Institute of Urban and Regional Development

Crowded and isolated Black and Latino neighborhoods are marked by economic deprivation and social depression. Many residents of these neighborhoods are disconnected from the larger society, no longer able to share in the values or social norms of majority America. The study of this concentrated poverty has become a new mini-industry. There has been a spate of books, reports, and articls on the phenomenon, which is variously known as "persistent poverty,", the underclass," or the "new poor." The authors of this book reject the label "underclass" because it is demeaning and "new poor" because it is inaccurate. We find it more profitable to focus on the problem of separation. Poverty has always afflicted America, and even long-term poverty has been an issue during other periods of the nation's development. Today, American society faces a period of growing social and economic separation, caused by worsened opportunities for the poor and resulting in more destructive long-term consequences for them and the society as a whole.

We begin with the idea that global economic restructuring has since about 1975 altered the way political and social institutions work at every level in America. Until politics and economics are again reshaped, the problems of urban poverty will remain severe. Reshaping may begin as the pressures from urban separation force community-level institutions should be strengthened, restructured, and redirected. Multi-local coalitions should be formed to press for re-allocation of federal resources in favor of domestic needs and for re-regulation of the national economy in favor of workers and common citizens. Only then can a successful attack begin on the problems of persistent poverty.

To set the stage for directing the reader's attention to the conditions under which neighborhood organizations and municipal governments can mount a successful attack that will modify the structure and management of the national political economy, we have collected props from a wide-ranging survey. We begin by looking at such broad concerns as the behavior of the global economy, and we conclude with a focus on such narrow questions as the viability of particular municipal programs to alleviate poverty.

In the middle sections, our survey shows in detail how persistent poverty in American cities is connected to various influential structures and processes: the global economy, the U.S. industrial structure, federal social policy metropolitan labor markets, and finally, local politics and policy. We imagine a network of connections. At each of five nodes some of these processes are going through changes, being "restructured" or reorganized.

Until quite recently it was assumed that basic needs -- such as housing, education, health care, neighborhood safety, and jobs -- could be made available to nearly all Americans. Programs to provide these necessities had been expanding for over 50 years, the guarantee becoming over time more accepted as a social responsibility; but suddenly this basic commitment to a social contract has been changed. American society now promises little and delivers less to people or communities who cannot provide for themselves. In the process of transformation, the world's richest nation is creating a third-world sub-society within its own borders.

Policymakers have adopted three ways of thinking about these emerging problems. Some hold to the notion that poverty is increasing because a lax welfare state has generated a large group of "non-participants," "marginal people," bums. Probably a larger group of policymakers think the rising problems of the poor are caused simply by cutbacks in resources devoted to social equity. A third group sees poverty as an almost inevitable consequence of the vagaries of the market, made worse in recent years by globalization of the economy and lack of a national economic plan.

Our argument is that the recent upsurge in persistent urban poverty has been generated by a particular set of American political responses to transformations in structure of the global and domestic economies, exacerbated considerably by a long process of highly subsidized suburbanization and by racism. The purpose of this book is to support this argument by reviewing and interpreting research on the global economy, industrial change, and public policy. In doing this we are able to estimate their combined effects on cities, neighborhoods, and residents.

Since the late 1970s the global economy has become increasingly integrated, and American corporations have moved world-wide in search of cheaper ways to produce to meet stiff competition. As a result, American workers have felt a steady erosion of their power and a persistent reduction in their standard of living. There is a trickle-down effect in reverse, a backwash that swamps American labor. Unskilled workers have been marginalized by widespread plant shut-downs and blue-collar lay-offs, and they have found a paucity of good career ladders, stuck instead in low-wage, dead-end, service jobs. At the same time, many poorly prepared immigrants have arrived; many women have come to head families, finding themselves unable to support households on their own;) and discrimination against minorities has continued. While some Americans have benefited financially from the post 1970 changes, the poorest have been pushed down or cut adrift. The federal government, preoccupied with global-economy issues, and careful to be responsive to the growing demands of its new, upper-middle-class, suburban constituencies, has sacrificed the urban poor. State and local governments have also retrenched, adding to the crisis, by responding to demands for austerity from business, tax-paying voters and public officials alike.

When the squeeze came from the global economy, public institutions were unprepared to relieve the inevitable difficulties the poor would encounter. Corporate redeployment and government economizing insured that city labor markets would turn sour, especially for basic jobs. Federal funds for cities and poor people were cut and guarantees for benefits and services were reduced. The tax revolt was managed by new politics that coalesced after 35 years of white, middle-class suburbanization; the budget reductions hit hardest of all on public jobs and services in central cities. In the scramble to survive from shutdowns, contractions, layoffs, and budget cuts, everyone with any power tried to get out and get ahead, and those with less power got left farther and farther behind, increasingly separated from the main society.

The majority of Black Americans and Latinos already were subjected to relatively low wages, bad housing, and poor schools. Most women supporting children by themselves already had great difficulties. New immigrants from Latin America and South East Asia were already near the bottom. In earlier years, economic growth and the development of a more liberal society had allowed some in such situations to escape the poverty of the ghetto and the bad barrios, and because many believed in this promise, some communities had an aura of hopefulness. But with the job losses and the program cuts replacing around economic growth, and the new self-interest replacing community and collective interests, the situation worsened for those left behind; their expectations plummeted, and their communities became isolated.

We find that cities and even neighborhoods have had to turn more and more to their own energies and resources. It is true that they are strapped tightly to small budgets, have made little dent so far on the most serious problems, and will ultimately have to depend on private-sector job growth and re-established, well-funded, federal transfer programs. But local governments and community-based organizations are close to problems, and they have both the opportunity to become involved and the need to revitalize these poor communities. Their role in solving community problems has escalated over the last two decades, along with rising expectations for them to intervene. City halls and community organizations are therefore forced to innovate, press demands, and represent neighborhoods.

From this pessimistic dilemma arises the main line of our optimism, our principle recommendation for policy. At the national level, action to reduce poverty is at a standstill, or worse. At the local level, resources are not available. But because problems are deep, apparent, and threatening to local authorities, local political movements have grown more successful; both community organizations and city halls have turned seriously to the task of dealing with poverty. As they well know, on their own they cannot succeed; but through cooperation, through state and national coalitions, and by means of other influences on national politics, these progressive local political movements can move toward success. New policies should be directed toward strengthening such possibilities.

In Chapter One, after a cursory review of theories of poverty, we lay out our major thesis and preview the various arguments and findings of the book. In Chapter Two we document the appalling conditions of poor and minority people in central cities, explaining why persistent, concentrated, urban poverty ought to be seen in relation to the separations that result from inequalities in the entire distribution of income and wealth. In Chapter Three we analyze the connections between the structure and movement of the new global economy and the dilemma of the poorest Americans. There we examine widely dispersed, globalized markets and production arrangements that are managed by the tightly centralized control systems of major corporations. In Chapter Four we extend the arguments and see how changing industrial patterns have worsened the structure of opportunities facing most American cities and workers. Simultaneous dispersal of jobs and centralization of management have removed good jobs from cities and left behind minorities and women, and their children. With limited social contact outside their embattled neighborhoods and with weakened social contracts tying them to the larger community, these people have settled into a persistent poverty that leaves few routes for escape. In Chapter Five we first see how economic changes have led to a new, conservative politics. We then examine policies of the federal government, local government, and community-based organizations, finding what is innovative about them and what constrains them. There we argue that only through local reconstruction and a new organization of politics, involving grass-roots and neighborhood groups in new ways, will pressure build up for the required transformation in national politics that will rechannel funds toward domestic needs. In the end, democratic participation and politics will have to take control of the economy, or else poverty will indeed persist. The sources for new change are to be found in coalitions formed from below. Finally, in Chapter Six we propose specific ways that new energy and attention can be refocused in improved policies at all levels of government.

There is a tension throughout this study. We are faced with a conflict between two findings. On the one hand, powerful global economic forces play a major role in determining the life chances of American citizens. On the other hand, the situation of the poor can be radically improved through a staged process of local empowerment, the formation of new political coalitions, and the consequent reformation of a national agenda.

The reader may find, concerning the first view, that the arguments in Chapters Three and Four appear to be top-down and accepting of the force of structural arrangements like competitive markets, and too despairing of the potential good influence of human agency, through social movements, political action, and the like. The arguments in these chapters display our deep concern that global economic forces be better understood by the nation's policymakers, so that global contributions to severe poverty in American cities can be traced through to corporate behavior in a newly expanded, more competitive, and highly integrated world market.

At the other extreme, the reader may find that the tasks we set in Chapters Five and Six for changed local governments and coalitions of local forces are too demanding; chances for challenging and improving federal policy may seem remote. We acknowledge this risk of asking the reader to examine both sides of the question, but do so because the problems of urban poverty in the United States today are immense, and their resolution will require complex solutions and far-reaching changes.

This study began in 1989 for a report to the Rockefeller Foundation on the current state of research on persistent and severe urban poverty. The idea grew out of the authors' discussion with James Gibson and Erol Ricketta, who were concerned with the relationships among economic structure, local institutions, and persistent poverty. The Foundation's Equal Opportunity Division provided generous financial support. Our survey of research and analysis was done together with a team of graduate students at Cornell University and the University of California at Berkeley; Lisa Bornstein, David Campt, and Elizabeth Mueller researched and drafted chapters; Robert Letcher, Sharon Lord, Susan Sullivan, and George Washington assisted. The work was done mainly under the auspices of the University of California's Institute of Urban and Regional Development. We thank Marie Floyd, David Van Arnam, and Demetra Dentes (et Cornell) for editing and typing; and Cathy Girardeau and Arieda Martinez, who efficiently helped with typing.