Franklin & Marshall College Franklin & Marshall College

Sean Flaherty: Professor of Economics, Franklin & Marshall

Session: Views from the Street: Wall Street, Main Street, and Prince Street

My presentation is supposed to give the view from Prince Street. For those of you who are not familiar with the layout of the City of Lancaster (Map of Lancaster PDF), Prince Street is basically the corridor that separates tract 14 from tracts 9 and 15. This is the Southeast that many of you are probably familiar with as being the locus of most of the poverty in Lancaster. I will take you through some data on the location and extent of poverty in Lancaster.

Now, if you look at the first part of the handout that Mac Stacks has provided, (Poverty by Municipality PDF) you’ll see there Census data from 1999—it’s the 2000 Census, but the data reported are from the year prior to the year of publication. You’ll see that, for all the municipalities in the County of Lancaster, there are individual poverty rates, and obviously Lancaster City itself is the place where the poverty rate is the highest. Here are some additional data that will show us what has happened to the rate of poverty in the City of Lancaster as compared with the County of Lancaster, the State of Pennsylvania, and the United States as a whole. (Individual Poverty Rates PDF)  What I’m calling the x-City are the parts of Lancaster County that are outside Lancaster City.

Now, as you can see, the County of Lancaster in the most recent Census has a 7.8% poverty rate, which is considerably below those of the United States and of the State of Pennsylvania. Outside of the City, that rate would be even lower at 6% as opposed to 7.8%. In the City of Lancaster, however, the rate is 21.2%. You can also see what has happened over time to the poverty rates in all of these different geographic locations. Specifically in the City of Lancaster you see a steady increase in the rate of poverty, although the poverty rate only inched up a bit, from 20.9% to 21.2%, in the last ten years—while, over that same period, the poverty rate in Lancaster County fell, but only marginally, especially as compared to how rapidly it had been decreasing in the previous two decades. And so you might see some consistency between these patterns and the patterns that Antonio was showing earlier, whereby, in the 1990s in particular, the slippage of the Lancaster County economy’s relative to the State or to the nation.

The other thing I want to point out in this same document are the high-poverty tracts in the City of Lancaster. A high-poverty tract, as it is typically defined by most social scientists, is one in which the individual poverty rates exceed 40%--which means that more than 40% of people who live in the tract itself are designated or judged to be poor according to the U.S. government standards of what poverty is. You can see that in 1969 there were no such tracts in the city of Lancaster. In 1979, one tract--tract 16, which you can see here in the Southeast--was the first tract showing high poverty concentration. In 1989, we were up to two, tracts 9 and 15 (Map of Lancaster PDF),  which lies just to the south of tract 16 down there in the Southeast quadrant. The happy news is that, by 1999 we were back down below the 40% high-poverty magic threshold in tract 15, but tract 9 was still up there.

The bad news, on the other hand, is that in the intermediate poverty level, if you want to call it that, which is tracts with a 30-39% concentration rate, we’re seeing a further increase in concentration of poverty in the City of Lancaster, from zero tracts in 1969 to three tracts in 1989 and five tracts in 1999. I am not going to talk more about that now. But we can return to that if you have questions later.

The other thing I want to point out in this document are the next two lines, which show us the City to County ratio of poverty rates. They suggest the extra-likelihood of being poor for City residents versus County residents, and you can see what has happened to that ration over time. For instance, let’s look at 1969, and let’s look at the City/Excity ratio, which is perhaps more meaningful than the City/County ratio. If you look at the rate of poverty in the City and divide it by the rate of poverty in Lancaster County for areas outside of the city, in 1969, the chances of a randomly picked city resident being poor were twice those of randomly picked person residing in the County but outside the City of Lancaster. By 1999, those chances were three and a half times as much for a randomly picked City person than for a randomly picked Excity person.

I want to show you one other thing with respect to poverty. There are other ways to break down poverty: by age group, by ethnicity, and by race. These are data for 1999, for the last Census.  (Poverty Breakdowns PDF)  Children had an 11.2% poverty rate in Lancaster County, and that was down from11.8% in 1989. The poverty rate for people from the ages 18 to 64 was 6.5%, interestingly up from 6.2%. People 65 years and older had a 6.6% poverty rate, down substantially from the 8.3% rate that they had 1989.

We can also look at poverty rates by ethnicity. Hispanic poverty in Lancaster County, 28% in 1999. That’s obviously very high. There is some good news, however. That rate is down very substantially from the 38% rate of poverty among the Hispanic population in Lancaster County that had prevailed 1989. As you can see, for White non-Hispanic residents in the County that rate is down from the 6.4% in 1989. Finally, we can look at poverty rates by race. Whites, including Hispanics, had a poverty rate of 6.4% in 1999, slightly down from 6.5% in 1989. The African-American rate was 26.3% in 1999, down from 28.7% in 1989. As you can also see the Asian rate has gone down very substantially and the American Indian rate very substantially as well, although they represent a very small part of the population.

Tom Baldrige

Excuse me Sean. Is there any information about that showing the raw numbers? Because the percentages alone, I don’t think, tell the story like the raw numbers do, because there have been such shifts in those 10 years with some of those populations and age groups.

Sean Flaherty

Well sure, all those numbers are based on raw numbers, I don’t have them here, but we can get them if there are folks who would like to see them; the percentages, after all, were calculated from the raw numbers.

Turning back to Mac’s handout—I’m going to skip over the information on the number of families receiving assistance. But I’ll ask you to turn to Mac’s Table 12, the page showing self-sufficiency standards in Lancaster, PA.  (Self-sufficiency Standard for Lancaster PDF)  The poverty’s threshold is set by the federal government, and I’m not going to get into the details of just how they do that, but let me point out that it’s a rather draconian level of income (Federal Poverty Guide PDF).  The self-sufficiency standard is the level of income for a person who, by virtue earning income above that level, would seem to be self-sufficient, as opposed to others who, being below that level, would not be self-sufficient economically. It represents a higher rate of annual earnings than the poverty rate. If you look at Mac’s table, you’ll see that there’s a group that used to be called the Woman’s Association and Women’s Alternatives--now it’s called Pathways--that tried to establish so-called self-sufficiency income levels, annualized down at the bottom, for Lancaster County, for different sorts of families. A single adult, reading down the first column, would be deemed to be, in Lancaster County in 2004, self-sufficient if he or she was earning more than $15,500. Now, I can show you from one of the tables I put together (Self-sufficiency Wage Standards PDF), that the poverty rate for the single adult in the year before was about $9,000 to $10,000. So you can see that the self-sufficiency level is set at about 150% of the poverty level for the single adult.

Now, as you read across in this table, you can see that Pathways has made the calculations for single adults with children, two adults, one and two adults with a pre-school age children, and so on. This is just a snapshot of some of the categories for which they are trying to calculate the self-sufficiency standard--based on the assumption that the adult is a full-time worker, and that therefore, if he or she has children, he or she is going to need childcare, among other things: shoes, clothes, and the like. The self-sufficiency standard represents what they would need to earn to be able to live, they put it not really comfortably, but without feeling completely underwater with respect to their economic circumstances.

Now, I also want to show you some additional stuff that I and my students have done with respect to self-sufficiency standard. Notice that, according to the 1999 self-sufficiency standard (Self-sufficiency Wage Standard PDF), one adult and one child needed approximately $21,623 in Lancaster County. My students and how wanted to determine what percentage of working households could meet those standards. So, the first thing we did was to go to the Census data pool. There we used the so-called Public Use Microdata Sample, or PUMS for short, which gives you detailed information about individuals in the various public areas, Lancaster County being one of them. There, the first thing we did was to look at all adults, that is people 21 years and older who had wage and salary income and no income from self-employment who worked year-round, which means 50 weeks or more and full-time which means 35 hours or more (Self-sufficiency Wage A PDF).  Then we measured the percentage that had annual earnings less than that $21, 623, such that if they were a single adult with a child, they would have been deemed less than self-sufficient in terms of their earnings. And what you see is that in Lancaster County, in 1999, 23.5% of year-round full-time working adults in Lancaster County would have fallen below the self-sufficiency income standard had they been single adults with children. Obviously you can see that it doesn’t quite work out that way irrespective of gender. The percentage is considerably less than that for men, and considerably greater than that for women: 14% and 38% respectively.

The next category in this table shows breakdowns by race and ethnicity. White males, 13%, white females 35%, Black non-Hispanic males 24%, Black females 47% --once again, that’s a Black female working full-time year-round in Lancaster County and having a child, single parents of one child, 47% of those women would have been below the self-sufficiency standard. And, not surprisingly, it is worse for the Hispanic community: 39% among the males and 58% among the females. The next column shows the corresponding rates for surrounding public use micro data areas and for the state of Pennsylvania. We don’t have time to go over all of it here, but the table is available for you to inspect on your own.

The next part (Self-sufficency Wage B PDF) actually looks at the family composition, so we were able to pick out from the PUMS the households in which there was in fact one adult and one child for which the standard $21,623 was the so-called self-sufficiency standard. In Lancaster County, out of a total of 1,630, 644 of such families, or about 40%, fell below the $21,623 standard. Again, more than that 48% of the female-headed families were below that standard, while only 21% or so of the male-headed families fell below that standard. For families composed of one adult and two children, there was a somewhat higher standard of $25,916 in 1999. You can see in the case of the 393 families that were headed by men, none of them fell below that standard. Of the 1,093 families headed by women, 825 of them, about 75%, fell below the self-sufficiency standard.

To conclude, I want to show you one more thing that Mac included in his hand-out. It is the disparity between City and suburb. The information is from the Mumford Center, which is up at the SUNY Albany. The Mumford Center has used the 2000 Census to get all kinds of data and put them out on the web, and in doing this they’ve rendered a great service. One of the things they did was to rank economic well-being in all of the 330 metropolitan areas in the United States by certain Census categories, although we don’t have time to go into discussion of all those categories at this point. But what they did, for both 1990 and 2000, was to rank central cities and the metropolitan areas within which the central cities were located for all 330 of the metropolitan areas in the United States. (Mumford PDF) According to their calculations, the Lancaster County MSA was the 58th highest out of the 330 MSAs in the United States in 1990 in terms of well-being. It slipped to being only the 81st highest in the 2000 Census data. The city of Lancaster had been the 258th central city in terms of its well-being in 1990; it was the 295th in 2000. for the suburbs, as you can see, which is the same thing as the Excity; the rankings are 90th 1n 1990 and 123rd in 2000. But the most interesting thing the Mumford Center did was to try to measure the city to suburb disparity. Now our ranking of 297th in 1990 means that we were pretty close to the bottom as measured by the disparity of the well-being between the city and the suburbs that surround it. And by suburbs I mean the entire constellation of municipalities in the remainder of Lancaster County. Remember, there were 330 MSAs; so 297th is a pretty bad ranking. We’re pretty close to the bottom, and we got slightly worse in that disparity ranking in the year 2000, 303rd. So we’re that much closer to the bottom in terms of that measurement.

The good news is we’re not as bad off as Reading or York!