Mayor Bloomberg, Deputy Mayor Gibbs And Center For Economic Opportunity Executive Director Morse Release New Data Showing New York City Poverty Rate Has Stabilized Following Recession

April 22, 2013

In 2001, New York City Had the 6th Highest Poverty Rate Among 20 Largest Cities, Now has 8th Lowest of 20 Largest Cities

Mayor Michael R. Bloomberg, Deputy Mayor for Health and Human Services Linda I. Gibbs, Center for Economic Opportunity Executive Director Kristin Morse and Director of Poverty Research Mark Levitan released data today showing that the poverty rate in New York City has stabilized in 2011 after mirroring the national trend of an annual increase since the 2008 financial crisis.  Employment among working-age New Yorkers increased from 2010 to 2011, poverty among single-parent households declined significantly and the percentage of households living in extreme poverty flattened. Additionally, the wages for low-income New Yorkers stopped declining in 2011, the percentage of those workers holding steady work has stabilized and New York City’s housing programs played a key role in helping lift New Yorkers out of poverty. Federal housing programs lifted 0.3 percent of the U.S. population out of poverty in 2011, according to the Census Bureau’s Supplemental Poverty Measure, while the CEO poverty measure finds NYC housing programs lifted 6.2 percent of the City’s population out of poverty. The poverty rate in New York City is determined by the CEO Poverty Measure, developed in 2008 as a more accurate metric that compares a family’s resources – including tax credits and government benefit programs – against a threshold that reflects the cost of living in New York City.

“This encouraging data shows that after the worst of the Great Recession, poverty and wages stabilized back in 2011and poverty in single-parent households declined significantly while employment increased,” said Mayor Bloomberg. “Our data indicate that we can expect low-income New Yorkers to see continued gains in employment and wages as the economy continues to grow; and every day we’re working to create jobs at every income level.”

“The recession struck particularly hard among low-income New Yorkers, who often are without savings and rely on safety net programs in order to make ends meet,” said Deputy Mayor Gibbs. “We have continued to expand access to nutritional assistance since 2008, and the data indicates that this was an important step in protecting our most vulnerable residents until the job market could begin to recover.”

“Our work to fight poverty in New York City would be meaningless without an accurate assessment of the challenge we face, and today’s report marks an important milestone in continuing that mission,” said CEO Executive Director Kristin Morse. “It’s promising to see that the City’s growing economy improved conditions for low-income families, and increasing employment will lead to even more eligibility for important tax credits.”

“This year’s report shows that two keys to fighting poverty are increasing employment and providing work supports,” said HRA Commissioner Robert Doar. “HRA will continue its longstanding focus on these two essential themes while being sure that we have effective protections against fraud and abuse."

“The 2011 employment data signal a shift in the economic environment from recession to the onset of recovery,” said Mark Levitan, CEO Director of Poverty Research and Author of the Poverty Measure Report. “Continued progress will depend on ongoing access to the social safety net and an expanding job market.”

“The City’s CEO Poverty Measure corrects for some of the flaws in the federal poverty threshold,” said CEO of Community Service Society David R. Jones. “By taking into account tax changes, like the temporary reduction in payroll taxes, as well as including benefits like the cash value of food stamps, the City measure shows the impact of public policies in addressing income inequality. We hope the next administration will continue to use this measure to focus on what actions it can take to reduce poverty.”

CEO’s report indicates a shift in the economic environment beginning in 2011. At 19 percent in 2008, the City’s poverty rate began increasing year-to-year as a result of the national economic downturn, reaching 20.9 percent in 2010. The report finds that in 2011, the rate stood at 21.3 percent, a statistically insignificant change. A notable decrease in the poverty rate, however, was among single-parent households, where poverty fell from 33.4 percent in 2010 to 30.9 percent in 2011.

The rise in extreme poverty – those with incomes below 50 percent of the poverty line – has also stopped, holding at 5.6 percent after rising from 4.8 percent in 2009. The CEO poverty threshold for 2011 was established at $30,949 for a family of four – more than $8,000 higher than the official federal threshold which fails to account for the city’s cost of living.

Employment increases have led to stabilized earnings for low-income New Yorkers, which had fallen nearly 14 percent from 2008 to 2010. After a two-year decline, the share of working-age New Yorkers with employment rose from 66.4 percent in 2010 to 67 percent in 2011. The percentage of those finding steady work —defined as 50 weeks over 12 months — stopped declining in 2011, after falling two full percentage points from 2009 to 2010.

The CEO Poverty Measure gauges the poverty rate in New York City, developed in 2008 as a more accurate metric than the official poverty measure released by the U.S. Census Bureau. Constructed in the early 1960s, the official poverty measure established thresholds based on the cost of a minimum family diet during that time. This threshold does not represent contemporary spending patterns, where housing costs represent the largest expense in a typical family’s budget. Based on the recommendations of the National Academy of Sciences, the CEO Poverty Measure includes all wages, tax credits and non-cash housing and nutritional benefits and compares those resources against a poverty threshold that more accurately gauges the cost of living. The CEO measure has been influential across the nation, leading the federal government to adopt the Supplemental Poverty Measure in 2011. The full CEO Poverty Measure Report can be read here or by visiting nyc.gov.