Highlights from the Latest Issue of the Tenth District Low- and Moderate-Income (LMI) Economic Conditions

September 27, 2016
By Daniel Perez


Disparities in employment among minorities and the stock of affordable housing are two of many topics discussed in the upcoming issue of the Tenth District Low- and Moderate-Income (LMI) Economic Conditions. Through an analysis of external data and data collected from a survey of organizations that provide services in the LMI community (the LMI Survey), the biannual report provides an extensive, comprehensive look at LMI economic conditions around the Federal Reserve’s Tenth District. The report seeks to provide information for organizations that work with LMI communities.

Results from the LMI Survey suggest improvement in LMI economic conditions may have plateaued, at least temporarily. Many survey indicators remain weak, and the index reflecting survey respondents’ general assessments of LMI economic conditions has declined sharply over the last year. However, other indicators, largely outside the survey, have held steady or shown modest improvement. Although conditions in the LMI economy may seem tenuous, economic performance in LMI communities, as measured by the LMI Survey, often have been remarkably resilient.

Data about the labor market for LMI workers remain mixed. Unemployment continues to decline; but long-term unemployment, while down significantly from its peak, remains persistently high. New in this issue is an analysis of labor force participation rates (LFPR), which shows discouraged workers (ones who have given up a job search) contributed significantly to recent declines in the LFPR relative to other periods. Additional data cited in the report suggest high underemployment in LMI communities. While underemployment is lower in the District compared to the rest of the country, the unchanged number of reluctant part-time workers suggests there are lingering labor market issues to address. 

Factors that explain employment gaps between racial and ethnic groups is one special topic examined in the report. Despite strides in civil rights and anti-discriminatory practices, these gaps persist. While a lack of education and work skills, particularly “soft skills” like basic job readiness, partially explains the gap, the report seeks to address other lesser-known aspects. LMI survey respondents noted inadequate transportation, child care needs and a lack of mentorship as reasons for persistence. Moreover, respondents discussed federal and employer related barriers that prevent employment, such as citizenship and employers’ examination of credit reports.

Word Cloud of Responses to Question on Affordable Housing

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(Source: Federal Reserve Bank of Kansas City LMI Survey)

The report also analyzes funding for and the stock of affordable housing, considered by many community organizations to be the most significant issue in the LMI community. Communities have seen a large decline in construction and funding of projects to provide affordable housing. When asked about housing stock, contacts stated the lack of sufficient affordable housing mostly was a result of insufficient funding. Indeed, state and federal funding has declined considerably in recent years, specifically funds distributed by the U.S. Department of Housing and Urban Development. Additional factors in the declining stock of affordable housing include zoning laws and increased qualification standards for funders.

This report discusses many other economic issues that affect the LMI community, including a more complete analysis of the labor market, trends in the demand for social and community services and access to credit. The full report will be available in the Tenth District LMI Economic Conditions section soon.