We Need to Reduce New York City's Growing Poverty Rate

Last week I watched my friend David Jones, of the Community Service Society, discuss the growing rate of poverty in New York City on the all-news TV station NY1. I also read Sam Roberts' piece in the New York Times observing that one in five New Yorkers are now living below the poverty line. Citing a new report from the U.S. Census Bureau, Roberts wrote that:

From 2009 to 2010, 75,000 city residents were pushed into poverty, increasing the poor population to more than 1.6 million and raising the percentage of New Yorkers living below the official federal poverty line to 20.1 percent, the highest level since 2000. The 1.4-percentage-point annual increase in the poverty rate appeared to be the largest jump in nearly two decades.

Sadly, the persistence of poverty in New York is far from unique. Roberts notes that despite this increase, "New York still had a smaller proportion of poor people than many other major cities, including Miami, Dallas, Houston, Chicago, Minneapolis, Los Angeles and Boston." So clearly, it is not our socialist institutions like a public hospital system, public housing, subsidized mass transit and a local income tax that is killing jobs and causing poverty. Free market sun-belt meccas like Houston, Dallas and Phoenix have higher poverty rates than New York City.

Close to a third of those New Yorkers under eighteen years of age live in poverty. All of this news is disheartening and frustrating as well. New York City is a much better place to live in today than it was in the 1970s and 1980s. Those of us who remember those times know that this is a better and safer city. The City government's increased use of nonprofit organizations to provide social services has enhanced the quality of those services to people in need. David Jones and I sit on the board of an organization called Homes for the Homeless, and there is no question that the thousands of homeless families helped by that organization are better served than their predecessors a quarter century ago. Leonard Stern, the founder and Chair of the Board of Homes for the Homeless, and Ralph Nunez, its President and CEO, have combined their understanding of business, management and the politics of New York's social welfare system to create a unique and effective organization. There are many similar organizations all over this city working every day to mitigate the impact of poverty.

While much of the poverty in America is invisible to the average person, it can't be avoided in New York City. Even wealthy people here walk the streets and do not drive SUVs with tinted windows home to gated communities. The rich in this city can hide behind limos and security staff, but the geography of wealth and poverty in New York makes it difficult for the rich to completely avoid the poor. Still the extent of poverty and its impact on children is rarely a focus of our new media. We might learn that a poor child was the innocent victim of a random act of violence, but we don't hear much about the impact of poverty on their daily experiences. Perhaps American poverty today is not as horrific as it was in 1890 when Jacob Riis published his pathbreaking book and photo collection: How the Other Half Lives: Studies Among the Tenements of New York. But for a poor child living in the promised land of New York City in 2011, the impact of poverty cannot be overstated.

The politics of poverty in New York City can be quite contentious, and government officials and advocates often disagree on programs and priorities. But the goals of New York's social welfare system are not contested. Nearly all New Yorkers think that poor people should be given a helping hand and understand that both government and private resources are necessary to meet these needs. What has been missing for many years is the sense of urgency we saw during the war on poverty of the 1960s. The growing rate of poverty should be a wake-up call for anyone who thought this problem had been addressed.

As large and dynamic as this city is, it remains part of the national and global economy. The city is deeply affected by the impact of national political and economic trends. The massive federal budget cutbacks anticipated in the recent federal deficit reduction deal will have a devastating impact on the educational and social welfare programs that poor New Yorkers depend on. The weak and ineffectual effort to restart the economy is also hitting home.

What is missing for the poorest New Yorkers is also missing from the country as a whole. The possibility of opportunity for all is being replaced with the clear sense that the fifty-year effort to reduce the size of what Michael Harrington once termed the "Other America" has come to an end. The rich get richer and instead of pinning their hopes on economic growth, the middle class has been convinced that their real problem is that government "takes" too much of their money out in taxes. The Tea Party's focus tends to be on the size of the tax bill, rather than on the stuff that taxes buy. It's too bad. A nation that refuses to sacrifice to invest in the future is dooming its children to poverty. To create opportunity, both the private sector and the public sector must generate and invest resources.

In my view, Americans are under-taxed. As a result, our roads and bridges are falling apart, anti-pollution efforts are slowing down, there is no rail system, our schools grow weaker and our air travel system is a joke. Public investment in community infrastructure is in a decline. Investment is an indicator of faith in the future. The relentless negative economic environment creates a cycle and psychology of decline. The best way to disrupt that downward spiral is to get money into the hands of people who will immediately spend it. The second best solution is to invest in public infrastructure.

In the complex global economy we live in we need to experiment with new ways of stimulating a dormant economy. But we need to roll up our sleeves and get to work. If we do not want to enter a prolonged period of economic decline in this country, we need to do three things:

1. Figure out a way to invest more in public infrastructure.
2. Restore the middle class' confidence that their children will live better or at least as well than they do.
3. Reduce the rate of American poverty.