Federal Reserve Issues Study on Concentrated Poverty, Neighborhoods in Springfield, MA, Are Among the 16 Communities Studied Federal Reserve Issues Study on Concentrated Poverty, Neighborhoods in Springfield, MA, Are Among the 16 Communities Studied

October 24, 2008
Tom Lavelle, 617 973-3647, Thomas.L.Lavelle@bos.frb.org
Joel Werkema, 617 973-3510, Joel.Werkema@bos.frb.org

The nation's Federal Reserve Banks, in conjunction with the Board of Governors and the Brookings Institution, today released a major report on entrenched poverty in the United States.

"The Enduring Challenge of Concentrated Poverty: Case Studies from Communities Across the United States" explores how pockets of extreme poverty emerge and persist in communities. Concentrated poverty is found to occur in a variety of social and economic contexts that imply the need for tailored strategies to ensure a better future for these communities and their residents. Common features are identified for the 16 communities that were studied.

The report sought to answer the following questions:

What factors are associated with the development and persistence of concentrated poverty?

What challenges does it pose for families and communities?

What is the capacity of local organizations to turn things around?

What strategies are the public and private sectors employing to ameliorate concentrated poverty and its effects?

Federal Reserve Bank of Boston researchers looked at three Springfield, MA, neighborhoods: the South End, Six Corners, and the Old Hill, all in the heart of the city. DeAnna Green, the Boston Fed's primary researcher in this effort, put the study in context: "The study highlights efforts at the local level in Springfield to effect change in employment, education, housing, and investment. It points to recent changes in the fiscal and administrative realm that are contributing to a long-term effort to move these communities toward growth."

While the 16 communities studied were collectively diverse, four factors emerged consistently from each:

  • First, it is evident that history matters. Poverty and disadvantage have tended to concentrate there over time and decades of disinvestments are difficult to turn around.
  • Second, high-poverty communities are isolated. Residents are often physically, socially, racially, and linguistically separated from the larger economy and community, and local organizations often lack the resources and capacity to respond to the wide range of community needs.
  • Third, many of these neighborhoods have experienced significant demographic changes, such as a rise in immigrant households, a rise in single-parent families, or both.
  • Finally, these communities of concentrated poverty exist within both weak and strong regional economies. 

In addition to the neighborhoods of Springfield, MA, the research studies high-poverty communities in the following locations: Albany, GA; Atlantic City, NJ; Austin, TX; Blackfeet Reservation, MT; Cleveland, OH; El Paso, TX; Fresno, CA; Greenville, NC; Holmes County, MS; Martin County, KY; McDowell County, WV; McKinley County, NM; Miami, FL; and Milwaukee, WS.

The report's findings will contribute to the Federal Reserve's understanding of low-income communities and their needs in carrying out ongoing community development partnerships in these areas. The report also identifies issues for future research.

The research is the result of a project begun in 2006, and was motivated by the recognition that problems faced by many of the poor communities devastated by Hurricane Katrina in 2005 were shared by residents of neighborhoods across the nation. While concentrations of poor people living in poor neighborhoods have been observed in large Northeastern and Midwestern cities, concentrated poverty also exists in smaller cities, immigrant gateways, suburban municipalities, and rural communities. The need for a deeper understanding of the relationship between poverty, people, and place led the Federal Reserve to join with the Brookings Institution's Metropolitan Policy Program. The resulting report contains case studies, undertaken by the Federal Reserve's Community Affairs Offices, of 16 high-poverty communities across the United States. These studies cover communities in places as diverse as Springfield, MA, Cleveland, Ohio; El Paso, Texas; and the Blackfeet Reservation in Montana.

The report is available online at http://www.frbsf.org/cpreport/.

Single copies of the publication are free from:

Publications, Mail Stop 127
Federal Reserve Board
20th and C Streets, N.W.
Washington, D.C. 20551