Poverty in New York City, 2000:

Hispanics Make Dramatic Gains; for Blacks It's Business as Usual

CSS Data Brief #4
December 13, 2001

The latest data from the U.S. Bureau of the Census indicate that the decline in the national poverty rate evident since 1993 continued into 2000. The proportion of Americans living below the federally defined poverty line fell to 11.3 percent. This rate is statistically indistinguishable from the record lows in poverty set in 1973. For several demographic groups poverty rates dipped beneath their prior all-time lows. The Black poverty rate, for example, fell to 22.1 percent. And although Blacks continue to suffer a disproportionately high poverty rate, since 1993 the disparity between Black and Non-Hispanic White poverty rates has narrowed dramatically, from 23.2 percentage points to 14.6 percentage points. The poverty rate for Hispanics, at 21.2 percent, equaled - but did not fall below - its record low.

New York City followed some, but not all of these national trends. As illustrated in Figure 1, which tracks poverty in the U.S. and New York City over the recent business cycle, the citywide poverty rate remains dramatically higher than the poverty rate for the nation as a whole. Still, the city trend has largely paralleled the trend for the nation. New York's poverty rate declined from its mid-nineties highs, to 19.8 percent in 1999-2000. (Because of the limited sample size for New York City residents in the Census Bureau's Current Population Survey, data are reported as two-year moving averages).

Source: U.S. Bureau of the Census and CSS tabulations from the Current Population Survey.

Poverty by Race/Ethnicity

All of New York's race/ethnic groups did not share equally in this improved picture. Figure 2 depicts poverty rates for the city's largest race/ethnic groups, Non-Hispanic Whites, Non-Hispanic Blacks, and Hispanics.

• Poverty for all three groups rose with the economic contraction of the early nineties and fell as the economy heated in the latter part of the decade. By 1999-2000 poverty rates for Non-Hispanic Whites and Non-Hispanic Blacks had returned to their pre-recession levels, 9.1 percent and 26.4 percent respectively.
• Throughout the 1988-1989 to 1999-2000 period the deeply rooted disparity between Non-Hispanic White and Non-Hispanic Black New Yorkers remained firmly in place. Non-Hispanic Black poverty rates averaged 2.5 times Non-Hispanic White poverty rates. Rather than declining, as it did nationally, the Black/White disparity appears to have risen, from 15.3 to 17.3 percentage points.
• The trend in poverty for Hispanic New Yorkers stands in stark contrast to the other groups. Hispanics began the period as the poorest race/ethnic group in the city, with poverty rates over 10 percentage points above that for Non-Hispanic Blacks. From the mid-nineties on, Hispanic poverty fell dramatically and is now, at 28.8 percent, statistically indistinguishable from the Non-Hispanic Black poverty rate.

Source: CSS tabulations from the Current Population Survey.

An explanation of why Hispanic poverty fell much more rapidly than Non-Hispanic Black poverty in the later part of the 1990s is beyond the scope of this brief report, but it seems clear that Hispanics were able to take advantage of the city's expanding job market in ways that were not open to Non-Hispanic Blacks.

Is This as Good as It Gets?

The latest data put the New York City poverty rate just about where it stood before the last recession. What is likely to happen next? The significant decline in the citywide poverty rate was part and parcel of the rapid rate of job growth New York enjoyed in the second half of the 1990s. The near-term outlook is less rosy. By the spring of this year, the city economy was clearly cooling off. The summer months saw a decided weakening in the city labor market and a growing consensus that the national economy was headed for a recession. Yet, there was reason to believe that New Yorkers could avoid the kind of severe economic pain we had suffered in the early 1990s; many local forecasters were looking toward a mild recession at worst.

That hope was shattered in the human and physical devastation wrought on New York September 11, 2001. While a full accounting of the immediate economic dislocation from the terrorist attack is not complete, perhaps 100,000 jobs have already been destroyed. Many thousands more will soon be lost as the initial shock ripples through the local economy. The city economy is going to contract sharply and many of the recent economic gains made by low-income New Yorkers are going to be reversed.

At the end of several years of back-to-back record rates of job growth, one-in-five New Yorkers remained in poverty. For now, that is as good as it gets. The longer term outlook depends not only on billions of dollars the city will receive to aid its physical reconstruction, but also on the creation of a political will to rebuild a New York that offers greater economic opportunities for all. Programs that create jobs now are the immediate order of the day. Programs such as transitional, publicly subsidized employment are the place to begin.

Prepared by Mark Levitan, Senior Policy Analyst, mlevitan@cssny.org.

* The data in this edition of Brief #4 differ slightly from those reported in the Data Brief dated September 26, 2001. On December 5, the U.S. Bureau of the Census issued a corrected edition of its March 2001 Current Population Survey public use micro file, the source data for this Brief. The poverty rates provided in this Brief reflect that change. A description of the difference between the original and corrected files is available at www.census.gov.