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Low Income Areas in America

by Noah Smith

Friday, August 14, 2015

The Safety and Soundness Act defines "low-income area" to include:

(a) census tracts or block numbering areas in which the median income does not exceed 80 percent of area median income (AMI)

(b) families with income not greater than 100 percent of AMI who reside in minority census tracts, and

A "minority census tract" is a census tract that has a minority population of at least 30 percent and a median income of less than 100 percent of the area median income. The area median income varies from location to location and is determine on an annual basis.

We took a look at the data by collated by the Economic Research Service (ERS) of the United States Department of Agriculture to have an idea of the number of people who live in places designated as low income areas.

These families living in these areas are subjected to a number of disadvantages which as compared to the rest of the country in facets of life such as economic opportunities, education and health.

For instance, children living in low income areas have a higher number of absenteeism or leave school all together because they are more likely to have to work or care for family members. Dropout rates of 16 to 24-years-old students who come from low income families are seven times more likely to drop out than those from families with higher incomes.

High-paying jobs are often concentrated in just a few industries, and the nation’s richest neighborhoods typically have very high concentrations of jobs in these fields and it is typical to find residents in the low rates of families with low incomes working in these fields.

Not only do Americans living in poverty often lack such high-paying jobs, but they also suffer from additional problems that are compounded by poverty. According to Beth Mattingly, researcher with the Stanford Center at Poverty and Inequality, "It’s not just having less money. Life is harder when you’re poor." Mattingly, who also serves as the director of research on vulnerable families at the Carsey School of Public Policy at the University of New Hampshire, added that poverty "introduces barriers." Mattingly also noted that the working poor often lack sick leave, or could lose their jobs if they take time off.

Holding down a job can also play a major role in promoting high incomes because most Americans derive the majority of their income from their jobs. In a 2013 working paper for the National Bureau of Economic Research, authors Jeff Larrimore, Richard V. Burkhauser, and Philip Armour concluded that most of the decline in American post-tax incomes during the Great Recession was driven by a decline in employment.

We reviewed the data we got to identify some of the neighborshoods in America that have a significant number of residents living in low incomes areas.

United States of America

308,745,538
Total Population

237,790,198
Urban Population

70,955,340
Rural Population

Population

Urbanization

Housing Units

Low Income Population

72,864

Number of Counties

Low Income Housing Units

37.15%

Rate of Total Population Living In Low Income Areas

39.13%

Rate of Urban Population Living In Low Income Areas

30.54%

Rate of Rural Population Living In Low Income Areas

114,703,684
Population In Low Income Areas

93,037,163
Urban Population In Low Income Areas

21,666,521
Rural Population In Low Income Areas

116,716,292
Total Housing Units

89,792,248
Urban Housing Units

26,924,044
Rural Housing Units

36.35%

Rate of Low Income Housing Units

38.08%

Rate of Low Income Housing Units In Urban Areas

30.6%

Rate of Low Income Housing Units in Rural Areas

42,430,768
Housing Units In Low Income Areas

34,192,942
Urban Housing Units In Low Income Areas

8,237,826
Rural Housing Units In Low Income Areas

19 (38%)

Number Of States With More Than The National Average of People Living In Low Income Areas

Mississippi (49.13%)

State With The Worst Record

Wyoming (20.54%)

State With The Best Record

California (15,167,009)

State With The Highest Number of People In Low Income Areas

Mississippi (51.52%)

State With The Worst Record for Urban Residents

Virginia (53.27%)

State With The Worst Record for Rural Residents

Source: Economic Research Service (ERS) of the United States Department of Agriculture

Source: O*NET

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