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Poverty and jobs

The latest Census Bureau poverty statistics brought disheartening news for the city of Rochester. Unlike the nation as a whole, which saw the first improvement in eight years, Rochester lost ground.

According to the American Community Survey estimate for 2013, the overall poverty rate for the city was 35.4 percent, up from 31.6 percent the year before and 30.5 percent in 2009, when the Great Recession officially ended. The rate for children was even worse—55.2 percent, compared with 49 percent in 2012 and 46.5 percent in 2009.

It is risky to read too much into one year’s data, especially when the numbers are estimates based on a population sample. Given that the 2010 and 2011 numbers for children in poverty were 51.1 percent and 53.9 percent, respectively, the sharp drop in 2012 looks suspect.

The bigger picture, though, is clear: The city’s overall poverty rate is much higher than the state and U.S. averages, and its childhood poverty rate is higher than almost all other midsize and large cities.

Last December, the Rochester Area Community Foundation and ACT Rochester released a study that examined poverty in the nine-county region. It spotlighted several factors that help explain the region’s high levels of concentrated poverty. Among them were racial discrimination, sprawl and the decline of good-paying jobs.

We stated then, and continue to believe now, that the jobs factor is of particular significance. As M&T Bank Corp. economist Gary Keith writes this week in his monthly RBJ column, 2013 manufacturing output in the Rochester area was 33 percent lower than in 2007, around the start of the recession. The decline of traditional industrial stalwarts such as Eastman Kodak Co. has hit the city particularly hard.

The loss of big-company jobs has not been offset by growth of other businesses. In fact, Rochester lags other cities of similar size in total number of firms. For example, Birmingham, Ala., has about 95 firms per 1,000 residents, Des Moines, Iowa, has roughly 74 per 1,000 residents and Spokane, Wash., has about 85 per 1,000 residents. In Rochester, the number is 62 per 1,000 residents.

Poverty is not a problem with a single solution. But clearly, job creation must play a key role.

9/26/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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