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Hard Times for Sun Belt Metros

Remember when the Census Bureau released the new 2008 national poverty numbers earlier this month? Not surprisingly, the news wasn’t good, and the best guess was that the outlook would be bleakest in the Sun Belt metro areas hit hardest by the downturn in the housing market and in regions reliant on the auto manufacturing industry.

Well, now the local numbers are in. Only about one-fifth of the 100 largest metro areas experienced a significant change in poverty from 2007 to 2008, and as might be expected, most of those saw their poverty rates increase. By far, California and Florida are home to the greatest number of these metro areas; clearly, the ripple effects of the housing market collapse in these Sun Belt metros were already making themselves felt down the economic ladder in 2008.

Of course, the latest data, while giving us a glimpse of the initial impacts of the recession in 2008, are only the tip of the iceberg. The economy shed 3.7 million jobs in 2008 and another 3.1 million more by August, 2009. As the recession deepened and touched more industries, and more parts of the country, the poverty numbers undoubtedly followed suit.  That means more red dots will populate this map moving forward, not fewer, and blue dots may be fewer and farther between. 

But speaking of blue, let’s not overlook the good news here: A handful of regions actually saw their poverty rates drop in 2008, with El Paso, TX shaving as much as 3.2 percentage points off its rate (which was still very high, at about 25 percent).  Its decline, as well as Houston's, reflect the late arrival and relatively mild character of the recession in most Texas metro areas.