Concentrations of Poverty and Distressed Neighbourhoods in Canada - January 1997

2. Setting the Context: A Review of USA Literature

2.1 Concentrated Poverty

The major study of spatial concentrations of poverty in the USA is Paul Jargowsky's, Poverty and Place: Ghettos, Barrios, and the American City.² Jargowsky provides two key definitions of different aspects of this issue:

1. The Neighbourhood Poverty Rate - which is "the percentage of a metropolitan area's total population that resides in high poverty census tracts."
2. The Concentration of the Poor - which is "the percentage of a metropolitan area's poor population that resides in high poverty neighborhoods."³

In earlier studies with Mary Jo Bane, Jargowsky also established what has become the commonly accepted definition in the USA of a "high poverty census tract" as one with 40 percent or more of its population living in households with incomes below the USA poverty lines.⁴

Using these definitions Jargowsky has determined, based on 1990 USA census results, that about 4.5 percent of the population of the USA's tracted urban areas lives in census tracts where 40 percent or more of the population is poor and that of all poor persons living in tracted urban areas, 17.9 percent live in tracts where the poverty rate is above the 40 percent threshold. The first of these percentages represents the neighbourhood poverty rate for all tracted urban areas; the second represents the concentration of the poor in high poverty tracts.

The comparable percentages in 1980 were 3.3 percent and 13.6 percent respectively, indicating an increase in both the neighbourhood poverty rate and the concentration of the poor over the decade.⁵

The 40 percent threshold was chosen by Bane and Jargowsky because "visits to various cities confirmed that the 40 percent criterion came very close to identifying areas that looked like ghettos in terms of their housing conditions [and] ... corresponded closely with the neighborhoods that city officials and local Census Bureau officials considered ghettos".⁶

2.2 Distressed Neighbourhoods and the Concept of an Underclass

The term 'underclass' was popularized by the journalist Ken Auletta in three articles published in The New Yorker magazine in 1981.⁷ It refers to concentrations of behaviour widely considered to be at odds with mainstream values and norms in combination with widespread and persistent poverty.

Six years later in The Truly Disadvantaged, William Julius Wilson presented evidence that the number of neighbourhoods in inner-city Chicago exhibiting concentrations of these characteristics was growing, and presented a coherent hypothesis about why and how what this paper will describe as "distressed neighbourhoods" emerge and the risks they pose for self-perpetuation of both income poverty and underclass behaviours.⁸

In brief, what Wilson described was a complex process, beginning with a sharp decline in employment opportunities for unskilled male workers in inner-city areas of large Northeastern and Midwestern USA cities, and ending with concentrations of census tracts in such areas which suffer from a 'social isolation' which tends to perpetuate their disadvantaged condition.⁹

In an article for Jencks' and Peterson's The Urban Underclass, Wilson summarizes the effects of this process as follows:

Social isolation deprives residents of inner-city neighbourhoods not only of resources and conventional role models, whose former presence buffered the effects of neighborhood joblessness, but also of ... cultural learning from mainstream social networks that facilitates social and economic advancement in modern industrial society. The lack of neighborhood material resources, the relative absence of conventional role models, and the circumscribed cultural learning produce ... concentration effects, that restrict social mobility. Some of these outcomes are structural (lack of labor force attachment and access to informal job networks), and some are social-psychological (negative social dispositions, limited aspirations and casual work habits.)¹⁰

In Wilson's view, what distinguishes what he terms the underclass and, by extension underclass neighbourhoods, from those which are merely economically disadvantaged "is that their marginal economic position or weak attachment to the labor market is uniquely reinforced by the neighborhood or social milieu."¹¹ Thus, a process which begins with labour market dislocations arising from forces outside the neighbourhood is sustained and perpetuated by the secondary effects of this dislocation on its social capital as those who exemplify and maintain mainstream values, institutions and behaviours move out and those lacking such attributes move in; attracted by relatively low rents and acceptance of such behaviours as crime, out-of-wedlock childbearing and a casual attachment to steady paid work. In such an environment, such values as graduating from high school and marriage before childbirth receive less and less reinforcement from the community and become increasingly uncommon, further eroding prospects for upward social mobility.

Defined in this way, the identification of underclass as distinct from high poverty census tracts has posed severe challenges for researchers. Some of the key data which would identify "underclass" neighbourhoods such as violent crime rates, drug abuse and rates of out-of-wedlock childbirth are not available on a census tract basis either in the USA or in Canada.

Perhaps the most careful attempt to find suitable and statistically measurable indicators of "distressed neighbourhoods" afflicted by the syndrome described by Wilson has been made by Erol Ricketts and Isabel V. Sawhill. In their article, "Defining and Measuring the Underclass"¹² they adopt four proxy indicators of the presence of an underclass. These are very high incidences of:

1. High school dropouts (the proportion of 16 to 19 year olds who are not enrolled in school and are not high school graduates);
2. Prime-age males not regularly attached to the labour force ( the percentage of males 16 and over who worked for pay less than 26 weeks in the previous calendar year);
3. Welfare recipients (the percentage of households receiving Aid to Families with Dependent Children or state or municipal public assistance); and
4. Female lone parents (the percentage of households headed by female lone parents).

Ricketts and Sawhill defined 'very high' as a rate more than one standard deviation beyond the mean for all urban census tracts.

Based on data from the 1980 USA census, Ricketts and Sawhill identified 880 census tracts meeting this criterion for all four indicators. These tracts contained 2,484,000 people or 1.37 percent of the total USA population in census tracts and about 5 percent of the poor population in tracted urban areas. These percentages are markedly lower than the neighbourhood poverty rate (3.3 %) and the concentration of the poor (13.6%) identified in 1980 by Jargowsky. This is because many extremely poor tracts do not meet the criteria for social distress identified by Rickets and Sawhill.

As expected, there was a high degree of correlation between their "underclass" tracts and tracts with a poverty rate equal to or greater than 40 percent, but "39 percent of all underclass tracts are not in areas of extreme poverty, and 72 percent of extreme poverty tracts are not underclass tracts."¹³ Interestingly, the rates of "underclass" behaviours were almost identical for the underclass tracts and for the extreme poverty tracts with the exception of the high school dropout rate which was 36 percent in the underclass tracts, but only 19 percent in the extreme poverty tracts.

Using a definition of underclass tracts as those characterized by the simultaneous presence of high incidences of a range of behaviours opposed to mainstream values, it would appear that the last of these behaviours to erode in high poverty tracts is obtaining at least a high school diploma. Once the high school dropout rate goes well above the national urban mean, the tract appears to have crossed a threshold where obstacles to upward social mobility may become self-perpetuating.

It should be noted here that, while he shares Wilson' s analysis of how concentrations of high poverty census tracts emerge and their injurious social and economic impacts on their inhabitants, Jargowsky rejects the notion of a spatial underclass mired in a self-perpetuating cycle of disadvantage. "The idea that such neighbourhoods have become self-sustaining enclaves?with a 'culture of poverty' and a separate, totally disconnected underclass?is not supported by the data. A self-sustaining neighbourhood culture implies that census tracts with extremely high rates of poverty would respond slowly, if at all, to increased economic opportunity." However, Jargowsky found that the number of such tracts decreased sharply "in regions experiencing economic booms such as ...the Southwest in the 1970's and the Northeast in the 1980's." His multivariate regression analysis also revealed that "neighbourhood poverty declines as the overall metropolitan mean income rises."¹⁴ In other words, high poverty areas share in the good times of the metropolitan areas of which they form a part, but expand spatially as the metro area goes into recession.

Wilson would accept the primacy of the general opportunity structure as the major cause of what this paper describes as "distressed neighbourhoods" rather than a pure "culture of poverty" approach. In The Truly Disadvantaged he is careful to state that the injurious effects of the social isolation he describes as a consequence of the deteriorating opportunity structure do "not imply self-perpetuating cultural traits." What happens, he contends is that "some cultural traits may in fact take on a life of their own for a period of time and ... become a constraining factor...in the life of certain individuals and groups within the inner city." But this effect need not be a permanent or even a long-term one.

As economic and social situations change, cultural traits, created by previous situations, likewise eventually change, even though it is possible that some will linger on and influence behavior for a period of time. Accordingly, the key conclusion from a public policy perspective is that programs ... should place primary focus on changing the social and economic situations, not the cultural traits, of the ghetto underclass.¹⁵

As long as one focuses on poverty and labour market attachment, Jargowsky and Wilson are thus in fundamental agreement. Reverse the economic and social situations that created concentrations of poverty and sooner or later the behaviours which reinforce and perpetuate the effects of those primary causes will also change.

However, as Ricketts and Sawhill point out, some extremely poor neighbourhoods suffer much less from key indicators of social distress than others and some neighbourhoods which are not extremely income poor exhibit high concentrations of all these indicators. In this sense, at least, such things as neighbourhood effects exist.¹⁶ Moreover, it seems plausible to assume that a key factor determining whether income poverty is associated with other indicators of social distress is the level of social capital, as defined by Wilson, neighbourhoods have been able to accumulate and sustain.

Of course the level of social capital itself can be heavily influenced by the state of the local economy and the degree to which policies such as social housing, discrimination and neighbourhood rent structures tend to concentrate the poor. But it may not be fully determined by them.

Thus, it appears worthwhile to study both concentrations of income poverty and their trends and concentrations of other indicators of social distress. Through the first we gain an understanding of the context for the formation of distressed neighbourhoods and through the second we may be able to identify the factors that encourage or act as counterweights to their formation given high rates of income poverty.

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² Paul A. Jargowsky, Poverty and Place: Ghettos, Barrios and the American City, (New York, 1996), Russell Sage Foundation.

³ Ibid. p. 20.

⁴ See Paul A. Jargowsky and Mary Jo Bane, "Ghetto Poverty in the United States, 1970-1980" in Christopher Jencks and Paul E. Peterson (Editors), The Urban Underclass (Washington, 1991), The Brookings Institution, pp. 235-273.

⁵ See Jargowsky, p. 34.

⁶ See Jargowsky and Bane, p. 239.

⁷ See the New Yorker, November 16, 23 and 30, 1981.

⁸ See William Julius Wilson, The Truly Disadvantaged: The Inner City, the Underclass and Public Policy, (Chicago, 1987), The University of Chicago Press.

⁹ This conclusion is given indirect support by Jargowsky's finding that " the primary factors behind the increasing concentration of poverty are metropolitan economic growth and the general processes that create and sustain segregation by race and class." See Jargowsky, p. 185.

¹⁰ W.J. Wilson, "Public Policy Research and The Truly Disadvantaged" in Jencks and Peterson, op.cit, p. 463.

¹¹ Ibid. p. 474.

¹² See Erol R. Ricketts and Isabel V. Sawhill, "Defining and Measuring the Underclass" in Journal of Policy Analysis and Management, Volume 7, No.2 (1988), pp. 316-325.

¹³ Ibid. p. 322. Italics in the original article.

¹⁴ Jargowsky, p. 186.

¹⁵ Wilson, The Truly Disadvantaged, p. 138. Italics in original.

¹⁶ It could be, of course, that some high poverty neighbourhoods do not exhibit other indicators of distress because many of their poor residents have only recently moved into the neighbourhood.