Press Release
Statement: Poverty declines in New York City for fourth consecutive year, but rising rents continue to outpace income growth
The poverty rate in New York City fell from 18 percent in 2017 to 17.3 percent in 2018, its lowest level in more than a decade, according to the American Community Survey (ACS) figures released yesterday by the US Census Bureau. This is the fourth consecutive decline in poverty. In 2018, 1.4 million New Yorkers lived at or below the official federal poverty level ($25,465 for a family of four). That’s about 98,000 fewer people in poverty from the year before. The drop in the poverty rate from 2017 to 2018 was statistically significant.
The improved local economy continues to be a key factor in the shrinking number of New Yorkers living in poverty. In 2018, the city experienced strong job growth, adding roughly 88,000 jobs between January 2018 and December 2018. As of August 2019, there were 891,000 more jobs in New York City than there were at the same point in 2010. The citywide seasonally adjusted unemployment rate now stands at 4.2 percent, down from 9.3 percent in 2010. However, job growth continues to be concentrated in low-wage service industries such as home health care and food services, where median annual earnings are just $25,750 and $26,900, respectively.
Among racial and ethnic groups, African Americans and Latinos continue to be disproportionately impacted by poverty. The poverty rate is highest among Latinos (24.2 percent). In contrast, the poverty rate was 20 percent among African Americans, 15.4 percent among Asians and 11 percent among whites. Meanwhile, households headed by single mothers had a poverty rate of 35.7 percent in 2018, but this rate is down from 38.9 percent the previous year and is now below pre-recession levels.
The economic recovery only explains part of the continued decline in the poverty rate in New York City. In recent years, progressive government policies such as minimum wage increases at the state level have also helped raise incomes and lift families above the poverty line. In New York City, employees working at firms with more than 10 employees now receive a $15 minimum wage, up from $8.75 in 2015, while those employed by smaller firms have a minimum wage of $13.50. By the end of this year, employees across firms of all sizes will receive a $15 minimum wage. The most recent data from our annual Unheard Third survey shows that the working poor are reaping the benefits of a higher minimum wage: 41 percent of working poor respondents said that they were better off from recent minimum wage increases, a notable increase from 26 percent in 2017, when we first asked this question.
Other recently enacted progressive policies, such as the expansion of paid sick days in New York City, paid family leave in New York State, and the right to predictable schedules for the city’s fast food and retail workers, have helped improve job quality and protect low-income workers’ basic rights. Overall, 3 out of every 10 working poor New Yorkers we surveyed said that they are feeling optimistic about their prospects for upward mobility, up from less than a quarter (21 percent) who felt this way in 2015.
Despite higher employment and steady increases in the minimum wage, working poor New Yorkers are still financially insecure. Many are living from paycheck to paycheck: half of the working poor said that they worry all or most of the time about having enough money to pay their bills.
In a strong economy, one would expect incomes to rise faster than rents, but this is not the case. After adjusting for inflation, median household income in New York City edged up 2 percent from 2017, from $62,366 to $63,799 (this change is statistically significant) and is now 8 percent higher than it was prior to the recession. However, the gain in median household income has not kept up with the continued rise in the median gross rent, which increased another 2 percent (in 2018 dollars) from $1,413 in 2017 to $1,443 in 2018 and is now 21 percent higher than the pre-recession level. Given persistent income stagnation, it is unsurprising that rent burdens—the typical share of their income that New York City tenant households pay in rent—remain elevated at 31.4 percent. As a result, housing hardships are common among the working poor—nearly a third (31 percent) of working poor respondents we surveyed said that they fell behind on their rent or mortgage in the past year.
This year’s strengthening of rent stabilization and tenant protection laws should slow the rate of rent increases on regulated apartments in the city, especially once a family moves out of an apartment and another moves in. But in the long run, the new laws aren’t likely to cause rents to rise any more slowly than incomes for most people, so the need for affordable housing and rent subsidies for the households with the lowest incomes will continue to grow. And since laws don’t enforce themselves, we still need to expand the city’s Right to Counsel law that provides lawyers to tenants facing eviction in housing court.
Making the city’s public transit system more affordable can also reduce the economic hardships faced by New Yorkers in poverty and help them move up the economic ladder. The Fair Fares program, which was funded in the FY 2019 city budget, provides half-price MetroCards for New York City residents living below poverty. Fair Fares can make a big difference for the 38 percent of working poor New Yorkers who said that they often cannot afford subway and bus fares. Despite the enormous promise of Fair Fares, the program’s rollout by the de Blasio Administration has been slow. To date, 75,122 New Yorkers out of an estimated 700,000 eligible New Yorkers, have enrolled in Fair Fares.