urban economy essay
lqw091123
LectureSlidesPoverty.pptxPoverty
Adapted from various sources
What Is Poverty?
The World Bank Organization:
“Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time.
Poverty has many faces, changing from place to place and across time, and has been described in many ways. Most often, poverty is a situation people want to escape. So poverty is a call to action -- for the poor and the wealthy alike -- a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities.”
Poverty in the United States
2015 poverty threshold for family of four was $24k/yr
46 million Americans currently in poverty
Roughly 15% of the population
More than half of kids in public school poor enough to qualify for lunch subsidies
1.5 million “ultrapoor” households in US live on less than $2/day. This is double what it was in 1996
Number of Americans living in concentrated areas of high poverty has doubled since 2000
An astounding 45% of black children live in areas of concentrated poverty
Poverty Around the Globe
Almost half of the world population live on less than $2.50/day
According to UNICEF 22,000 children die each day due to poverty. That’s over 8 million kids per year.
Many are in South Asia and Sub-Saharan Africa.
Approx. half of all children in the world lives in poverty
Poverty Relates Back to Previous Topics From Class
Housing Market
Government Policies
Crime
Education
Transportation
Neighborhood Choice
Urban Growth
Spatial/locational decisions
Environmental Inequalities
Urban Poverty
Cities typically have a large number of poor people living in them. Why?
For the U.S., Approximately 20% of the population in central cities live in poverty verses only 7.5% of the population in the suburbs
Original theory was this was because rich people want to live where land is cheap, but the income elasticity of demand for land is far too low to explain the poor’s urbanization
What do you think?
Urban Poverty is an International Phenomenon
Urban poverty not just present in U.S. but also internationally, where poor tend to disproportionately live in central city areas
Glaeser discusses favelas in Brazil
African cities have a combination of stunning wealth and incredible poverty
Chinese cities also have great wealth and poverty
The rural-urban migration in China is one of the largest migrations in human history
Poverty in Chinese Cities
Agricultural reforms in China (late 1970s) led to increased agricultural surplus
Spurred urbanization
In spite of government restrictions on internal mobility, hundreds of millions have moved to cities since then
Contributed to major upward mobility by poor Chinese (huge growth of middle class over past couple decades)
Reasons for Urban Poverty
Role of transportation
Costs to own/maintain a car are high
People in poverty rely on public transportation, which is more abundant in central cites
We actually see concentrations of poor typically around train stops/bus routes/highways, etc.
Cars are practically required in suburbs so many poor choose not to live there – harder financially on them to get around
Reasons for Urban Poverty
More local and concentrated job opportunities in cities, which reduce the time and search costs for employment
Economic opportunities attract the poor to cities
Includes immigrants
People from poor rural areas (Aboriginal communities, former maritime fishing villages, etc.)
These resources/opportunities gives them hope of getting out of their situation one day compared to rural or suburban areas
Reasons for Urban Poverty
Cities have better services for the poor than smaller towns
many more shelters, food banks, and free recreation for the extremely poor to enjoy in inner cities compared to suburban or rural areas
Glaeser argues healthy cities attract the poor!
Should ask what you are doing wrong if not attracting them
Urban Poverty Paradox
Interestingly, some have argued that it is the presence of the poor that keep the cities healthy
Create supply for domestic services
Help keep prices down for all who live in the city
Other Reasons for Urban Poverty
People in cities are younger than the national average
therefore tend to have lower incomes
Since other poor individuals have located to urban areas it offers a community of similar individuals; this may provide mental and emotional support for one another
Some poor neighborhoods may be trapped in poverty
as their population grows, so does population of poor in the city
Cycle of poverty or poverty traps
Spatial Composition of the Poor
We know poverty is concentrated in Urban areas, but why in some cities like New York City or Paris is it the very rich that live at the urban center and not the poor?
Compared to areas like Detroit or LA where the poor are at the very center of the central city
Spatial Composition of the Poor
Transportation
Racial tipping and Ethnic Enclaves
Spatial Mismatch Theory
Crime rates
Housing
Amenity-based theory
Why do we care about urban poverty?
To the extent poverty is temporary, we don’t worry too much about it
But lasting poverty can cause great harm to individuals, their kids, people around them
Crime
Poor quality schools
Poor access to role models for kids
Poor health
Poor economic growth
Homelessness in the US
Over 600k people are homeless on any given night in the US
Number of homeless children has increased by 60% over past 6 years
In NY City police identified more than 80 homeless encampments, described as an epidemic
Many are homeless because can’t afford rent and smaller supply of low-income housing
Many lost home in Great Recession making it harder to find affordable rental housing
Home ownership has declined over the past 8 years
New Ideas to Homelessness
Shelters tend to be run inefficiently, wasted resources
Many cities have plenty of vacant apartments or other rentals
Many homeless or very low income stay in cheap hotels/motels because can’t afford hefty down payments/security deposits for rental units
Landlords hesitant to rent to people without recent rental history and low incomes
Solution: instead of shelters use money to help pay for entry fees and as an insurance to landlords for any damage done to property
Educational Inequalities
Schools in central cities tend to be lower quality than suburban areas
Tied to local property taxes
Lack of funding and tend to be more costly to run
Poorer quality teachers (cheaper)
Children getting poor education
Hurts their opportunity/chances to get out and be a high skilled worker if having educational deficits
Peer- effects and neighborhood effects also present and negative to educational success
Health Inequalities
Hard to be productive if hungry and unhealthy
Lacking basic nutritional needs
Body needs so many calories/nutrients just to survive and need over this to have energy
Hard to do laborious low-skill jobs without right food/nutrition
Lacking money to pay for doctors or medicines when sick
Hard to make more money if not being productive, hard to be productive if can’t afford to be healthy
Poverty trap
Environmental Inequalities
Exposed to more pollution/toxins in air and water
Oldest structures
lead paints, old pipes, mold, etc.
Hazardous waste sites often near poor neighborhoods
NIMBYism elsewhere and have time and money to fight against placement
Inner city schools have more blacktop and less green space/trees/shade
Toxins from blacktop on hot days breathed in by kids
Worse sun exposure
Addressing Poverty
Providing education and economic opportunity are the best approaches, though expensive
Income support to tide people over (welfare programs)
Job retraining
Early childhood education
Coordinated regional approach is useful, or poor will tend to migrate to cities with more progressive policies
Mobility is important
If people can move where jobs are, poverty is likely to diminish
Some anti-poverty policies inhibit mobility
Policies targeted at poor places rather than poor people (people stay there to receive benefits)
e.g., Welfare amounts are more generous/lenient in some cities verses others
Provides incentive to stay in these cities, even though jobs may be elsewhere
Design aid to poor so it can move with poor (remove barriers to mobility)
