverty

By Michelle Hirsch, The Fiscal Times

28 December 11

or years, the food pantry in Crystal Lake, Ill., a bedroom community 50 miles west of Chicago, has catered to the suburban area’s poor, homeless and unemployed. But Cate Williams, the head of the pantry, has noticed a striking change in the makeup of the needy in the past year or two. Some families that once pulled down six-figure incomes and drove flashy cars are now turning to the pantry for help. A few of them donated food and money to the pantry before their luck soured, according to Williams.

"People will shyly say to me, ‘You know, I used to give money and food to you guys. Now I need your help,’" Williams told The Fiscal Times last week. "Most of the folks we see now are people who never took a handout before. They were comfortable, able to feed themselves, to keep gas in the car, and keep a nice roof over their head."

Suburbia always had its share of low-income families and the poor, but the sharp surge in suburban poverty is beginning to grab the attention of demographers, government officials and social service advocates.

The past decade has marked the most significant rise in poverty in modern times. One in six people in the U.S. are poor, according to the latest census data, compared to one in ten Americans in 2004. This surge in the percentage of the poor is fueling concerns about a growing disparity between the rich and poor - the 99 percent versus the 1 percent, in the parlance of the Occupy Wall Street movement.

But contrary to stereotypes that the worst of poverty is centered in urban areas or isolated rural areas and Appalachia, the suburbs have been hit hardest in recent years, an analysis of census data reveals. "If you take a drive through the suburbs and look at the strip mall vacancies, the ‘For Sale’ signs, and the growing lines at unemployment offices and social services providers, you’d have to be blind not to see the economic crisis is hitting home in a way these areas have never experienced," said Donna Cooper, a senior fellow at the Center for American Progress, a progressive think tank.

In the wake of the Great Recession, poverty rolls are rising at a more rapid pace in the suburbs than in cities or rural communities. Between 2000 and 2010, the number of suburban households below the poverty line increased by 53 percent, compared to a 23 percent increase in poor households in urban areas, according to a Brookings Institution analysis of census data.

Last year, there were 2.7 million more suburban households below the federal poverty level than urban households, according to the Bureau of Labor Statistics. That was the first time on record that America’s cities didn’t contain the highest absolute number of households living in poverty. There are many reasons for the dramatic turnabout in the geographic profile of poverty.

"Now, the economy tanks, they lose their jobs, they’re poor, and they’re out in the suburbs on the edge once again."

While many once depressed urban areas are being revitalized in an effort draw in more affluent residents, other areas are attracting lower-income families who have moved to the suburbs in search of more affordable housing and better schools. This shift in low-income families to the suburbs coincided with a move of low-wage, low-skilled jobs to those same suburban areas between 1970s and early 2000s, experts say. Meanwhile, the introduction of new commerce and high-cost housing in the urban neighborhoods pushed overall prices upward, providing added incentive for low-income people to head for the suburbs.

"These are families that were living on the edge in the city, but in many cases over the last 20 to 30 years, regained some stability when they found affordable housing in the suburbs," said Cooper. "Now, the economy tanks, they lose their jobs, they’re poor, and they’re out in the suburbs on the edge once again."

Both urban and suburban America were badly hammered by the financial meltdown and recession – leading to stubbornly high unemployment, widespread foreclosures and "underwater" homes, high food and gas prices and sharp cutbacks in government and private social services. But the overall impact has been worse in suburban areas, because many low-skilled jobs disappeared along with the plants and businesses that once provided employment. Other companies shifted their business strategy towards developing a high-skill, high-tech labor force.

To be sure, the picture of poverty in American suburbs is an uneven one. According to the census analysis, some suburban regions took bigger economic hits than others. Poverty rolls increased 121.8 percent in the Atlanta suburbs between 2000 and 2010, compared to a 6.8 percent increase in the city. Chicago and Seattle saw similarly large suburban-urban splits in poverty. The poverty rate increased by 76.3 percent in the Chicago suburbs compared to only 9.7 percent in the city during that period. In Seattle, the number of people living below the poverty line rose 74.4 percent in the suburbs versus 26.1 percent in the city proper over the decade.

The number of students qualifying for subsidized lunches grew by 63 percent this year, compared with a 46 percent increase in 2006.

The 10-year surge in suburban poverty is putting enormous budgetary pressure on county and local governments and non-profits, which are struggling to meet a rising demand for social services, counseling and financial assistance. The number of students qualifying for subsidized lunches in Conyers, an Atlanta suburb, grew by 63 percent this year, compared with a 46 percent increase in 2006. Many suburban areas of Columbus, Ohio, have also seen their subsidized lunch enrollment more than double over the past five years, the Columbus Dispatch reported earlier this year.

According to a separate 2010 census analysis from the Brookings Institution, the typical suburban nonprofit in the Los Angeles, Chicago, and Washington, D.C. regions reported about a 30 percent increase in demand for their services between 2008 and 2009 and substantial increases in the number of clients with no previous connection to social service programs. Nearly half of the nonprofit organizations reported a loss in key revenue during that time frame.

"This is a shift that’s happened over time, steadily over the last 10 years, and for reasons in addition to the recession," said Elizabeth Kneebone, a senior research associated at Brookings who compiled the data. "Even if the recovery were to take hold tomorrow, I wouldn’t expect this to reverse."
In Gwinnett County, a suburb of Atlanta, a ballooning foreclosure crisis is forcing once middle and upper-income residents into poverty. One in 183 housing units received a foreclosure filing in November, compared to a national average of one in 579 units, according to RealtyTrac.

"People spent beyond their means without learning to save, so when everything came crashing down there was no reserves."

A nonprofit called The Impact! Group handles about 60 percent of the county’s caseload of homeless individuals in need of temporary housing to help them get back on their feet. Tom Merkel, president and CEO of the group, and his 10 staffers almost exclusively served individuals with four and low-five figure salaries five years ago. Today, Merkel says, his caseload has doubled, and spans the socioeconomic ladder, with an ever-increasing number of once middle and upper-middle class families.

"We have people that were making six-figure salaries, doctors and lawyers who lived in nice homes on golf courses, knocking on our door," Merkel told The Fiscal Times. "People spent beyond their means without learning to save, so when everything came crashing down there was no reserves." In the Seattle suburbs, the challenges of a burgeoning refugee and immigrant population are compounding economic pressures. In King County, which takes in both Seattle and neighboring suburbs like Kent, half of the population growth over the last two decades has come from immigrants and refugees, said Chandler Felt, King County’s demographer. The vast majority of those new foreign-born residents have settled into South King County suburbs, including Kent, instead of in Seattle to take advantage of more affordable housing, Felt said.

The surge in refugees and immigrants from East Africa, Eastern Europe, and Southeast Asia settling in Kent has made the community more culturally diverse, but it’s also helped push the poverty rate to 25 percent, compared to 9 percent ten years ago, said Katherine Johnson, the city’s housing and human services manager.

"All of a sudden, the resettlement agency’s finished with you six or eight months after you arrive, you’re not able to find a job, and you’re just starting to learn the language and assimilate," Johnson said. "The next thing that happens is you have eviction notices, your utilities are turned off, and you have no finances to speak of." The city has seen thousands of cases like that, she said. "The food pantry here is a very popular place."

For Williams in Crystal Lake, the pantry’s growing traffic has meant food vanishes more quickly. Two or three years ago, a food drive’s proceeds would last four or five months, but now that food is out the door in two to three months. The rising demand has led Williams and her board to dip into their savings by $35,000 to keep dispensing basic food items like butter, cheese, milk, and eggs.

"Every day, it gets just a little clearer that people’s ideas of who a hungry or poor person is should be changing," Williams said. "It’s not just people pushing shopping carts along the street in a place like Crystal Lake…. Sure, people may still have their Lexus, but what lots of people don’t realize is that in lots of cases, [the car] is one step away from being repossessed."