Poverty in Chattanooga drops to 10-year low
The share of Chattanoogans living in poverty fell last year to the lowest level in a decade as the improving economy boosted employment to record highs, according to new estimates.
But even with faster job growth and eight years of sustained economic growth, Chattanooga’s poverty rate still was higher last year than it was before the Great Recession and remained above the U.S. average across most of the South.
“Employment and wages are showing signs of improving in 2016, but many workers are still being left behind,” said Ken Chilton, an associate professor at Tennessee State University who
has studied poverty in Chattanooga and other parts of Tennessee. “Unemployment is trending down, but many of the new jobs do not pay middle-class wages.”
The U.S. Census Bureau said last week the countywide poverty rate fell to 13.5 percent, while the Chattanooga rate fell to 20.2 percent. That was the lowest rate in both areas since 2007.
The number of Hamilton County residents on the supplemental nutrition assistance program also has fallen by nearly 10,000 over the past four years as jobs have become more plentiful and wages have begun to rise.
In September, the most recent month for which statistics are available, 50,419 persons in Hamilton County — about 1 in 7 people — received SNAP benefits, down by 16.4 percent from the same month in 2013 when food stamp participation peaked in the aftermath of the Great Recession and nearly one of every five people in Chattanooga was getting SNAP benefits.
“The Chattanooga area has shown some of the strongest job growth in the state, outside of Nashville, and that is helping to reduce poverty and those seeking government assistance,” said Bill Fox, director of the Center for Business and Economic Research at the University of Tennessee. “We’ve done a wonderful job of creating jobs, and that is part of the story of why poverty is going down.
“But it remains a challenge for us because our wages are generally lower than the national average and we have to become a more educated and productive workforce in Tennessee in order to help to narrow our historic wage disparity with the rest of the country.”
RECORD LOW UNEMPLOYMENT
Tennessee’s jobless rate dropped this fall to a statewide rate of only 3 percent — the lowest on record and well below the comparable U.S. rate of 4.1. Since 2013, employers in metropolitan Chattanooga have added more than 20,000 net new jobs, boosting local employment by more than 8.6 percent.
But wages remain relatively stagnant. The census bureau said the median income in Hamilton County last year was $47,898, or 16.9 percent less than the U.S. median income of $57,617 in 2016.
Chattanooga wages have risen by 15.8 percent over the past decade, but adjusted for inflation, that represents only a meager tenth-of-a-percent gain.
“Many of the new ‘techrelated’ companies have short coattails,” Chilton said. “That is, they don’t hire lots of people and, despite relatively high wages in some positions, many tech workers are freelancers who live job to job.”
Despite the declines in poverty and food stamp participation rates, advocates for the poor say they are still seeing too many people in need.
In Chattanooga, 32.4 percent of children under age 18 live in poverty, according to the new census bureau estimates. That’s double the U.S. poverty rate for school-age children.
Black Chattanoogans also were twice as likely to live in poverty as white residents last year (30.8 percent to 15.6 percent).
The number of Chattanoogans living in census tracts of extreme poverty (over 40 percent of residents in poverty) declined over the past five years by more than 15 percent, but still included 25,799 persons in the poorest neighborhoods of East M.L. King, Highland Park and East Chattanooga.
In 2016, poverty was defined as incomes of $11,880 or less for one person and $24,300 or less for a family of four.
WORKING MORE PART-TIME JOBS
Michele Johnson, executive director of the Tennessee Justice Center in Nashville, said her office hears from more people who are having to work two or three part-time jobs to try to make ends meet.
“The availability of jobs, of course, improves economic prospects, but several factors mean that having a job does not necessarily equate with economic security,” she said. “We have many more part-time jobs than we had decades ago, and many part-time jobs have erratic and everchanging schedules, which make it difficult for people to reliably combine jobs to
earn enough wages.”
Johnson said the biggest job categories in Tennessee pay way below average, such as cashiers (annual average pay $19,969), waiters and waitresses (average annual pay $19,668) and food prep workers and servers (average annual pay $18,800).
“As some folks say, ‘Yeah, I can get a job. I have three of ’em just to almost get by,’” Johnson said.
But wages have outpaced inflation in each of the past three years even as the number of jobs has risen to a record high.
WORKING FOR SNAP
Gov. Bill Haslam recently announced he will lift the waiver on the federal work requirement for able-bodied people to get food stamps in most of Tennessee, including Hamilton County.
In those areas, people without children or disabilities will have to work at least 20 hours a week to receive SNAP benefits next year The work requirements, which were lifted a decade ago when the economy soured, will be reinstated by May 1 and are expected to affect 58,000 of the approximately 1 million Tennesseans who are on the SNAP program, according to the Tennessee Department of Human Services.
“How do we with a straight face say, ‘Oh, there’s still extraordinary circumstances in Tennessee that still demand a waiver’? Absolutely not,” Haslam said when he announced the change in September. “When we hit record low unemployment three months in a row, then it comes a time to look around and say, ‘Are we doing everything the right way?’ We looked at this and thought it’s hard to justify a waiver.”
Fox said as Tennessee hopes continued progress on worker training and the economy will boost wages and lift even more people out of poverty.
“It has been perplexing to most economists why we haven’t seen more wage gains given the decline in unemployment,” he said. “The state is taking steps to improve the education and skills of our workforce, and over time that should pay off in better wage growth.”
But for now, those working with the poor insist that many are still in economic hard times and need assistance.
“We’re seeing just as many people as we ever have,” said Rebecca Whelchel, executive director for Metropolitan Ministries, which provides emergency assistance to hundreds of Chattanoogans every month. “There are still too many people in need or are struggling to recover from an illness, hospitalization or accident,”