economics | November 15, 2012

Richard Florida: Disadvantaged Areas Were Hit Hardest By The Recession

"The residents of our most disadvantaged communities are made even more vulnerable by harsh downturns in the economy," Richard Florida said in a National Journal article. In the journal, which carries the tag line "How Demography Shapes the National Agenda," Florida uses new research from Pew’s Economic Mobility Project to highlight the important effects that our increasingly segmented society is having on the people in the highest-poverty neighborhoods in the nation. While the recession affected everyone's pocketbooks, those living in the most disadvantaged neighborhoods were hit the hardest, he explains. As the study cites, the recession had a greater impact on those "experiencing hard times before the recession hit, making any additional losses that much more harmful to their economic prospects."

One of the most crippling impacts of the recession was the housing collapse, the study showed. 70 per cent of those living in low-poverty neighborhoods (where 10 per cent or less of the population lives in poverty) were likely to own their own homes, meaning that they suffered a major loss in terms of housing equity. Those living in high-poverty neighborhoods (40 per cent or more living in poverty) however were likely to lose their homes completely. Those living in these areas were also less likely to have been employed during the recession. "Our economy, cities, and neighborhoods are becoming more divided and segmented by income and class," Florida writes. "This report provides powerful additional evidence that these differences matter."

Author of The Rise of the Creative Class and Who's Your City?, Florida often addresses the intricacies of cities and the people who live in them. In order to survive, cities need to come together rather than compete, he argues. The widening gap between the low and high income populations in major cities threatens to tear them apart and may keep them from flourishing. Florida is the director of the Martin Prosperity Institute at the University of Toronto's Rotman School of Management and the Global Research Professor at New York University. He is a highly-requested speaker, presenting his breakthrough insights to communities, businesses, and professional organizations around the world.

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work | November 14, 2012