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The poverty problem

Rochester Business Journal
October 16, 2009

In his 2005 State of the City speech, then-Mayor William Johnson Jr. asserted that Rochester and similar older cities had become "warehouses for their region's poor." The 2000 census data illustrated his point: The city's poverty rate that year was 25.9 percent versus 11.2 percent for Monroe County.

Nearly a decade later, this situation has not changed. If anything, new data suggest, it has grown worse.

The 2008 American Community Survey results released by the U.S. Census Bureau a few weeks ago show that the share of Rochester's population living below the poverty line has reached 29.3 percent. While Monroe County also saw an increase, to 13.1 percent, the rate was slower than in the city, resulting in an even bigger difference between the county as a whole and its urban core.

The depth of Rochester's poverty problem becomes even more sharply drawn when comparisons are made with other cities nationwide. There are 75 cities in America with at least 250,000 residents; if Rochester ranked among them, it would be the fourth-poorest.

And the gap between fourth and first is narrow: Detroit is the poorest city, with 33.2 percent of its residents living in poverty; Cleveland is second at 30.5 percent and Buffalo third at 30.3 percent. By contrast, the median for the 75 cities is around 17.5 percent.

One additional sobering note: The 2008 survey captured only some of the impact of the recession, which began to take a heavy toll on employment late last year. The poverty problem surely has grown more severe since then.

Reducing the city's poverty rate is central to the future health of Rochester's economy. But what strategy will work, after so many seem to have failed?

Michael Porter, Harvard Business School professor and founder of the Initiative for a Competitive Inner City, has long argued that the best approach is "one of creating income and wealth" by harnessing market forces "rather than trying to defy them," as anti-poverty efforts often have done.

In other words, leverage the existing assets in inner cities. Even urban areas beset with poverty have valuable assets including human capital-and these simply cannot be wasted.

 10/16/09 (c) 2009 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303

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