A recently-issued study by the Federal Reserve Bank of Boston shows that poverty in the suburbs is far more pervasive in higher-income census tracts than previously thought.

The Fed’s most recent Community Outlook Survey spanned the six New England states, but the report’s authors chose to focus on two Connecticut tracts, New Haven and Hartford. The authors say that the results, gathered from all six New England states, could be extrapolated across New England.

The lack of public transportation in the suburbs requires car ownership for each jobholder. The study authors pegged the cost of operation for one car at about $3,500 a year, or up to 56 cents a mile. Multiply that by the number of jobholders in a household and transportation represents a significant cost drag, taking resources away from other long-term goals such as emergency, college and retirement savings, and building home equity. Lack of affordable housing and the high cost of child care, pitted against the lack of high-paying jobs in the suburbs within economical commuting distance, is the study’s takeaway lesson.

Survey Said

The Fed states that in April of this year, a total of 175 service providers from the economic development, affordable housing, community action, human services and workforce development sectors in the six New England states responded to 24 multiple-choice and fill-in questions. The Fed asked respondents to comment on the changes in conditions over the previous six months of the polling period and to project changes over the next six months. The Fed cautioned that data collected represent the opinions of service providers who completed the survey.

In April, survey participants were asked three new questions: What proportion of their service communities are suburban, what are the top challenges facing lower-income suburban communities, and an open-ended question soliciting input about other challenges these communities face. The responses serve as the primary sources of information for the report, the Fed states.

Very few service-provider respondents indicated that they had many low-income clients in suburban areas that were designated as other than low to moderate income. But moderate income families are feeling the squeeze.

A Greater Urban Reach

There are other cultural gaps with the potential for long-term downstream adverse effects.

Kaili Mauricio, senior policy analyst for the Federal Reserve Bank of Boston, one of the report’s authors, said that challenges faced by lower income people in rich suburbs included lack of access to services, lack of political representation and perceptions of racism. The concern over lack of political representation came as a surprise; 57 percent of respondents ranked this concern as at least slightly important.

Urban services, by contrast, are less expensive because they can serve a larger constituency within a smaller geographic area. “You don’t even realize those [urban] discounts exist,” Mauricio said. Urban commuters are nine times more likely to take public transportation than suburban jobholders. “Their income doesn’t change if they move, and a cost goes up,” he said. “They have to make some sort of sacrifice [to compensate].”

Study authors didn’t use the federal poverty level unless no other measures were available. “The federal poverty level is so low, it doesn’t reflect everyone that’s struggling,” Mauricio said. Instead, they used moderate family income, which in Connecticut is $40,000 to $50,000. Median income in the state is $87,000, skewed by the state’s many high-income census tracts, 36 percent of which have average incomes of $100,000.

“Many think that [a $40,000 to $50,000 income] is good, but when we break down [living] costs, it actually strikes you about what it costs to live in the suburbs,” Mauricio said.

It’s not only Connecticut. Similar situations occur in higher-income districts in Massachusetts. So, the caution is that it’s not so much what one makes, but how much one gets to keep (see chart).

The report doesn’t propose a solution, Mauricio said; it’s meant to be a conversation-starter about inequalities that will likely have downstream effects on the economic power of all the census tracts affected.

Email: coneill@thewarrengroup.com