Poverty up in third of Detroit area communities

Brian J. O'Connor, Christine MacDonald
The Detroit News

Metro Detroit continues to stagger through its recovery from the Great Recession, even as auto sales soar to a record and the state jobless rate plummets.

Eastpointe City Manager Steve Duchane says he has not seen any evidence more residents are requesting financial assistance or help.

The pain lingers not just in the region’s biggest cities, but also in some of its smallest suburbs, where household incomes are stagnant, if not smaller, and poverty is creeping up.

According to U.S. Census figures released Thursday, more than a third of Metro Detroit communities slipped deeper into poverty. The data from the American Community Survey also shows that in the majority of communities average household incomes also fell during the past five years, compared to the previous five-year survey period.

Explore the 2015 Census / Income - The Detroit News

In the hardest-hit communities of Inkster, Eastpointe, Melvindale and Keego Harbor, poverty rates jumped more than 12 percentage points. In Keego, 22.2 percent of residents were found to be living below the poverty line, while the level in Inkster rose to 37 percent. In 2014, the census sets the poverty level at an individual annual income of less than $12,017.

A total of seven communities in Wayne, Macomb and Oakland counties saw poverty rates increase by more than 10 percentage points, according to the survey. In addition, 41 percent of the 150 communities surveyed had at least 10 percent of residents living in poverty.

Significantly big drops in household income hit 16 Metro Detroit communities that all saw losses of more than 20 percent, after adjusting for inflation. In Inkster, the median household income dropped by $10,113, while Ortonville incomes eroded $27,714.

In Eastpointe, City Manager Steven Duchane discounted reports the Macomb County suburb’s poverty rate may have doubled.

“Statistical data is fine and I don’t mean to pooh-pooh it, but it is not the full picture of a community by any means,” Duchane said of his city of 33,536 residents. “There are some people here who are hurting, but it doesn’t feel like double the poverty level.”

Duchane said he has not seen any evidence more residents are requesting assistance or help from city offices.

“Voters — 61 percent of them — approved a 14-mill increase in February for police and fire service,” Duchane said. “You don’t do that if you can’t afford it.”

Out shopping Wednesday, 67-year-old Izella Pomilee, an Eastpointe resident for more than five years, added: “I like it out here.”

Few signs of improvement

All in all, there was a significant drop in household income for 57 percent of the 150 communities surveyed in Wayne, Oakland, Macomb and Livingston counties, while 35 percent saw poverty get significantly worse.

Only three saw meaningful improvements in their poverty rates and just one — Iosco Township in Livingston County — upped its household income.

The census estimates released Thursday provide the most detailed glimpse of economic and social changes in Metro Detroit’s smaller suburbs of less than 65,000 residents since the American Community Survey was launched in 2005. For these areas, the data is released in five-year averages because the census collects data through a survey and margins of errors typically are larger. More current one-year estimates for larger cities were released in September.

Because the estimates released Thursday are five-year averages, the numbers don’t necessarily reflect the economic state of the region’s communities today, noted Xuan Liu, manager of research and data analysis for the Southeast Michigan Council of Governments.

After the steep, historic declines that hit nearly every household during the Great Recession, the region’s economy is improving, but not enough yet to fix all the previous damage to family incomes.

“The key thing is that this is a five-year accumulation of data from 2010 to 2014,” Liu said. “When we see a decrease or increase, it’s not necessarily telling us that trend is continuing right now.”

For example, Oakland County’s median household income increased 5.5 percent from 2010-14, but it decreased 11.5 percent from 2005-09, Liu noted. In the same periods, Macomb County gained 2.3 percent after losing 13.8 percent and Wayne County gained 3.5 percent after shrinking 15.1 percent.

“Obviously the median household income has not recovered to the pre-recession level when adjusted for inflation,” Liu said. “Our economy and income is picking up for most of the region, but not making up yet. We still have a long way to go.”

Communities ‘took a hit’

Nonetheless, the trends in these new numbers do reflect the withered post-recession reality that still hangs over the state and nation. Per-capita incomes have lagged or even shrunk in terms of real dollars, high-wage, low-skilled jobs have been replaced with low-wage often part-time work, and poverty has been growing in the suburbs for several years.

“The recession in Michigan held on well past 2010 and for many communities it ran until 2013 and was actually worse after 2010,” said Kurt Metzger, demographer and founder of Data Driven Detroit. “These numbers show that a lot of communities really took a hit.”

The drop in incomes and rise in hardship in small communities is partly from lower-income people moving out of bigger cities and a larger number of people — especially older workers and those with less education — dropping out of the workforce, said economist Lou Glazer, president of Michigan Future Inc. At the beginning of 2000, Michigan had 423,000 more workers in the labor force than in October of this year.

“I think part of it is people moving out of Detroit into the inner-ring suburbs, particularly when housing prices collapsed, so some of that is central-city poverty moving out,” Glazer said. “Some of it is that even though the unemployment rate is down, the number of people working is down, too. All those people not in the labor force drive up poverty rates.”

Meanwhile, more people have gone broke in the suburbs. According to an analysis from the Brookings Institution, between 2000 and 2008-12, the number of suburban poor living in distressed neighborhoods grew 139 percent.

“It may be more low-income residents moving to suburban communities, but it’s also about long-term suburban residents becoming poorer over time,” said Elizabeth Kneebone, a fellow in the Brookings Metropolitan Policy Program. She added that in the wake of two recessions since 2001 and the growth of low-wage jobs, “Even if a family is working full time it may not be enough to be above the poverty line.”

In addition, “Suburban poverty can also be hidden,” she said. “Residents may not realize how much need has grown in their own communities.”

In Highland Park, which has closed its high school and shut down its water system, nearly 50 percent of residents live in poverty.

Dispute over the numbers

Keego Harbor Councilman and Mayor Pro-Tem Sidney Rubin scoffed at the idea of a 22 percent poverty rate in his community.

“I don’t believe that — I just don’t believe those numbers,” said Rubin, a 12-year resident who has served three terms as mayor of the community of 3,000 citizens. If 22 percent of Keego Harbor were living at the poverty level, Rubin said, he’d know it.

“Look at our neighborhoods, our waterfront — we have millions in development going on including a project of $200,000 homes that have sold out,” Rubin said. “Building permits and property values are both way up.”

In Ortonville, a community of about 1,500 residents that saw its per-capita income numbers sink from $77,137 to $49,423 for a whopping drop of 36 percent, Village Manager John Lyons found the census report “disturbing and exciting.”

He said he plans to contact several federal agencies in light of the news.

“I’m definitely going to be making some calls,” Lyons said. “We can’t get help (federal or state grants) for anything around here because of the income level number. We don’t qualify for anything. Other communities that are more affluent near us get all kinds of aid but we can’t even get a dime to improve our roads.”

Poverty in Highland Park didn’t significantly worsen, and the rate of 47.6 percent comes as no surprise for the troubled suburb. Highland Park has closed its only high school, shut down its water system and lost half the city’s streetlights because of unpaid bills. The town was nearly dissolved earlier this year over debts of more than $25 million to the Detroit water system.

Highland Park has especially struggled since Chrysler relocated its headquarters to Auburn Hills in 1992, a move that robbed the city of its manufacturing base, a move that cost the city 75 percent of its tax base.

Said Mayor DeAndrew Windom: “We never really recovered.”