State Poverty Figures Show Positive Trends, But Some Places Still Struggle

Poverty rates declined in 14 states and increased in just one last year, according to estimates the U.S. Census Bureau released on Thursday.

The statistics reflect the low unemployment and generally strong economy the U.S. has enjoyed in recent years. 

But other figures in the Census release show that annual incomes are still lagging behind pre-recession levels in some places and that 10 states had poverty rates of 15% or higher last year—indicating three or more of every 20 people in these places was struggling to get by.

Mississippi for the third year in a row was the state with the highest poverty rate, at 19.7%, just shy of the state’s 19.8% rate in 2017. New Hampshire had the lowest poverty rate in 2018, as it did in 2017. The poverty rate in the state checked in at 7.6% last year.

The American Community Survey estimates peg the national poverty rate at 13.1% for 2018, down from 13.4% the year prior.

The one state that saw its poverty rate increase from 2017 to 2018 was Connecticut. But the rate was still relatively low there last year at 10.4%. That was the 10th lowest rate among states.

Angela Rachidi, a poverty studies research fellow with the conservative-leaning American Enterprise Institute, credited the healthy economy for the declines in poverty.

“The overall trend is absolutely positive,” Rachidi said.

“But with that said,” she added, “Those who either cannot be connected to the labor market, or are not for whatever reason, there’s obviously still poverty there.”

David Cooper and Julia Wolfe, analysts with the left-leaning Economic Policy Institute, described the continued reductions in poverty rates for many states as good news, but also suggested that the figures showed a slowdown in progress reducing poverty.

They noted that 20 states had statistically significant declines in poverty between 2016 and 2017, compared to only 14 this year and that 38 states still had higher poverty rates in 2018 than in 2000. 

In addition to Mississippi, states with poverty rates in excess of 15% in 2018 included: New Mexico, Louisiana, West Virginia, Arkansas, Kentucky, Alabama, Oklahoma, South Carolina and Tennessee. The District of Columbia is also in this group with a poverty rate of 16.2%.

The data show that in at least nine states the annual median household income was at least $1,000 below where it stood in 2007, prior to the Great Recession, after adjusting for inflation.

Nevada had the biggest gap here. Median income in the state was estimated to be $58,646 in 2018, $8,060 below where it stood in 2007. 

Other states where the median income was down in 2018 compared to 2007 were Alaska, Connecticut, New Mexico, Florida, Indiana, Michigan, Louisiana and Arizona.

Reasons vary for why income increases may be sluggish in these places and could involve factors like how hard they were hit by the housing crash and demographics.

Rachidi noted that earlier in the recovery from the recession, middle and higher earners were more likely than those with lower incomes to see increases in their earnings. But more recently, she said, lower earners have achieved greater gains. 

“If you’re a state that has a disproportionate share of those in the lower income distribution,” Rachidi said, “that could be why they’re lagging in terms of median income.”

The poverty threshold the Census Bureau uses for the survey differs based on family size and other factors. But for a family of three, with one child under 18, it would have been around $20,000 last year. If the family’s income is below that level, they’re considered to be in poverty.

Oleta Garrett Fitzgerald, director of the Children’s Defense Fund’s southern regional office, said she was not surprised that Mississippi again had the highest poverty rate in the nation.

She emphasized that poverty is especially problematic for black families in Mississippi and in rural areas, where jobs can be scarce and unemployment rates are high. Poverty rates in some rural areas of the state can be 50% or higher, she noted.

There are many factors that drive Mississippi’s problems with poverty, which date back decades. 

“The state's economy for black people was first built on no pay and then the economic development strategy was low wage, low skill jobs. Manufacturing,” Fitzgerald said. As jobs have moved abroad, she added, “they haven't been replaced by anything."

The state, in Fitzgerald’s view, is failing to make needed investments so that kids from poor families have access to early childhood education and adequate health care.

"If their health care needs are not met and their early childhood education needs are not met, they are being sent on a pathway and a trek toward poverty,” Fitzgerald added. “Generational poverty can be curbed if we can educate our children out of it.”

Meanwhile, she said, in many cases parents in poor areas lack childcare and transportation options that would enable them to take and travel to jobs that are available.

Fitzgerald also believes state economic development efforts should be refocused more on local businesses and local job growth, rather than attracting companies that end up offering low wage work. 

Until then, she said, “our economic opportunity is going to be located in pockets around the state and in the other areas of the state we're going to be in abject poverty.”

A spokesperson for Mississippi Gov. Phil Bryant’s office did not return a call seeking comment on the Census Bureau figures.

Deb Polun is executive director of the Connecticut Association for Community Action, a group involved in anti-poverty programs in the state. She pointed out that Connecticut’s poverty rate had been gradually declining in past years, but had a notable dip in 2017, which could help explain this year’s 0.8 percentage point uptick.

“The main issue in Connecticut,” Polun said, “is that we lost high paying jobs during the recession and they’ve been replaced with lower paying jobs.”

There also are significant disparities between localities in Connecticut when it comes to poverty and income, Polun explained. For instance, Fairfield County, where the city of Bridgeport is located, is relatively affluent. But in the city itself poverty is a problem.

“We have these pockets of deep poverty in Connecticut,” Polun said. “You look at a city like Bridgeport, or Hartford, our capital city, and you’re looking at poverty rates that are probably triple what the town right next to it is,” she added. “Completely different worlds.”

A spokesman for Connecticut Gov. Ned Lamont’s office touted legislation the governor signed into law in May that will gradually raise the state’s minimum wage to $15 an hour. 

“This is perhaps one of the most impactful pieces of legislation for working families that a governor can sign,” said Max Reiss, the governor’s communications director. He said the pay floor increase promises to help lift more people out of poverty.

Thursday’s Census Bureau release also included data for metropolitan areas. 

The area that covers San Antonio, Texas had the highest poverty rate last year among the 25 most populous metros. It was 15.4%. Metropolitan areas that include Detroit, Houston and Miami trailed close behind with poverty rates of 14% or higher.

Although Washington, D.C. itself has a high poverty rate, the metro area that includes parts of Virginia and Maryland has one of the lowest in the country at 7.6%. The Denver area was almost as low, at 8%. 

Detroit officials noted that poverty estimates for the city had been declining for three consecutive years and that, over that same timespan, 45,000 Detroiters had moved out of poverty, as median household income in the city grew by 20%.

“Three straight years of progress is a good start,” Mayor Mike Duggan said. “But if we can continue our success in bringing new jobs to Detroit and to train Detroiters to fill those jobs, our future is bright.”