News

Suburban Poverty Up 'Nearly 64%'

The Monkees' 1967 song, "Pleasant Valley Sunday," referred to the suburbs as "status symbol land."

Today, however, instead of keeping up with the (Davy) Joneses, many suburbanites are just trying to keep up with themselves.

New research shows that poverty has spread faster in the suburbs than the inner city.

The number of suburban residents living in poverty rose by nearly 64 percent between 2000 and 2011, to about 16.4 million people, according to a Brookings Institution analysis of 95 of the nation's largest metropolitan areas. That's more than double the rate of growth for urban poverty in those areas.

"I think we have an outdated perception of where poverty is and who it is affecting," said Elizabeth Kneebone, a fellow at the Brookings Institution and co-author of the research. "We tend to think of it as a very urban and a very rural phenomenon, but it is increasingly suburban."

CNBC, March 22

The reasons for a rapid rise in suburban poverty?

Well, many Americans still haven't recovered from the real estate bust. Unemployment and under-employment remain historically high. Households that used to have two breadwinners now have only one. Put simply, the recovery of the stock market and corporate earnings haven't exactly trickled down to America's most impoverished. But some research suggest these recoveries are living on borrowed time.

A recent Fox News headline, "Record $80.4 Billion Spent On Food Stamps [in 2012]," puts the rise of poverty in suburbia into perspective.

Leading deflationist Gary Shilling explains why in a March 20 Bloomberg article, "Why Global Economies Face an Age of Deflation":

Declining real median household income, even in this recovery, is depressing consumer spending power. ... According to the Federal Reserve’s Survey of Consumer Finances, real median net worth fell 39 percent from 2007 to 2010, the latest available data.

Robert Prechter also sees an unfolding deflationary trend. He writes:

The Fed is doing everything it can to try to keep the credit balloon inflated. But it’s failing, because the markets and the economy are certainly not zooming, despite all the QEs and 0% interest rates.

The Elliott Wave Theorist, October 2012

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