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At the height of the 2008 financial crisis, New York City braced for a devastating blow—then seemed to duck it.
After the recession ended in late 2009, the city counted itself lucky for having avoiding the degree of pain that other Americans felt. Mayor Bloomberg has pointed with pride to the way New York weathered the downturn, boasting in his 2011 State of the City speech that “New York City entered a national recession later than the rest of the country and now, we have come out of it faster and stronger than the rest of the country.”
But new numbers suggest the city might have been more bruised by the bust than previously thought. Census Bureau data released Thursday revealed that the poverty rate in the five boroughs jumped from 18.7 percent in 2009 to 20.1 percent in 2010, while the rate of poverty for children rose from 27.1 percent to 30 percent.
Poverty rose nationwide from 2009 to 2010, with the rate rising to its highest level since 1993—the steepest post-recession rise in the poverty rate since the Vietnam War.
For the country’s poverty rate, it was the third straight year of increase. The city’s poverty rate had defied the national trend by remaining relatively flat—until now.
Officials ‘surprised’
Given the city’s good fortune through the worst of the recession, city officials on Thursday admitted to being “surprised” by the new numbers.
“We take these numbers seriously and we’re not shrugging them off,” Robert Doar, the commissioner of the city’s Human Resources Administration, said during a City Hall press conference. Doar added that he was “a little disappointed” with the new statistics.
The mayor, who five years ago pledged to make a “major reduction in the number of children, women and men who live in poverty in this city over the next four years,” and who has earned national recognition for his anti-poverty initiatives, did not attend the briefing. But Doar said that the administration was “not going to be daunted or discouraged” by the new poverty figures.
“It could be worse,” he contended, arguing that the relative strength of the city’s economy shielded it from even steeper increases in poverty.
The poverty rate among black New Yorkers rose from 21 percent to 23 percent, while that of Latino residents fell by less than a percentage point. Among the boroughs, only Queens posted a notable increase, said Mark Levitan, an official at the Center for Economic Opportunity that is spearheading the mayor’s anti-poverty effort. “Why that happened, I don’t know,” he said.
Adding some asterisks
While Levitan stressed that he was not “here to put lipstick on a pig,” administration officials took pains to place the numbers in context. Levitan said the rise in city poverty was not statistically different from the national poverty rate increase, and noted that New York’s poverty rate is still lower than that of most of the other top 10 largest U.S. cities and has grown less in the past year than Los Angeles (with a 1.8 percentage-point increase), Houston (2.2 points) or San Diego (3.1).
The Bloomberg administration has recently been using its own poverty index to account for long-acknowledged flaws in the official, federal measure of poverty. In the past, this city poverty statistic has shown a poverty rate higher than the federal measure. Levitan believes that the 2010 city-calculated rate will likely remain higher than the federal one, but will probably not rise as much from 2009.
It is common for poverty to increase in an immediate post-recession period, because the official end of a recession usually pre-dates an upturn in the labor market, because workers with lower-skills are the last to be rehired and because wages fall during recessions and take time to recover.
But Levitan indicated that it was difficult to reconcile the city’s relatively smooth ride through the recession with the sharp increase in poverty last year. “It may be the [Census release] is giving us a different perspective on the labor market,” he said. “There’s something in there that we ought to explore.”
“It goes to show,” Doar interjected, “how much worse it could have been.”
Impact on services
Department of Homeless Services Commissioner Seth Diamond said shelters were not seeing increasing indications of need, adding that the department received fewer applications for shelter this summer than it has since the summer of 2008. “The best way to fight homelessness is a job and we encourage everyone in shelters to work,” Diamond said.
A state court recently gave approval for DHS to terminate a program of rent supports for working families who have left shelters. The city moved to cut the program after the state cut its share of the funding and federal support disappeared.
Asked why the city’s welfare rolls were not reflecting the increase in poverty—HRA reported having about 43,000 fewer cash assistance cases in July than it had in January—Doar said his agency believes that people in need are combining what work they can find with programs other than welfare, like food stamps and Medicaid, to survive. “It’s really only after an extended period of difficulty that people go on welfare,” he added.
Advocates, however, have argued that HRA procedures discourage needy people from obtaining cash assistance.