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Great Recession impact biggest on families in poverty

Gerard Van der Leun

A new report by the Pew Economic Mobility Project shows that while all communities were impacted by the Great Recession, families in high-poverty neighborhoods took the hardest hit.

It's been over three years since the recession officially ended, but many Americans are just now seeing their household wealth return to pre-recession levels.

For Americans living in poverty affected by predatory lending practices and underwater mortgages the outlook is still grim.

Between 2007 and 2009 families in low-poverty neighborhoods experienced a 41 percent loss in household net worth. Families in high-poverty neighborhoods saw their household net worth decrease by an alarming 91 percent.

Those in high-poverty neighborhoods were also the most likely to be unemployed between 2007 and 2009, with only 53 percent of residents having employment both years.

Some otherkey findings include:

  • Families in low-poverty neighborhoods were more likely to be homeowners and experience home equity loss. 
  • Families in high-poverty neighborhoods are more likely to be behind on mortgage payments now.

The reports' authors suggests greater assistance be given to families in high-poverty neighborhoods who are now exposed to higher levels of economic insecurity.

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