Press Release

Statement: Poverty Declined In New York City For Fifth Straight Year But Census Data Fails To Capture Devastating Economic Impact Of COVID-19

According to the latest American Community Survey (ACS) data released yesterday by the US Census Bureau, the poverty rate in New York City fell from 17.3 percent in 2018 to 16 percent in 2019. This is the fifth consecutive year of declining poverty in the city. In 2019, 1.3 million New Yorkers lived at or below the official federal poverty level, about 117,000 fewer people than the year before.*

Unlike most years, however, these results tell us little about the current grim state of our city. Over the last six months, a pandemic and recession have devastated the local economy and laid bare longstanding inequities across the city’s communities and neighborhoods. Whereas New York City’s official unemployment rate in August 2019 was 3.8 percent, in August 2020 it quadrupled to 16 percent, among the highest rates in the US. Since the start of the pandemic in mid-March, 1.8 million New Yorkers have filed for unemployment, including an estimated 41 percent of all workers in the Bronx, according to one recent study.

The 2019 ACS paints a picture of the city before the pandemic, which includes both encouraging signs of progress and disturbing evidence of distress. Most importantly, these data suggest that stronger anti-poverty policy measures are needed now more than ever, not only in alleviating suffering and hardship but also to further the pace of economic recovery.

In 2019, the city’s overall poverty rate declined, but racial disparities persisted, many of which have been exacerbated by the coronavirus pandemic. New Yorkers of color in 2019 continued to experience poverty at disproportionately high rates: in 2019, 20.9 percent of Latinx and 20.5 percent of Black residents lived in poverty, double the share of White residents.

That said, the 2019 data showed some important signs of progress. Latinx New Yorkers saw the largest single-year decline in poverty rates (down three percentage points from 2018). Poverty rates among other vulnerable groups, such as immigrants, children, households headed by single mothers, and those with less than a high school education, also fell to their lowest rates in more than a decade. Poverty among immigrants was 15 percent, down from 17.8 percent in 2009 (when the city entered the Great Recession). In 2019, less than a quarter (22.2 percent) of the city’s children lived in poverty, down five percentage points from 27.1 percent in 2009. The poverty rate among single female headed households was 33.9 percent, a five-percentage point decline from 2009 when about 39 percent of these households were in poverty. Among residents without a high school degree, the poverty rate was 28 percent, down from 30 percent in 2009.

This decline in poverty was accompanied by an increase in median household income. Adjusted for inflation, the median household income grew by 7.2 percent to $69,407 in 2019. Despite the remarkable expansion in the median household income, New York City continues to be the most unequal among all large cities in the country. The top five percent of New Yorkers received 28 percent of all incomes generated in the city, while the bottom 20 percent received a mere two percent. Increases in the minimum wage, which was raised to $15 for all eligible workers in the city by the end of 2019, provided a much-needed boost to incomes of the low-wage New Yorkers.  

Another bright spot is that between 2015 and 2019, the uninsured rate in New York City dropped from 9.3 to 6.9 percent, meaning that nearly 200,000 New Yorkers gained health insurance coverage. Importantly, between 2018 and 2019, the number of New York City children with coverage increased significantly. Three policy decisions are vital to these important coverage gains: first, New York established a state-based Marketplace that ensures consumers are enrolled in either public or private coverage at an affordable cost; second, New York launched the Essential Plan, which provides no-deductible coverage for under $20 a month coverage to nearly 800,000 New Yorkers; and third, New York has invested in a robust Navigator in-person enrollment program. But this progress is threatened by loss of job-based insurance for those effected by the COVID-related economic downturn and the lack of federal relief for states and localities. 

Unfortunately, the current recession is erasing most of the gains described above. Immigrants and workers without college degrees have been hardest hit by widespread business closures and job losses in the low-wage leisure, tourism and hospitality sectors. While the city had added almost a million jobs over the last decade, it had lost around half a million of them by August 2020, with a majority of losses concentrated in these low-wage sectors. The lowest income New Yorkers were twice as likely as those with the highest incomes to lose income since the start of the pandemic, according to the most recent data from the US Census Bureau’s Household Pulse Survey data. Sixty-three percent of New York state residents living in households earning less than $25,000 annually reported that they or someone in their household lost employment income since mid-March, compared to those 30 percent of those in households earning $200,000 or more.

The 2019 ACS reflects a troubling long-term dynamic around housing: rising incomes remain eclipsed by rising rents. In 2019, the median gross rent in New York City edged up another one percent (in inflation-adjusted terms) to $1,483. Even after adjusting for inflation, the median gross rent in 2019 was 22 percent higher than it was in 2007, prior to the Recession, but median household income rose by just 16 percent over this period. The rent burden—the typical share of their income that New York City tenant households pay in rent—dipped again slightly in 2019 to 30.1 percent. But rent burdens among the most vulnerable renters remain elevated. While down slightly from about 79 percent in 2018, 78 percent of renter households earning under $35,000 a year spent 30 percent or more of their income on rent in 2019.

Since the pandemic, these dynamics have only gotten worse. While enhanced federal unemployment and stimulus checks helped cover the income gap for a time, and while the court’s eviction moratorium has prevented legal evictions from proceeding, many tenants who lost income face an even deeper housing crisis than the one facing them when the ACS was conducted. As of mid-to-late August, 38 percent of renters in New York state who reported loss of employment income in their household since the start of the pandemic said that they had little to no confidence in paying next month’s rent, according to the most recent Household Pulse Survey data. This means that roughly 906,000 renters in New York State are at risk for losing their homes.

In order to address the multiple hardships faced by low-income New Yorkers during this recession, New York City and State, as well as the federal government, must take a robust stance in combatting inequality and alleviating poverty. At the federal level, we must pass the HEROES Act to close state and city budget shortfalls, extend the enhanced federal unemployment benefits that expired at the end of July, and invest in cities’ health and recovery. At the state level, we must pass a genuine eviction moratorium that keeps people in their homes and prevents further economic and public health disasters. At the city level, programs like the Right to Counsel, Fair Fares and public assistance must be expanded to cushion the blow of the pandemic. With many New Yorkers impacted by income reductions and personal loss, these important programs are more widely and urgently needed than ever.

 

 

*For a two-adult, two-children family, the federal poverty threshold for 2019 was $25,926.

 

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