Global Policy Forum

By Nina Bernstein

For years, antipoverty efforts have stressed work, education and marriage as the way up the economic ladder for the single, jobless mothers who seemed to account for the bulk of urban poverty. Now a new analysis of census data shows that in New York City, in the midst of an economic boom, poverty rates rose sharply among just the kind of families with children that were supposed to be safe: those that include two parents, a worker and a household head with more than a high school degree.

Comparing three years ending in 1998 with the last comparable stretch of prosperity, in the late 1980's, the study found that the overall rate of poverty in New York City among families with children climbed to 32.3 percent from 29.3 percent, despite a rise in education and employment that would have been expected to reduce poverty.

The official federal poverty threshold is $13,133 for a family of three.

The study, released yesterday by the nonprofit Community Service Society, suggests a collision of several trends: the growing gap between rich and poor, a surge in immigration and, as welfare changes push recipients off the rolls, increasing competition for low-end jobs with eroding wages.

The most optimistic interpretation is that new immigrants are a major factor and that as they assimilate, they will move up and into the middle class. But more ominous trends are seen by Mark Levitan, the author of the study and a senior policy analyst at the Community Service Society, which has been tracking poverty for years.

The gains in education and increases in jobs were outweighed by the emergence of a "new poor" within groups long considered largely immune to poverty, he said, as middle rungs of the economic ladder disappear. For example, poverty rates rose by 10.6 percentage points for families headed by people with some college, and increased by 4 percentage points for families headed by someone with a bachelor's degree or more. Poverty also rose for families that included one worker -- by 8.2 percentage points -- even as poverty rates fell by 6.9 percentage points for families with no worker present.

And for families headed by a married couple, the poverty rate rose by 6.7 percentage points, even as the rate dropped by 5.1 percentage points for families led by women.

Though the study is the first of its kind, it echoes recent reports by the state comptroller's office that have highlighted an increase in payroll jobs paying less than $25,000 a year, coupled with a decline in the number of payroll jobs paying higher wages, and a study by the nonprofit Fiscal Policy Institute tracking a sharp increase in the working poor in New York City that has outpaced a similar trend in the nation.

The working poor include people like Doris Argueta, a cashier at the Metropolitan Opera House cafe, who looks at the furs and jewelry of operagoers and wonders why her wages were stuck in the $6 an hour range for two years and still have not risen above $7.66 an hour, despite a push by employees to unionize.

"Sometimes, I think because I don't speak very well English they're going to pay like that," said Ms. Argueta, 32, who left El Salvador seven years ago and shares a two-room apartment with her child and an unrelated family. They also include John Hunter, a 37-year-old native New Yorker and a married father of six, who feels he gained no real ground moving from $6 an hour as a security guard in the late 1980's to $7 an hour buffing floors and scrubbing toilets from 5 p.m. to 1 a.m. in a building near Wall Street for a large cleaning company.

His wife works fluctuating hours at a shoe store on Staten Island, where she is making $7.45 hourly after three years. "We're finding it very hard to pay bills," Mr. Hunter said. "I'm not getting ahead at all, not with the wages I'm being paid and no benefits."

Marcia Van Wagner, chief economist for State Comptroller H. Carl McCall, called the results of the structural shifts distressing. "At the low end, you have lots of jobs and declining real income," she said. "At the high end, you have not that many jobs, but increases in inflation-adjusted earnings" like exercised stock options. The rewards of increasing productivity are concentrated at the high end of the spectrum, she said.

"This wasn't supposed to happen," said David R. Jones, president of the Community Service Society. Mr. Jones said that the signs documented in the new study were "ominous" coming as they do at the height of an economic boom. But Lawrence Mead, a professor of political science at New York University who has written extensively in support of the welfare overhaul, disagreed, calling the increase in poverty small compared with the sharp reductions in city welfare rolls. Families are better off over all if they earn money rather than getting it from welfare, he asserted, even if their incomes drop.

"I'm not saying it won't be trouble in the future," Professor Mead added. "I think there is enough increase in the labor supply due to welfare reform that there might be some tendency for real wages to fall slightly. I'm not saying that welfare reform is finished: there is a question of making work pay."

The city's figures stand in sharp contrast to the nation's as a whole, which had a flat poverty rate of 15.8 percent for families with children in both periods, and tiny, probably statistically insignificant increases in poverty among the more educated, Mr. Levitan said. The number of working poor families increased by 60 percent in New York during the 1990's, much faster than the nationwide increase of 24 percent.

One reason for the difference is that the city is one of a handful of places in the nation that draw poor immigrants from around the globe, Mr. Levitan said. But the proportion of poor families that are foreign-born is roughly the same as in the population as a whole, he said, contending that the trends captured in the study cannot be explained away by immigration alone.

Other factors he cited were structural changes in the city's economy that were ahead of the rest of the country, like the rise in corporations using temporary or contract workers, and the rapid expansion of a low-wage service sector catering to the affluent, from busboys and take-out food delivery men to child-care workers. "The problem is," Mr. Levitan said, "we are telling people to climb out of poverty on a downward-moving escalator."

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