The Poorest Town in America

While I was reading a NYT article on the poorest city in America, I came across this interesting tidbit about the second poorest:

Statistically, no place comes close to Kiryas Joel. In Athens, Ohio, which ranks second in poverty, 56 percent of the residents are classified as poor.

Kiryas Joel is an unusual place.  Although it’s the poorest town in America, it didn’t seem very representative of American poverty, or perhaps I should use the scare quotes: “poverty.”  But Athens, Ohio, now that sounds like a very normal sort of place.

Brace yourself for a picture of poverty in America:

There you are, a town that is described by Wikipedia as follows:

2010 census

As of the census[2] of 2010, there were 23,832 people, 6,903 households, and 1,842 families residing in the city. The population density was 2,424.4 inhabitants per square mile (936.1 /km2). There were 7,391 housing units at an average density of 751.9 per square mile (290.3 /km2). The racial makeup of the city was 86.4% White, 4.4% African American, 0.2% Native American, 6.1% Asian, 0.6% from other races, and 2.3% from two or more races. Hispanic or Latino of any race were 2.4% of the population.

There were 6,903 households of which 11.8% had children under the age of 18 living with them, 20.5% were married couples living together, 4.2% had a female householder with no husband present, 2.1% had a male householder with no wife present, and 73.3% were non-families. 33.8% of all households were made up of individuals and 5% had someone living alone who was 65 years of age or older. The average household size was 2.28 and the average family size was 2.74.

The median age in the city was 21.6 years. 5.8% of residents were under the age of 18; 67.6% were between the ages of 18 and 24; 14.4% were from 25 to 44; 7.9% were from 45 to 64; and 4.3% were 65 years of age or older. The gender makeup of the city was 50.0% male and 50.0% female.

Did you expect America’s second poorest town to be 92.5% White and Asian?  And 4.4% black and 2.4% Latino?  How does something like that happen?  Take a look at the percentage of the population between 18 and 24.  The 2000 census report gives us another clue:

The median income for a household in the city was $17,122, and the median income for a family was $53,391. Males had a median income of $35,849 versus $28,866 for females. The per capita income for the city was $11,061. About 14.8% of families and 51.9% of the population were below the poverty line, including 19.1% of those under age 18 and 7.2% of those age 65 or over.

The typical Athens “family” made 53k in 2000, and the typical Athens “household” made 17k in 2000.  Are you beginning to understand why I insist that income inequality data is complete garbage?

I used to talk about how I have spent considerable time in all 5 income quintiles, including 8 years in the bottom quintile.  To a significant extent US distribution of income data describes not different classes of people, but the very same people at different stages of their life.

When I would make this claim commenters would insist that college students weren’t counted as poor. That confused me.  I was counted as poor, why wouldn’t other college students be counted as poor?

Another response is that I’m engaged in “denial.”  I’m not denying anything. I know that there is lots of poverty in urban black neighborhoods, in Indian reservations, along the Tex-Mex border, or even in suburbia. But I don’t know that from the data, I know that because I’ve traveled all over America and seen the poverty. I’ve talked to poor people who have told me how their discretionary income was wiped out by the huge rise in cigarette taxes (supported by liberal politicians.)  Roughly $2000/ year for pack-a-day smokers in high tax states, if you include “legal settlement” quasi-taxes.)

So yes, by all means let’s rely on our own two eyes, not the government data.  In the 1960s the big problem (that liberals complained about) was that the middle class had it so good and the poor had it so bad.  Since that time the living standards of the middle class have improved modestly, while the living standards of the poor have improved much more. At least that’s what I see when I travel around. In many cases poor immigrant hispanics live in those 2 or 3 bedroom ranch houses with one bath, which used to be regarded as middle class in the 1960s.  You see many fewer shacks with no indoor plumbing, as compared to the 1960s.

So in my view the country is better off than in the 1960s, and living standards for the poor have risen faster than for the middle class.  What about the 1% who are rich?  Yes, they’ve done very, very well.  Partly through bad public policies that make rent-seeking too easy.  Partly because the digital economy is a very low marginal cost, winner-take-all economy. The loot is split between techies and financiers. But if the other 99% of America is richer, and more equal than the 60s in a consumption sense, I’d consider that major progress. What do you think?

PS.  This doesn’t mean redistribution is not needed.  A healthy subsidy for low-wage workers would be helpful.

PPS.  Why did I avoid the poorest town in America?  Did I skim over it because it undercut my argument that government-defined “poverty” is not what you think it is?  Judge for yourself:

The poorest place in the United States is not a dusty Texas border town, a hollow in Appalachia, a remote Indian reservation or a blighted urban neighborhood. It has no slums or homeless people. No one who lives there is shabbily dressed or has to go hungry. Crime is virtually nonexistent.

And, yet, officially, at least, none of the nation’s 3,700 villages, towns or cities with more than 10,000 people has a higher proportion of its population living in poverty than Kiryas Joel, N.Y., a community of mostly garden apartments and town houses 50 miles northwest of New York City in suburban Orange County.

About 70 percent of the village’s 21,000 residents live in households whose income falls below the federal poverty threshold, according to the Census Bureau. Median family income ($17,929) and per capita income ($4,494) rank lower than any other comparable place in the country. Nearly half of the village’s households reported less than $15,000 in annual income.

About half of the residents receive food stamps, and one-third receive Medicaid benefits and rely on federal vouchers to help pay their housing costs.

Kiryas Joel’s unlikely ranking results largely from religious and cultural factors. Ultra-Orthodox Satmar Hasidic Jews predominate in the village; many of them moved there from Williamsburg, Brooklyn, beginning in the 1970s to accommodate a population that was growing geometrically.

Hasidic Jews with big families, or college students with no kids at all.  Take your pick.

Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!

About Scott Sumner 492 Articles

Affiliation: Bentley University

Scott Sumner has taught economics at Bentley University for the past 27 years.

He earned a BA in economics at Wisconsin and a PhD at University of Chicago.

Professor Sumner's current research topics include monetary policy targets and the Great Depression. His areas of interest are macroeconomics, monetary theory and policy, and history of economic thought.

Professor Sumner has published articles in the Journal of Political Economy, the Journal of Money, Credit and Banking, and the Bulletin of Economic Research.

Visit: TheMoneyIllusion

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.