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Boston Foundation special report finds Boston not immune to national poverty trends, pressure increasing on safety nets

Date: November 09, 2011

Boston – A special report from the Boston Indicators Project reinforces the new federal supplemental poverty measure from the Census Bureau, and finds reasons for deep concern about the city’s most vulnerable citizens heading into winter. The Measure of Poverty: A Boston Indicators Project Special Report finds that while the city’s “official poverty profile” is largely unchanged, a closer look at the numbers finds concentrated and deepening poverty in the Roxbury, Dorchester and Mattapan neighborhoods and widening income inequality in the city. It also notes just how significantly the historic formula for the Federal Poverty Standard has undercounted those in need given Greater Boston’s high cost of living, and the impact of recent state and federal budget cuts on programs designed to offset the harshest effects of poverty.
 

Among its chief findings:

  • 85% of Boston families with children in poverty are headed by a single parent, with high rates across all races and ethnicities;   
  • While more than 1 in 4 (28%) Boston children live in poverty overall, the concentration is highest in Roxbury, Dorchester and Mattapan, where the child poverty rate reaches 42%, the largest concentration of children in poverty in the Commonwealth;
  • Because the Federal Poverty Standard is not fully adjusted for local inflation, Boston’s “officially poor” are poorer today than they were 20 years ago;  
  • When the city’s high cost-of-living is taken into account, as many as 340,000 Bostonians face economic stress in the post-recession economy  
  • While the City of Boston is using new local-option taxes to offset cuts in state local aid and state programs serving the most vulnerable, demand for public and nonprofit “safety-net” services in increasing in Boston and throughout the Commonwealth.

“Traditional broad measures show the Boston and Massachusetts economies faring better than much of the nation, but unfortunately, when one begins to dig further into the data, the stresses on low-income residents become clear.” said Paul Grogan, President of the Boston Foundation. “This Indicators Project special report is a critical reminder that we need to control costs in areas like health care, protect important safety net programs and strengthen the education pipeline so that all residents of Boston can thrive and prosper.”

Many of the issues raised by the report are also reflected in larger national trends. Monday, the Census Bureau released its Supplemental Poverty Measure, which calculates household incomes, including food stamps and other benefits as income, while also adding expenses such as taxes and health care costs into the calculation to determine poverty levels . This alternate measure to the official standard established in the 1960’s takes into account all of the cash resources families have to pay their bills, as well as regional differences in the costs of those bills, to better calculate financial stress.

However, the Census Bureau numbers are not those used to determine eligibility for federal and many other assistance programs, which are based on the US Department of Health and Human Services poverty threshold standard.

The Indicators Project special report uses both the current Federal Poverty Standard and the Family Economic Self-sufficiency Standard calculated for Boston by the Crittendon Women’s Union, which accounts for local costs for families of many types, as well as itemized basic living expenses. The 2010 Family Economic Self-Sufficiency Standard determined that a Boston family of four (including one adult and 3 young children) would need a theoretical $81,000 per year to cover basic necessities without subsidies – nearly four times the current Federal Poverty Standard.

The report also notes that between 1990 and 2009, the cost of living in Boston rose by 68%, while the Federal Poverty Standard rose by 55%.  That creates an “inflation gap” in buying power of $1,505 per year for a Greater Boston family of four on or under the poverty threshold. For families at 150% of poverty, the gap grows to $2,257 – roughly the cost of fresh fruits and vegetables, transportation or utilities for a year for a family of four.

“The change in the Census Bureau’s supplemental formula for calculating poverty is long overdue because the current measure does not take into account regional or household differences. The new measure will paint a more complete picture,” said Charlotte Kahn, the Director of the Boston Indicators Project. “But the explosion in food bank demand and in requests for assistance from government and nonprofit agencies that the real number of people in need in Boston and the Commonwealth goes well beyond what either the old or new standard captures - and we know cuts in those critical programs will result in much larger societal costs down the road.”

The report details the dramatic increase in requests for services from federally funded, state-administered, state-supplemented and nonprofit safety net programs since the beginning of the Great Recession, coupled with significant cuts in funding for those programs. Eligibility for most programs that provide extra support to individuals, families and households in poverty ends at 185% of the Federal Poverty Standard, and few households actually receive all the benefits for which they are qualified, or are time-limited out of programs.

The report also shows that Boston has not been immune to national trends in the concentration of poverty or in income inequality, with the top 5% of Boston’s earners accounting for 25% of the city’s total annual income, while the bottom 20% earned just 2.2% of the total. Recent figures place Suffolk County among the 50 most unequal counties in the United States.

The findings on poverty concentration were echoed in a report this week from the Brookings Institution, which noted a national trend toward concentrations of extreme poverty in cities and suburbs across the country. The Boston metropolitan area actually ranked 76th of the largest 100 metropolitan areas for poverty concentration in the report.

The Boston Foundation and other local foundations plan to continue their collaborative efforts to fund nonprofits that support residents’ basic needs this winter in areas such as food, fuel and housing. More information on that project will be released in the coming weeks.

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The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation, with assets of $796 million. In Fiscal Year 2010, the Foundation and its donors made more than $82 million in grants to nonprofit organizations and received gifts of close to $83 million. The Foundation is made up of some 900 separate charitable funds established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges. For more information about the Boston Foundation, visit www.tbf.org or call 617-338-1700.

The Boston Indicators Project is sponsored and coordinated by the Boston Foundation in partnership with the City of Boston and Metropolitan Area Planning Council. It aims to democratize access to high quality data and information, foster informed public discourse and track progress on shared civic goals. For more than ten years, the Project has been a primary data resource for the Greater Boston community, providing a rich online portal of data research and provocative biennial reports that chronicle not only Boston’s accomplishments but the full array of critical challenges facing the city and the region.

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