Discover the Poorest Town in Kentucky

The poorest town in Kentucky is part of the United States, one of the wealthiest countries in the world. With a Gross Domestic Product (GDP) of more than $23 trillion, the United States makes up almost a quarter of the global economy. Despite its economic strength, however, certain areas of the country, like the state of Kentucky, still struggle with income inequality and poverty.

More than 41 million people in the United States are living in poverty, according to the latest figures available from the U.S. Census Bureau report Poverty in the United States: 2022. The bureau released its latest five-year American Community Survey, which collects social, economic, and housing characteristics from millions of households every year.  

The U.S. Census Bureau defines poverty as a single-family household of two adults and one child living on an annual income of $23,556 or less. In contrast, there are 5.3 million millionaires and 735 billionaires in the country, with a quarter of the richest people concentrated in California.

The wealthiest people living in the United States tend to live in the wealthiest states. California, for example, is the richest state in the country. This pattern reveals that wealth is geographically concentrated. In fact, many U.S. states have a significantly higher GDP than many countries in the rest of the world. Not all states, though, are equally wealthy.

Where Does Kentucky Rank?

Known as the Bluegrass State, Kentucky is landlocked between seven states in both the Midwest and Upland South. Along with its unique bluegrass fields, its geography includes the Appalachian Mountains, the Ohio and Mississippi Rivers, and large coal fields.

Historically, Kentucky’s economy was tied to coal. The modern decline in the coal industry, however, has left many of the state’s communities struggling. Kentucky’s GDP was $244 billion in 2022. In contrast, California reaped the benefits of a GDP of $3.5 trillion. World Population Review ranks Kentucky as the sixth poorest state with a poverty rate more than 30 percent higher than the U.S. average.

In the United States, 11.5 percent of 334 million people live in poverty. Kentucky has a poverty rate of 16.5 percent of its population of 4.5 million people. State-level data from the most recent American Community Survey shows that about one in six people in the Bluegrass State live in poverty.

The survey also determined that Kentucky has the seventh highest child poverty rate among U.S. states. Out of Kentucky’s 4.5 million residents, nearly a million are children. The median household income is $55,454 and the per capita income is $30,634. In California, by contrast, the median household income is $84,097.

The Poorest Town in Kentucky

Poverty in Clay City

Although the typical household in Kentucky earns more than $55,000 a year, there are many areas in the state where incomes are far lower. Of the 218 towns in Kentucky included in the survey, Clay City ranks as the poorest. The median household income in Clay City is just $19,643 a year, about 64 percent less than the statewide median income. The average household income is a bit more at $36,833.

Given such low incomes, it is not surprising that Clay City residents are suffering from a higher rate of poverty than seen in the larger state data. The local poverty rate in the town is 47.7 percent. This is more than 60 percent greater than the poverty level of 16.5 percent across the entire state of Kentucky.

In Clay City, 33.7 percent of high school graduates and 61.4 percent of those who didn’t graduate from high school live in poverty. The town’s poorest residents have a renting rate of 56.6 percent as opposed to 27.9 percent of those living above the poverty level in Clay City.

Families and Children in Clay City

Of the poor families in Clay City, 72.4 percent were made up of single mothers and their children. The breakdown of poor residents in the town not in families shows that 85.5 percent of them did not work in 2021. The data put poor married-couple families where both adults worked full-time at zero percent. The most likely scenario for those families is where one adult worked full-time and the spouse did not work at all.

The percentage of children living below the poverty level in the state of Kentucky — 21.6 percent — is already higher than the national average of 12.4 percent. Clay City’s child poverty rate, however, stands out as shockingly higher. With the high rates of unemployment and low incomes in Clay City, it is no surprise that 66.5 percent of children in the town are living in poverty.

Clay City Demographics

The poorest town in Kentucky has a 2023 population of 1,206. It is currently growing at a rate of 0.17 percent annually. According to the most recent American Community Survey, the town is made up of 91.7 percent white and 8.3 percent of people two or more races.

Clay City Geography

Clay City is located in Powell County, KY. According to the U.S. Census Bureau, the small town is only 1.1 square miles. Located in a low-lying area in the Red River Valley, local storms flood the city quite frequently.

Powell County has a humid subtropical climate characterized by hot and humid summers and mild winters. Due to its proximity to several large bodies of water, most notably the Ohio River, humidity stays high throughout the year.

Summer temperatures average 75 degrees Fahrenheit, while winters drop to between 40-45 degrees Fahrenheit. The area gets around 49 inches of rain a year on average, and about 11 inches of snow. A typical year in Powell County sees 174 sunny days. The U.S. averages 205 sunny days a year.

The annual BestPlaces Comfort Index for Powell County is 8.4 out of 10. This means it has one of the most pleasant climates in the state.

The Richest Town in Kentucky

While Kentucky struggles with widespread poverty, there are also communities defined by their affluence. Of all the towns in Kentucky, Anchorage ranks as the wealthiest. The average household income of the town’s residents is $305,118. This is about $228,600 more than the state average and $268,285 more than Clay City’s average.

Another stark contrast between Anchorage and Clay City is the percentage of residents who have attained bachelor’s degrees. In Clay City, 1.3 percent of residents completed their bachelor’s degree. Residents in Anchorage with bachelor’s degrees make up 78.7 percent of its population.

The amount of Anchorage’s households headed by a married couple also dwarfs Clay City’s statistic. In Kentucky’s richest town, 74 percent of its families are made up of married couples. Married-couple families made up 23.5 percent of Clay City’s population.

Anchorage is a quiet, scenic community in Jefferson County, KY, about 15 miles east of downtown Louisville. It is home to 2,357 people, 850 residences, one school, several small businesses, and a handful of churches.

The town has a history of attracting some of the area’s wealthiest citizens. A few notable people choose to make Anchorage their home. Joan Osborne, a singer-songwriter, was born and raised in the affluent town. John Schnatter, the founder and former CEO of Papa John’s Pizza, owns 6 percent of the land in Anchorage. Along with making Anchorage his home, he has also restored many buildings in the city’s center.

What Is the Most Dangerous City in Kentucky?

The Bluegrass State is a wonderful place to live offering beautiful scenery and cultural activities unique to the state. When it comes to crime, Kentucky boasts a lower-than-average crime rate. It experiences half the crime of neighboring states and 1.5 fewer violent incidences than the nationwide average. Kentucky has a 2.2 per 1,000 residents violent crime rate. The United States has 3.6 per 1,000 residents.

While Kentucky’s crime statistics are promising, there are some areas of the state where violent crime eclipses the national average. Louisville is not just the home of the famous Kentucky Derby. Well-known for its distinct bourbon, the area also has the distinction of being Kentucky’s most dangerous big city.

The crime rates in Louisville Metro are more than six times the U.S. average. Violent crime occurs at the rate of about 22.23 per 1,000 residents. Louisville is the biggest city in Kentucky, with a population of 621,764 in 2023.

Despite the city’s problems with crime, it was still rated one of America’s Top 100 Best Places to Live in 2023 by Livability. The State of Kentucky is a popular tourist destination and a great place to live. One of America’s 735 billionaires even calls the Bluegrass State home!