Most Impoverished Cities

In 2008, U.S. median income fell to $50,303 from $52,163 in 2007. That 3.6% decline is the largest one-year drop since records begin. The poverty rate increased to 13.2% from 12.5%, meaning the recession has brought 2.6 million more Americans into poverty. The Economic Policy Institute projects that in the next two years, incomes could decline by another $3,000 and poverty could increase by 1.9 percentage points.

To find out who is being hit worst, Forbes used new data from the U.S. Census Bureau's 2008 American Community Survey. Although the Census Bureau defines poverty simply as people earning below a certain income level, (which varies based on family size). They also looked at per capita incomes for a region, the percentage of food stamp recipients, the percentage of people under age 65 receiving public health care and the unemployment rate.

Poverty may once have been worst in the Deep South. And cities on the border with Mexico are plagued with poverty. But the recession--and the decline of American manufacturing--has left Rust Belt cities with comparable levels of poverty. The problem is concentrated in these three regions. All 10 cities on our list are southern cities, border cities or declining manufacturing centers.

Four southern cities make the list: Pine Bluff, Ark.; Albany and Macon, Ga.; and Rocky Mount, N.C. In these cities, per capita incomes are between $18,000 and $23,000, but the bottom 20% are bringing in between $7,500 and $8,500.
The most impoverished region is at the southern tip of Texas. The metropolitan statistical areas for McAllen and Brownsville, Texas, have the lowest incomes and most food stamp recipients of any in America.

"When looking at the entire [metro area] we have a lot of communities that do have large pockets of poverty," says Mike Perez, the city manager of McAllen, Texas. "A lot are recent immigrants--that's part of it. There's a language barrier. And because they're recent immigrants, they don't have the education. That's tied to having jobs that pay well. It's a bit of a vicious cycle."
Despite the discouraging statistics, McAllen has been adding jobs rapidly--Forbes rated McAllen the best medium-size city for job growth earlier this year.
Further west, in El Centro, Calif., and Yuma, Ariz., incomes are higher, but Yuma and El Centro have the highest unemployment rates of any cities in the country.
Cathy Kennerson, CEO of the El Centro Chamber of Commerce, says a host of alternative energy companies--in geothermal, wind, biomass and solar--are looking to invest in the region, but she says Uncle Sam is holding things up with a slow approvals process.

Finally, the industrial Midwest is creeping onto the list. The metropolitan areas around Saginaw, Mich., and Flint, Mich., have some of the worst poverty in the nation. Although per capita incomes are higher, the percentage of the population living below half of the poverty line is near 10% in both cities, and 15% of the populations are on food stamps. Other cities in the region are not far behind as manufacturing jobs continue to disappear.

Source: Forbes