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OCR for page 223
6
Ghetto Poverty and Federal Policies
and Programs
MICHAEL G.H. MCGEARY
Other chapters in this report have reviewed what is known about the
geographic and socioeconomic dimensions of concentrated urban poverty
in the United States and its effects on children and adults. This chapter
reviews the evidence concerning several additional questions that must be
addressed in a policy analysis of concentrated urban poverty: What effects,
if any, have federal policies and programs had on the concentration of
poverty in central-city ghettos of the United States? What role could they
have in reducing concentration or alleviating its negative effects?
The United States does not have a true urban policy in the sense
of a set of comprehensive federal policies and programs that explicitly
try to influence the size, location, or internal spatial structure of urban
settlements as such (Mills, 1987~. As a result, private market forces play
the predominant role in shaping urban areas. Some policies and programs,
however, such as those for urban mass transportation, are explicitly intended
to increase the mobility of poor people, and many other, nonurban policies
have indirect or unintended spatial effects (Barro, 1978; Glickman, 1980;
Mills, 1987; Wiley et al., 1979; Vaughan, 1977a, b; Vaughan and Vogel,
1979~.
Mills (1987) reviewed the evidence and found that federal policies have
probably had an insignificant impact on the overall level of urbanization in
the United States, compared with the effects of the private market. Mills
concluded, however, that in the aggregate, federal policies and programs
have influenced the shape or pattern of urbanization by reinforcing and
extending private market forces that encourage the suburbanization of
employment growth and of better-off residents of metropolitan areas (p.
568~. Another review concluded that federal policies have favored the
development of new and growing regions over older, settled regions and
223
OCR for page 224
224
INNER-CITY POVERTY IN THE UNITED STATES
thereby caused older cities in the Northeast and Midwest to experience
higher unemployment and poverty rates than they otherwise would have
(Glickman and Wilson, 1986:22-25~.
1b the extent that they actually have accelerated or increased the
suburbanization of employment and population within urban areas, and
given the income and racial barriers facing poor people who try to move
out of a central city, federal policies and programs have tended to reinforce
the growing concentration of the poor and minorities in central cities
relative to what would have occurred in their absence. Policies and laws
against segregation have enabled many better-off minorities to move out of
the inner city (Jaynes and Williams, 1989:Ch.4~. Well-designed education
and training programs could increase the earnings of low-skilled residents
of poverty areas, enabling them to move out also. Such programs, however,
are limited in size. Few are targeted enough to reach many residents of
high-poverty neighborhoods.
FEDERAL POLICIES AND PROGRAMS THAT PROMOTE
OR FAIL TO PREVENlr INCOME SEGREGATION
The research on federal housing policies and programs, policies against
housing discrimination, and transportation, economic development, and
welfare programs is reviewed in this section for evidence of effects on the
geographic concentration of poverty. Federal policies and programs have
tended to promote concentration indirectly, for example, by encouraging
the suburbanization of the better-off while having little or no direct effect
in the opposite direction (e.g., through increasing low-income housing in
the suburbs or commuting of the poor across city lines).
Housing
Because housing links all households to a specific location, federal
housing policies and programs could have a direct effect on the cluster-
ing of low-income households in particular areas of central cities. The
deductibility of mortgage interest from federal taxes, for example, has
promoted the suburbanization of higher income homeowners by making
more expensive housing in the suburbs relatively cheaper for them (Mills,
1987:564-565), which in turn gives further impetus to the concentration of
the poor in central cities. Historically, the low-rent public housing pro-
gram has contributed directly to the concentration of poverty by locating
high-rise projects in poorer and minority sections of central cities and,
later, by lowering income ceilings. In addition, the early practices of the
Federal Housing Administration, which adopted the racially discriminately
practices of private real estate and mortgage lending institutions, helped to
OCR for page 225
GHETTO POVERTY AND FEDERAL POLICIES AND PROGRAMS
225
create predominantly white suburbs and increase the concentration of mi-
norities in older, less expensive housing in central cities (Lief and Goering,
1987:228-231; Orfield, 1974~.
lax Treatment of Housing
The federal tax code and many state tax codes have permitted home-
owners to deduct mortgage interest from their income before determining
their tax liability. Because the federal tax schedule is progressive, housing-
related deductions are worth more to high-income owners than low-income
owners. Although suburbanization has occurred in the metropolitan areas
of other advanced industrialized countries, it has proceeded further in the
United States, led by high-income households (Mills, 1987:563~. Making
housing relatively less costly for high-income than for low-income owners
adds to the incentives for high-income homeowners to live in suburbs in
which they can consume expensive housing where land is cheaper, receive
expensive local government services, and at the same time, use zoning
and other land-use controls to avoid subsidizing low-income taxpayers. ~
the extent that federal tax policies have increased the suburbanization of
high-income households relative to poor households, they have reinforced
the concentration of the poor in central cities.
Federal Housing Subsidy Programs
The 1.3 million units in low-rent public housing projects account for
a third of all publicly subsidized housing units, and most of them-
72 percent are located in central cities (Rasmussen, 1980:261~. These
projects probably account for many of the census tracts that had poverty
rates of 60 percent or more in 1980, and, to the extent that public housing
residents are less mobile than other residents of high-poverty tracts, con-
tributed to the large increase in concentrated poverty between 1970 and
1980. For example, 59 percent of the households in the census tract con-
taining the Cabrini-Green high-rise public housing project in Chicago had
lived in the same housing unit between 1975 and 1980, compared with 40
percent in the surrounding poverty tracts without high-rise public housing.
In addition, a series of federal policy changes beginning with the
Brooke amendment of 1969 lowered income limits for households in public
housing. This enabled people with very low incomes to afford public housing
and increased the supply of housing for such households. It also populated
family projects with predominantly low-income rather than mixed-income
residents.
The 1.3 million units built by more recent supply-side federal housing
programs (e.g., Section 236, Section 202, and Section 8 New Construction
OCR for page 226
226
INNER-CTlY POVERTY IN THE UNITED STATES
and Rehabilitation) are less concentrated in central cities. Nevertheless,
more than half these units are in central cities, but because they tend to be
in smaller projects and more scattered, they are less concentrated within
central cities.
Special attempts were made to locate Section 8 New Construction in
the suburbs. An evaluation using 1979 data found that, while 88 percent
of the residents of central-city projects had come from the central city, 40
percent of the residents of projects built in the inner suburbs had come
from the central city, which resulted in a net shift of 10 percent of house-
holds in the program from the central cities to the suburbs. Participating
black households moved to census tracts in which the minority share of
the population was 19 percentage points less, on average. Black families,
however, benefited much less than single and elderly blacks. They de-
creased the minority percentage of their census tracts by only 7 points on
average, from 37 to 30 percent. A strong correlation remained between
minority concentration in the Section 8 New Construction projects and mi-
nority concentration in the census tracts in which the projects were located
(Newburger, 1987:~ble 11, using data from Wallace et al., 1981~.
In recent years, federal low-income housing policy has shifted to
demand-side, or voucher-type, rent supplement programs, largely because
of the high per-unit cost of supply-side programs but also in the hope
that providing assistance directly to low-income families would encourage
mobility and reduce income and racial segregation. These programs will
be more important in the future, because new construction of low-income
housing with federal funds has almost ceased. The number of commitments
for new supply-side rental subsidies was less than 18,000 in 1986, down from
more than 180,000 a year in the late l970s (Newburger, 1987:Table fib).
The effects of demand-side programs on mobility have been limited,
however. For example, analyses of the effects of the federally funded
Housing Assistance Supply Experiment on mobility and desegregation by
income and race found that about 40 percent of the renters participating in
the program in St. Joseph County, Indiana, moved in an Month period,
but that was less than the 54 percent that researchers estimated would have
moved without the program (Lowry, 1983:212-218~. Nearly two-thirds of the
3,600 moves were within the same group of neighborhoods and averaged
less than a mile. The rest of the moves were between neighborhoods
that differed in degree of segregation, but the net shift toward majority
or 95 percent white neighborhoods was just 98 renters. Those moves
did not noticeably affect the racial or income composition of any of the
neighborhood populations, even in the group of neighborhoods in which
more than one-fifth of all households were enrolled and even though 12
percent of all the renters in the county received housing allowances.
The Housing Assistance Supply Experiment, also supported by the
OCR for page 227
GHETTO POVERTY AND FEDERAL POLICIES AND PROGRAMS
227
Department of Housing and Urban Development, randomly assigned par-
ticipants in Phoenix and Pittsburgh to treatment and control groups, which
allows a direct comparison of the effects of housing allowances on mobility
and desegregation by income and race. The control groups exhibited high
mobility rates; 35 percent moved in Pittsburgh and 53 percent moved in
Phoenix over two years. The provision of housing allowances increased mo-
bility another 5 percentage points in Pittsburgh and 10 percentage points in
Phoenix (Ross), 1981:168, using data from MacMillan, 1978:57~. Although
participants, on average, moved into neighborhoods that had fewer poor
and minorities and better amenities, including transportation, they were no
more likely to do so than control households (Ross), 1981:170~.
In the Section 8 Existing Housing program, an early evaluation found
that half the black households that moved went to areas with lower percent-
ages of black residents and 29 percent went to areas with higher percentages
(Drury et al., 1978:74~. In the absence of controls, however, the possibility
cannot be ruled out that low-income movers without Section 8 housing
certificates were just as likely to go to less segregated areas as the control
group members were in the housing-allowance experiment.
Historically, federal housing supply programs for low-income house-
holds have contributed to concentrated poverty in central cities because
they were more likely to be located in neighborhoods that were already
poor, although recent programs have tended to be more dispersed within
central cities and within most metropolitan areas. Supply-side subsidies
go with the unit rather than the tenant, and the number of units is small
compared with the number of eligible households. There is some evidence
that tenants of subsidized housing are less likely to move, probably because
they would lose a significant benefit. There is little evidence that voucher-
type, demand-side programs by themselves enable recipients to move to
neighborhoods less segregated by income or race (compared with the poor
in private housing). Mobilitv rates are orobablv higher than in subsidized
projects, however.
~, A,
Residential Desegregation
Title VIII of the Civil Rights Act of 1968 prohibited racial and other
discrimination in the sale or rental of most housing. In 1968 the Supreme
Court decided in the Jones v. Mayer case (392 U.S. 409) that the Thirteenth
Amendment of the Constitution banned racial discrimination in all housing.
These laws, along with favorable changes in the racial attitudes of whites
(Schuman et al., 1985:Table 3.3; 1bylor et al., 1978) and higher economic
status among some minorities (R. Parley, 1984), enabled many minorities
to move in the 1970s to higher income tracts, which were more likely to be
suburban. This outward movement of minorities lowered the high levels
OCR for page 228
228
INNER-CITY POVERTY IN THE UNITED STATES
of residential segregation by only a little, however, because suburban~zing
minorities tended to move to neighborhoods that were already minority
or were becoming minority. And minority suburbanization resulted in in-
creased income segregation within minority groups, with the poorer among
them remaining in central cities.
Between 1970 and 1975 there was a net out-migration of 243,000 blacks
from central cities; between 1975 and 1980 it was 439,000. There was net
in-migration of blacks to the suburbs of 381,000 between 1970 and 1975
and of 556,000 between 1975 and 1980 (Bureau of the Census, 1981:Table
F). Most of the increase in the number of black suburbanites resulted from
migration from central cities (Spain and Long, 1981~. As a result, the black
proportion of the suburban population increased from 4.8 to 6.1 percent
(Long and DeAre, 1981:Table 1~. Only 20 percent of the black population
lived in the suburbs in 1980, however, compared with 42 percent of the
nonblack population.
According to the index of dissimilarity, which measures how evenly a
minority group Is distributed over census tracts within a metropolitan area
on a scale from 0 to 100, spatial segregation of blacks from whites decreased.
In a sample of the 50 largest MSAs (metropolitan statistical areas) plus 10
MSAs with large Hispanic populations, the index went from 79.2 in 1970
to 69.4 in 1980, a drop of 12.4 percent (Massey and Denton, 1987:1bble
3~. In the 161 MSAs that had populations that were at least 4 percent
black, the index went from 74 to 68, a drop of 8 percent (Wilger, 1987:6~.
The index went down in all regions and in all metropolitan areas whether
grouped by size, rate of population growth, size of minority population, or
rate of minority in-migration (R. Farley and Wilger, 1987:Table C; Massey
and Denton, 1987:1bble 4~. The absolute level of black-white segregation
remained very high, however. Nearly 70 percent of blacks would have had
to move to achieve complete integration in 1980 in the 60 cities studied by
Massey and Denton.
The indices for black-white dissimilarity were especially high in the
five northeastern and midwestern metropolitan areas whose central cities
experienced large increases in concentrated poverty during the 1970s. On
average (unweighted for size), the index went from 84.4 to 83.4. In Chicago
it fell from 91.9 to 87.8, in Philadelphia from 79.5 to 78.8, and in Detroit
from 88.4 to 86.7. In New York it increased from 81.0 to 82.0, and in
Newark it increased from 81.4 to 81.6.
Another dimension of residential segregation is exposure, or the like-
lihood that minorities will encounter a white resident or another minority
resident in their home census tract. Despite the higher proportion of
minorities in metropolitan areas in 1980 compared with 1970, exposure
indices increased slightly. The average probability of blacks interacting
OCR for page 229
GHETTO POVERTY AND FEDERAL POLICIES AND PROGRAMS
229
with non-Hispanic whites, for example, increased from .333 in 1970 to .376
in 1980 in the 60 large metropolitan areas studied by Massey and Denton
(1987:~ble 1~. Isolation, or the probability of contact with other blacks,
fell from .553 to .491.
In MSAs with high and fast-growing levels of concentrated poverty
in their central cities, the isolation of blacks was especially high, even in
1980. In the Chicago MSA, for example, the level of black isolation was
.828 (it was .855 in 1970~. The probability of contact with whites was .125,
a bare improvement over 1970, when it was .118 (Massey and Denton,
1987:14~. Although the level of isolation was lower in the New York,
Detroit, Philadelphia, and Newark MSAs than in Chicago in 1980, it had
actually increased (the unweighted average for the four metropolitan areas
was .675 in 1970, .697 in 1980), and the probability of interaction with
whites had fallen (from .245 to .211) (calculated from Massey and Denton,
1987:~ble 1~.
Black suburbanization also did not have much impact on the level of
residential segregation in the suburbs (Wilger, 1987:15~. Segregation of
blacks from whites across suburbs was nearly as great in 1980 as in 1970
(Logan and Schneider, 1984:1kble 1~. Apparently, blacks were moving to
suburban neighborhoods that were either already black or in the midst of
racial transition (see J. Parley, 1982, and Lake, 1981, for studies of this
process in St. Louis and New Jersey, respectively).
The timing of the suburban movement of blacks indicates that federal
fair housing laws were a factor (McKinney and Schnare, 1986:16-17; Wilger,
1987:18-19~. Black incomes grew rapidly in the 1960s, from 55 percent of
white incomes, on average, to 64 percent, but segregation levels increased
overall and in neighborhoods at each income level; the proportion of blacks
living in lower income census tracts fell only from 85 percent to 80 percent
(McKinney and Schnare, 1986:~bles 4, 5, 64. In the 1970s the ratio of
median black income to median white income fell from 61 percent to 58
percent, yet the movement of blacks out of lower income census tracts and
central cities increased greatly.
The proportion of housing built in an MSA after 1969 might also
contribute to lower levels of residential segregation. Most new housing is
built in large tracts by a single owner, which makes it easier to enforce
fair housing laws. New tracts are also less likely to be racially labeled
and may not deter prospective white buyers fearful of racial transition or
black buyers reluctant to be the first blacks in an all-white neighborhood
(Wilger, 1987:13~. Indeed, the greater the proportion of housing built after
1969 in an MSA, the greater the decrease in the index of dissimilarity
between 1970 and 1980. Where the proportion of new housing was 30 per-
cent or more in 1980, the index fell more than 11 percent in the 1970s. If the
OCR for page 230
230
fNNER-CllY POVERTY IN THE UNITED STATES
proportion of new housing was less than 15 percent, the index fell only 1
percent. If new housing amounted to between 15 and 30 percent of the
stock, the index fell between 5 and 8 percent (Wilger, 1987:%ble 3~.
Although the level of residential segregation did not decrease much
despite black suburbanization, the income disparities between suburban
blacks and central-city blacks increased sharply in the l970s. Average
household income for central-city blacks fell from 92 percent of that of
suburban blacks in 1970 to 78 percent in 1980 (among whites it went
from 84 to 81 percent) (Manson and Schnare, 1985:1bble II-9~. This trend
occurred at a time when inequality of income distribution among blacks
was increasing (Jaynes and Williams, 1989:275~. It is consistent with the
finding that increases in the concentration of poverty between 1970 and
1980 were caused in large part by out-migration of better-off minorities as
well as whites.
Federal civil rights laws and policies helped many better-off minorities
move to the suburbs. Only a few moved to predominantly white suburbs,
however. Segregation levels remained high in metropolitan areas, especially
for blacks. At the same time, the movement of working- and middle-class
blacks out of ghetto areas into higher income neighborhoods in central cities
and the suburbs, especially in the Midwest and the Northeast, increased
income segregation among blacks. One result was the further concentration
of poor blacks and other minorities in central-city poverty neighborhoods.
Reducing the income segregation of minorities presumably would require
policies and programs that increase the supply of affordable housing as well
as overcome racial discrimination in higher income neighborhoods in the
central cities and suburbs.
Transportation
In 1980 federal assistance accounted for a major portion of govern-
ment spending on urban transportation: 40 percent of capital expenditures
on urban highways, 80 percent of capital assistance for urban mass tran-
sit, and 30 percent of mass transit operating subsidies (Gomez-Ibanez,
1985:183~. Annual federal capital expenditures (in 1984 dollars) on high-
ways, which were $11 billion in 1980, had peaked in 1965 at $16 billion
and had declined steadily during the 1970s as the interstate highway system
was completed (Congressional Budget Office, 1985:Fig. 7~. But half of
the 1,200 uncompleted miles in the interstate system are in urban areas
(Congressional Budget Office, 1985:14-15~. Federal capital and operating
expenditures for mass transit grew rapidly from small beginnings in 1964,
increasing 40 percent annually in the 1970s to more than $2.8 billion in
1980 (Congressional Budget Office, 1985:42~. Operating subsidies began
OCR for page 231
GHETTO POVERTY AND FEDERAL POLICIES AND PROGRAMS
231
in 1974, and new subway systems were built in Atlanta, Baltimore, Miami,
San Francisco, Washington, D.C., and begun in Los Angeles and San Jose.
Highways
Federal assistance in the construction of highways has helped to reduce
the cost of commuting by automobile (Vaughan and Vogel, 1979:94-95~. A1-
though the main purpose of the interstate highway system is to improve the
intercity transportation system, the urban segments of the system are used
most by suburbanites to travel to work in central cities and in the suburbs
(Mills, 1987:563~. Beltways and radial freeways (and radial transit systems)
provide much higher travel-to-work cost savings to suburban households
than to central-city households. This enables the growing number of white-
collar jobs that require relatively high levels of education and skills to
locate in central business districts without a commensurate increase in the
number of nonpoor households in the central city (Small, 1985:212-213~.
Although urban highway users as a group more than pay for the capital
and operating expenses of those highways through fuel taxes, rush-hour
commuters to the densely settled central cities of larger metropolitan areas
probably pay less than the full costs because downtown highway segments
are very expensive to build and maintain and their external social costs are
high (Gomez-Ibanez, 1985:199~. This encourages excessive highway use and
permits workers to live farther from their place of employment than if they
paid the full user charge (Mills, 1987:563; Vaughan and Vogel, 1979:9~95~.
Although the net impact of federal highway programs on the spatial extent
of suburbanization has been large, the impact on the proportion of the
population living in suburbs may have been much less. However, it may
have promoted the suburbanization of high-income households, for whom
lower transportation costs facilitate paying more for housing.
Mass Transit
The federal government became involved in the support of urban
mass transportation lo help cities maintain their financially failing mass
transit systems and discourage the use of private automobiles (Hilton,
1974:3~. Mass transit has also been expected to increase the mobility of
the poor (as well as the elderly and the handicapped) and to improve land
use by promoting more concentrated urban development (Gomez-Ibanez.
1985:206~.
r ~
Despite the large increases in federal mass transit operating subsidies
beginning in the 1970s, increases in ridership gains have been modest,
and the impact on automobile use has been negligible. At the same time,
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232
INNER-CITY POVERTY IN THE UNITED STATES
federal operating subsidies have helped the poor only marginally by lowering
transit fares. Since 1975 only 24 percent of additional government subsidy
dollars have gone to reduce fares; the rest supported low-ridership service
expansions to new suburban markets or went to higher factor prices (e.g.,
higher wage rates and fuel costs) and to compensate for lower productivity
within the industry (Cervero, 1985; Pickrell, 1986~. The frequency of bus
service in many central cities was cut back (Pickrell, 1983~. In addition, most
of the federal capital subsidies have gone to aid subways and commuter rail
projects rather than bus systems, which are used most by the poor (Pucher,
1981:Table 3).
Only 23 percent of federal operating assistance went to low-income
users in 1983; most long-distance, peak-hour commuters were individuals
from upper income groups who used the more costly subway and commuter
rail services. Only 8 percent of commuter rail users were poor, for exam-
ple. Accordingly, travelers from low-income households received a federal
subsidy of 12 cents per transit trip compared with 20 cents a transit trip for
persons from households with incomes of $50,000 or more (Charles River
Associates, 1986, quoted in Urban Mass Transportation Administration,
1987:29~. Moreover, new and extended subway systems appear to have the
same impact as radial freeways, although to a lesser extent (Gomez-Ibanez,
1985:209~. They stimulate high-rise office development and, therefore,
employment in the downtown area, while favoring the suburbanization of
higher income households (Small, 1985:213~.
In 1980 only 6.4 percent of all workers nationwide used public transit
(down from 9 percent in 1970), but transit use was much higher in the
Northeast, where more than 14 percent of workers used it (Fulton, 1983~.
More than 45 percent of the workers in the New York MSA relied on
public transit in 1980, and they accounted for 28 percent of all workers
using transit in the United States. Workers in the Chicago area had the
next highest reliance on public transit 18 percent. Only 10 other MSAs
had more than 10 percent of their workers using public transit, most of
them in the Northeast or the Midwest.
Fewer workers rode mass transit in 1980 than in 1970, however.
The net loss nationally of metropolitan workers using transit was 487,000,
but metropolitan areas in the Northeast lost 596,000 and in the Midwest
211,000. Public transit in the New York MSA alone lost 355,000 workers
(17 percent). In the Chicago MSA, public transit lost 82,000 (13 percent),
in Philadelphia 108,000 (28 percent), and in Detroit 61,000 workers (49
percent).
Another study of public transit ridership in 1970 and 1980 in the
25 largest urbanized areas found that there was a substantial gain in the
number of workers using mass transit to commute from suburban homes
to central-city jobs, but it was more than offset by the loss of centrality
OCR for page 233
GHEl7O POVERIY AND FEDERAL POLICIES AND PROGRAMS
TABLE 6-1 Number of Workers Using Public Transit in the 25 Largest Urbanized
Areas, by Origin and Destination, 1970 and 1980
233
Type of Trip
1970 1980 Percentage
(000) (000) Difference Change
Central-city home to
central-city job3,230.22,727.0 -503.2 -15.6
Suburban home to
central-city job686.51,014.0 +327.5 +47.7
Central-city home to
suburban job343.0192.6 -150.4 -43.8
Suburban home to
suburban job503.8357.4 -146.4 -29.1
NOTES: Public transit includes bus/streetcar, subway/elevated rail, commuter railroad, and
taxi. Workers are ~1 persons aged 16 years or older living in the 25 largest urbanized areas
who use mass transit to get to work. "Urbanized areas" include the central city and only that
part of the surrounding suburban area with at least 1,000 persons per square mile MSA
boundaries include enure counties and thus can include rural areas. This criterion excludes the
thinly settled outer fringes of metropolitan areas. It should be noted that work-related trips
account for less than half of all trips on public transit.
SOURCE: Calculated from Joint Center for Political Studies (1985), Tables M-70 and M-80.
workers using mass transit (Joint Center for Political Studies, 1985~. There
were also losses in the number of "reverse commuters," those using public
transit to get from central-city residences to suburban jobs, and in the
number of workers using public transit to commute within the suburbs
Amble 6-1~.
The precise impact of these changes in transit use patterns on central-
city poor people is unknown. The reduced number of work trips within
central cities and between central cities and suburbs may be accounted for
by workers who moved from the central cities to the suburbs during the
1970s, but the resulting cutback in bus schedules in the central cities would
have reduced the mobility of those left in the central cities. This may have
been a factor in the reduction in earnings among families remaining in
high-poverty tracts.
According to the Federal Highway Administration's 1977-1978 Nation-
wide Personal Transportation Study, households with low incomes (less than
$6,000 a year) constituted 12 percent of travelers using all forms of transit
but 25 percent of the users of public transit (Pucher et al., 1981~. Poor
people also accounted for 27 percent of all taxi trips, more than higher
income groups. However, they relied on transit for less than 7 percent of
all trips (8.3 percent of all work trips) and on taxis for 0.5 percent of all
trips. Poor people were much more likely to travel by car (66 percent of
all trips) or by foot (23 percent).
OCR for page 242
242
INNER-CITY POVERTY IN THE UNITED STATES
project had higher employment rates and lower rates of criminal behavior
when they were 19 years old than individuals in the control group (but the
sample sizes were very small) (Barrueta-Clement et al., 1984~.
The Chapter 1 education program serves almost 5 million children in
elementary and secondary schools, at a cost of $4.3 billion in 1988. Chapter
1 is intended to support special compensatory services for low-achieving
students in schools with high concentrations of poor children. The focus
of the program is consistent with research evidence that there is a strong
association between family poverty and average achievement in a school
and only a weak association with individual student achievement (Kennedy
et al., 1986a:3-4, citing a review of studies of the relationship between
socioeconomic status and academic achievement by White, 1982~. Chapter
1 funds are distributed in proportion to the number of poor children in a
school district. The district, in turn, provides special services to children,
poor or nonpoor, of low educational achievement in schools with above-
average concentrations of poverty. The services provided are primarily
basic skills instruction in reading and mathematics for elementary school
students (Birman et al., 1987: Ch. 3~.
Schools with as few as 10 low-income students are eligible for Chapter
1 services, and more than 90 percent of the school districts in the United
States participate. Nevertheless, because funding is proportional to the
number of poor students in a school district, the poorest quartile of districts
contains 45 percent of the students receiving Chapter 1 services. Central-
city districts, which have 26 percent of all students, have 37 percent of the
Chapter 1 students. Still, 13 percent of schools with more than half their
students in poverty offer no Chapter 1 services, and some schools with
Chapter 1 services have very few poor students (Birman et al., 1987:Ch. 2~.
In a single year, about 11 percent of school-aged children are served
by Chapter 1, but, with a 40 percent turnover rate annually, an estimated
25 percent of all public school students receive services at some point
(Kennedy et al., 1986b:7~. There are no recent data on the proportion of
Chapter 1 recipients who are poor.
Academic achievement, at least as measured by standardized tests,
dropped substantially from the mid-1960s until the mid-to-late 1970s (Con-
gressional Budget Office, 1986:Ch. 3~. In the subsequent upturn in test
scores, minority students, students in schools with a high proportion of mi-
norities, and students in disadvantaged urban areas made greater relative
gains than other students (Congressional Budget Office, 1986:Ch. 4~. Some
researchers have attributed the gains to federal funding because the pattern
of increases in achievement scores paralleled patterns of increased federal
financial support (LaPointe, 1984; Riddle, 1984~. Only one evaluation,
using data from 1976-1979, followed a set of students over time, including
comparable students who did not receive Chapter 1 services (there are
OCR for page 243
GHEITO POVERTY AND FEDERAL POLICIES AND PROGRAMS
243
no evaluations of the program's impact using a randomly selected control
group). The study found that Chapter 1 students, especially in the early
grades, gained relative to comparable students, but not enough to bring
them close to the achievement levels of advantaged students. A more recent
cross-sectional study without a comparison group found more substantial
gains relative to advantaged students, but again the gains were not enough
to bring Chapter 1 students close to the level of the average student (both
studies are reanalyzed and their methodological shortcomings discussed in
Kennedy et al., 1986b:Ch. 3~. A careful evaluation of the research evidence
by the Congressional Budget Office (1987:94-98) concluded that Chapter 1
services could have contributed only a small amount to the upturn in test
scores of minorities and of students in the early grades.
In summary, federally subsidized education programs aimed at poor
students and poor schools can improve the educational achievement and
attainment and, therefore, the future employment and income prospects
of poor children, including those in poor neighborhoods. Any impact
on the concentration of poverty would be long term, however, and the
magnitude of that impact would depend on how large and well targeted
the programs were on poor families in areas of concentrated poverty and
on how well designed and well delivered the programs were. As already
noted, Head Start reaches about 20 percent of poor children aged three to
five years; Chapter 1 reaches about 25 percent of all school-aged children
at some point. The proportion of Chapter 1 students that are poor is
unknown, but it is known that some schools with concentrations of poor
children do not participate and that nonpoor children participate in other
schools. The formulas for distributing program funds do not try to target
the funding geographically but spread the program widely. The variation
among individual Head Start and Chapter 1 projects in their effects is
considerable, and their average impact would be increased appreciably
if less effective programs performed as well as more effective programs
(Kennedy et al., 1986a:Ch. 5~.
Training
Federal involvement in employment and training programs began in the
Great Depression. The federal-state Employment Service has long existed
to address the short-term, or frictional, unemployment of those temporarily
between jobs. Many other federal employment and training programs
were created to reduce cyclical unemployment caused by downturns in the
business cycle. The most pertinent programs for residents of concentrated
poverty areas, however, are those intended to reduce the long-term, or
structural, unemployment of low-skilled workers (Bass) and Ashenfelter,
1986~.
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244
INNER-CITY POVERTY IN THE UNITED STATES
Despite the long history of federal involvement in training programs,
few programs have been subjected to experimental analysis using randomly
assigned control groups. Some of those that have, however, demonstrate
significant positive and cost-effective results, including the National Sup-
ported Work Demonstration, the state welfare-to-work experiments inspired
by the supported work experiment, and the Job Corps.
The National Supported Work Demonstration ran from 1975 through
1979 in 15 sites. It subsidized highly structured and closely supervised work
experiences that gradually became more demanding until they approximated
regular private employment. The program had the most positive impact
on the long-term employment and earnings of enrollees from two target
groups, long-term AFDC recipients and former drug addicts (there was
no postprogram impact on the two other target groups, former offenders
or young school dropouts). The AFDC recipients averaged about nine
months in the program. Eighteen months later, 42 percent of the enrollees
were employed, compared with 35 percent of the control group members.
Enrollees worked 62 hours a month on average, compared with 46 hours
among control group members, and they averaged $248 a month in earnings,
about $81 more than the control group average (Hollister et al., 1984:~ble
4.6~. Similar results were obtained by the former drug users JIollister et
al., 1984:Table 5.5~.
The Supported Work Demonstration was also cost-effective for the
AFDC recipients and former drug users. In the long run, the costs of
the program were far outweighed by the higher income and reduced de-
pendence on welfare payments of the AFDC recipients and by the higher
income and reduced criminal activity of the former drug users (Hollister et
al., 1984:Table 8.6~.
The Manpower Demonstration Research Corporation, which was cre-
ated to run and evaluate the Supported Work Demonstration, has sub-
sequently conducted experimental evaluations of a number of state-level
programs aimed at increasing the employment of AFDC recipients. Those
programs, which rely on relatively inexpensive interventions (e.g., job clubs),
have proven in most cases to have a significant and cost-effective impact,
although the impact is typically modest (Gueron, 1987~.
The Job Corps, which was established in 1964, is a residential program
for school dropouts between ages 14 and 21 that provides them with basic
education, vocational skills, and health care for an average of 30 months per
participant. About 90 percent of the enrollees are from poor or welfare-
dependent households, more than 75 percent are minorities, and 30 percent
are female (Betsey et al., 1985:110-116, describe the program and assess
evaluations of it). An evaluation in 1982 by Mathematica Policy Research
found that participants in the Job Corps did better than comparison group
members along several dimensions that can be attributed to the program
OCR for page 245
GHEl7O POVERTY AND FEDERAL POLICIES AND PROGRAMS
245
(Mallar et al., 1982~. After three and a half years, for example, Job
Corps enrollees were employed an average of 26 weeks a year, compared
with 23 weeks among nonparticipants; they earned an average of $2,592
(1977 dollars), compared with $2,025 among nonparticipants; and they had
less income from welfare or unemployment. Moreover, they experienced
better health and were arrested less often for serious crimes. After an
initial six-month period after completing the program, when enrollees did
worse than the comparison group members, these outcomes emerged and
persisted during the rest of the four-year follow-up (Betsey et al., 1985:112,
summarizing Mallar et al., 1982~.
Like educational programs, carefully designed and targeted training
programs have the potential of increasing the career earnings of low-skilled,
disadvantaged residents of concentrated poverty areas and enabling them
to move to nonpoor neighborhoods. The most successful of the programs
(Job Corps, Supported Work), however, are very expensive and pay for
themselves only in the long run. The state welfare demonstration programs
are cheaper, but their impact is much more modest.
CONCLUSION
Historically, federal policies and programs have had five main if un-
intentional effects on the spatial distribution of poverty. First, federal
programs have favored the suburbanization of higher income people rela-
tive to lower income people, thereby reinforcing the concentration of poor
people, many of them minorities, in central cities. Second, federal actions
have encouraged the development of new areas in the South and the West
relative to the older, developed metropolitan areas in the Midwest and the
Northeast. The economies of the latter regions have declined in relative
and, in some cases, absolute terms; as a result, poverty has increased in
the central cities of those regions and it has become even more difficult for
poor people there to escape poverty through work. Third, some federal
programs, such as high-rise public housing projects, have had the direct
effect of concentrating poverty, especially after changes in the income eligi-
bility rules drastically reduced the average income levels in public housing
after 1969. Fourth, after 1968, fair housing laws helped nonpoor minorities
to leave ghetto areas, which contributed to the dramatic increase in concen-
trated poverty among central-city minorities during the 1970s. Fifth, some
federal policies intended to increase the mobility of poor families, such as
housing vouchers and mass transit subsidies, have not had the expected ef-
fect of reducing residential or income segregation. Other programs, such as
AFDC, may have the unintended effect of discouraging mobility. There is
evidence, however, that programs that improve the education and training
skills of the poor can increase the career earnings of low-skilled residents
OCR for page 246
246
INNER-C1IY POVERTY IN THE UNITED STATES
of high-povert~r areas and thus enable them to move to nonpoor neigh-
borhoods, although these programs are limited in size and are not well
targeted geographically to high-povertr ghettos.
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Representative terms from entire chapter:
federal policies
