Economics

Poorest Cities In America

Most of these most impoverished metropolitan areas are located in the south of the US.

A Metropolitan Statistical Area (MSA) is a geographical entity that is delineated by the Office of Management and Budget. It will consist of at least one county and will be a core urban area with at least a population of 50,000. The list appended to the bottom of this article is of the 10 poorest MSA’s defined by per capita annual GDP in the United States. Economic, demographic and geographic factors will all contribute to these areas having such a concentration of poverty. They are all metro areas that each display similarly disadvantaged rates of poverty, with combined high rates of unemployment and low rates of post-secondary education. The jobs that are generally available therein are not high earning ones, and do not demand the possession of a college degree. Demographically, there is a higher than average proportion of minority populations and immigrants, particularly those from Hispanic family backgrounds. One other commonality that is striking is their geographical location. All of these ten urban areas are located along the south of the United States. 6 are in Florida, 2 in Arizona and 2 in Texas. Both metro areas in Texas making the list are right at the very Southern end of the state by the Rio Grande, and Prescott and Lake Havasu are both in the southern part of the state of Arizona.

Measuring Low Income Urban Areas

According to the US Government Census Bureau, the national poverty rate in 2014 was 14.8%. This is defined as a comparison of the household income measured against a set threshold level determined by the Census. If the income exceeds the threshold, then it is deemed that a household is not in poverty. Sebring, Florida, the poorest Metro area by per capita income in the United States, had a poverty rate of over 20% from 2009-2013. For a two-person household, the 2015 poverty threshold is $15,930, up from 2014 when it was $15,730. The highest poverty rate in 2014 in any one area was 34% in McAllen, Texas, which is also included in the list.

Disparities in Regional Poverty Trends

Poverty rates as a national average have remained relatively constant for the past five years, according to the Census data. A paper written just before then cited that poverty trends in 2005 showed a decline in levels for US citizens born within the United States, while there was a noticeable rise of poverty incidence among the US immigrant population, of which the largest group was the foreign-born Hispanic population. There is a localized effect in the increased poverty that immigration initially brings, in that these metro areas near national borders will experience an increase in the impoverished population. This has a detrimental effect on per capita incomes at the local level, but it is not necessarily large enough to affect the national average.

Low Income Levels Among US Immigrants

According to the Center for Immigration Studies, there has been an increase over time in the number of immigrant households that live in poverty, from 23% in 1979 to 29.2% in 1997. This is roughly twice the national average. The Center believes that poverty as a national problem is being driven by immigration trends as well, as immigrants now represent 20% of poor households and 25% of children in poverty within the United States, and these levels continue to rise as a relative proportion. There were some 40 million immigrants residing in the US in 2012, which is 13% of the overall population. 11.7 million were designated as unauthorized immigrants, and they make up around 5% of the national workforce. 46% of the total number of immigrants are Hispanic, while over a quarter hail from Asian birthplaces. In 2008, the total number of unauthorized immigrants from Mexico living in the U.S. was estimated at 7 million. Nationally, there is an above average number of immigrants who live below the poverty line (~20%), yet their occupations still contribute nearly 15% to the total national economic output (Economic Policy Institute). Each of these 10 cities has experienced an above average increase in population due to an influx of unauthorized immigrants from Mexico, Cuba, and the Caribbean. This is largely due to the fact that they sit right in the middle of the prime points of entry, whether overland from Mexico, or by seaport from Cuba and other territories. These metro areas also do not have a lot to offer economically. Jobs are not plentiful, access to investment capital is very low, and industries there are not thriving. Thus there is very little opportunity for these immigrants coming into the country to be able to find any suitable employment with which to get themselves out of poverty.

Identifying and Troubleshooting Sources of Poverty

With the three major factors affecting the level of poverty in these cities being demographics, geography and economics, it would seem that the easiest one of these to make a big impression on is the local economy. Capital investment in local businesses and infrastructural improvements in the areas should therefore be moved forward if at all possible. Meanwhile, and even trickier to troubleshoot, US immigration trends is a continued source of controversy in American politics. The statistical facts are there to support the argument for the importance of foreign-born newcomers, as immigrants as part of the working population contribute more than their fair share to the overall GDP of the country. More problematic still, the unauthorized, or illegal, immigrant demographic now makes up 5% of available labor. Whether politicians can agree or not as to how to best regulate their entry, immigrants are undeniably an essential part of the US economy as a whole, a supply high productivity and low cost labor. Each of these cities is effectively the starting point for a high proportion of this necessary workforce. Therefore, these locales are very important cogs in the engine of the national economy.

Working to Alleviate Poverty

These areas are deprived when compared to more affluent areas of the US, and some of them have been in this poverty trap for some time now. Without external assistance, it can be difficult to see how they can hope to grow in terms of wealth. Indeed, as it stands large-scale investments from outside sources would be required to create the jobs needed to generate wealth and to build a sufficient standard of living, as the internal monies for investment are simply just not there. The irony of being in such a poverty trap is that the workforce able to help these metro districts out of it, and to build a better future, are coming into these cities every day with prejudices against them as being seen as detrimental to the economy. For this reason, a change in peoples’ attitudes may go as far as policies to bring about the changes in fortune that these areas so desperately need.

Cities With The Lowest GDP per Capita

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RankMetropolitan Statistical AreaGDP per Capita
1Sebring, FL $17,123
2Lake Havasu City-Kingman, AZ $17,370
3The Villages, FL $17,476
4Punta Gorda, FL $18,962
5Homosassa Springs, FL $19,739
6McAllen-Edinburg-Mission, TX $19,846
7Brownsville-Harlingen, TX $20,047
8Prescott, AZ $20,049
9Ocala, FL $21,019
10Deltona-Daytona Beach-Ormond Beach, FL $21,913
11Grants Pass, OR $22,015
12Merced, CA $23,153
13Yuma, AZ $23,656
14Port St. Lucie, FL $24,322
15Visalia-Porterville, CA $25,449
16Madera, CA $25,699
17Hammond, LA $25,991
18Gadsden, AL $26,041
19Gettysburg, PA $26,398
20Laredo, TX $26,437
21Lakeland-Winter Haven, FL $26,559
22St. George, UT $26,631
23El Centro, CA $26,960
24Pueblo, CO $27,003
25Bay City, MI $27,198

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