Tuesday, July 15, 2014

Census Bureau Report Profiles Poverty

James Robson and Mark Knold, Senior Economists

A recently released U.S. Census Bureau report looks at poverty change across the United States, and it naturally shows poverty rose in Utah between 2000 and 2010. We say naturally because there were two national recessions that affected Utah during that decade, with the latter-half’s Great Recession being the nation’s worst economic setback since the 1930s Great Depression. Recessions reduce employment which in turn reduces income, and that increases the number of people with economic adversities. So the rise in poverty, though not welcome, is not a surprise. The report shows that all sections of the country saw poverty levels rise over the last decade, so this is not an isolated Utah issue.

Unlike in past decennial Censuses, the “2010 Census” is not a snapshot taken from a long-form survey on April 1, 2010. Instead, that data comes from the Census Bureau’s ongoing substitute, the American Community Survey, and the survey years used and averaged as the “2010 Census” cover 2008-2012. As that data spreads across a five-year period, the “2010 Census” measure covers the entire scope of the Great Recession—but not the recovery thereafter.

In a recent Deseret News article, this rise in poverty between 2000 and 2010 in Utah was noted. It then opined in relation to the current Utah employment growth and this rise in poverty; “Apparently, the poor are not getting many of the new jobs…”  Unfortunately, that is a mismatched statement. Utah’s strong economic jobs rebound has covered the last three years (2012-2014), with only 2012 having any overlap with the 2010 Census poverty measurement. Poverty measurements are a lagging statistic. In other words, we don’t have poverty measurement numbers yet that cover the period of Utah’s current job growth (2012 to the present). So to say that the current job growth is not benefitting the poor is to not properly match statistical data with the right time periods. Any statement on the poor and current job growth cannot be made until we have poverty measures that will cover the recent three years—and they will not be available for several more years.

One benefit of the Census Bureau report is that there is detailed information. One piece of depth shows census tracts where 20 percent or more of the population is poor. These are called high poverty areas. The attached map shows high poverty tracts across Utah. Most of the data can be taken at face value, but there is an occasional quirk. For example, in Salt Lake County, the area surrounding the University of Utah is a high poverty area. This is due to a college student population who are more focused on education than maximizing income. On paper, their income will label them as poor, yet their overall financial resources may not warrant them being in this category. The same caution can be applied in Utah County surrounding BYU and Logan with USU.

Poverty is not a welcome part of any community. Only a flourishing economy can reduce this obstacle; but even then, it takes time. Utah’s current job growth may not yet be deep enough to significantly lift the poor, but if prosperity continues, the setback of the Great Recession will eventually be reduced. Though we don't have the most current poverty rates, what we do have are improving indicators that signal economic progress—strong job growth, falling unemployment, and reduced public assistance caseloads. These point to an improving story about the economic well-being of Utah's families.

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