In testimony to Congress, Datta advised that pov-
erty estimates should be viewed with extreme cau-
tion. The GAO’s analysis of 11 different issues
related to noncash benefits, asset holdings, and the
classification of poor or nonpoor showed that all but
one alternative treatment had sizeable effects, and
eight caused significant shifts between statuses. The
analyses also showed that blacks, the elderly, and
individuals in families headed by women are par-
ticularly likely to be affected by definitional vari-
ations. Sawhill concludes that adjusting income for
in-kind transfers would reduce poverty rates by two
to four percent. Adjusting for asset values would
reduce rates “a few percent” more.
The share of the U.S. population living in poverty
has changed relatively little since the late 1960s,
remaining between 11 and 14 percent for the last
twenty years (Levy). The geographic and demo-
graphic composition of our poor, however, is very
dynamic. One of the great successes of recent times,
for example, is the dramatic decline in the poverty
rate among the elderly population, which has fallen
from 28 percent to 11 percent. Black and Hispanic
populations, on the other hand, have seen little im-
provement and have poverty rates nearly three times
that of the white population. More importantly for
the purposes of this study, the poverty rate in rural
(or nonmetro) areas has increased relative to that in
other locales.
The fact that rural poverty levels are higher than
urban poverty levels in often treated lightly, because
the rural cost of living is assumed to be lower.
However, since cost of living data are not collected
in rural areas by the Department of Labor, there are
no commonly accepted means of assessing actual
rural-urban price differences. Rural people tend to
spend proportionally more on transportation than
urban residents, the same on food, but less on hous-
ing and on nonessentials such as entertainment
(Ghelfi). This may suggest that lower living costs do
not compensate for rural-urban income differences,
but it is indirect evidence. Assessing the rural costs
of living is a policy objective difficult to accomplish
with currently available information (Starr).
Sawhill identifies the factors which have most
influenced the dynamics of the measured poverty
rate over the past two decades. The two factors most
influential in keeping the national poverty rate down
have been the large increases in government trans-
fers and in human capital development that have
occurred. Total real transfers increased by 37 percent
from 1975 to 1984. The proportion of U.S. adults
possessing a high school diploma increased from 26
percent to 48 percent between 1970 and 1985. The
gains from these phenomena have, however, been
offset by demographic changes (primarily the huge
increase in female headed households) and the
slower growth and higher unemployment rate&of the
1980s, leading to a nearly constant national poverty
rate for the period.
Rural areas, and particularly the rural South, have
been less successful in exploiting the benefits either
of education or of government transfers than the
nation as a whole (O’Hare). Meager allocations to
education and direct transfers have been insufficient
for alleviating the experience of poverty and pre-
venting the reproduction of poverty. Compounding
this is the higher vulnerability of the rural South to
the cyclical downturn and economic restructuring of
recent years. Nationally, a one percent increase in
unemployment increases the poverty rate by 0.7
percent. Southern and rural economies have per-
formed even more poorly than the U.S. economy as
a whole.
The extent and nature of rural employment prob-
lems and disadvantages vary with the definition
“rural” (Bailar and Rothwell). For instance, unem-
ployment is lower in rural areas than in urban areas,
but higher in nonmetropolitan than metropolitan ar-
eas. This inconsistency arises because of the distinc-
tion between “rural” as a residence pattern and
“rural” as a labor market (Berry; Bogue and Beale).
People living in open country areas may commute to
large urban centers and thus participate in urban
economies (Fuguitt, Brown, and Beale). In general,
researchers tend to be most concerned with job op-
portunities and income, suggesting that nonmetro-
politan - metropolitan is a useful contrast, but that
there may be better distinctions which could be made
(Molnar, Nelson, and McGranahan).
SPATIAL DISTRIBUTION OF RURAL
POVERTY
For the South, as the nation’s poorest region, it is
clear that the Civil War liberated a large portion of
the labor force, but is also represented a long-term
setback to the nation’s economy. Resources and
wealth were lost to the war effort, and the loss of
infrastructure and the fragmentation of human capi-
tal and organization turned what had been the
wealthiest part of the country into the poorest. These
effects, coupled with fundamental changes in the
cotton economy and other economic shifts resulted
in the South’s inability to fully regain the productive
position and capability it had held when its economy
was based on slavery.
Nationally, wealth is concentrated in coastal cities
and the large urban centers of the Midwest. The East
is the wealthiest region in terms of per-capita in-
come, and the South is the poorest. Poor people are
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