Mayor Michael Bloomberg said job creation is key to help tamp down the city's swelling poverty numbers, and that the city has some of the strongest social safety net programs in the country.
"We are focusing as hard as we can on helping small businesses and entrepreneurs, which is the way we think we can grow out of this," Bloomberg said.
The rate rose from 18.7 percent to 20.1 percent between 2009 and 2010, according the latest figures from the U.S. Census Bureau released Thursday.
The mayor said the city lost 0.3 percent of private sector jobs during the recession, compared to about 6 percent nationwide.
The city's median household income also fell last year from the year before, by about 5 percent, to roughly $48,700 a year, according to the American Community Survey figures.
In New Jersey, the counties closest to Manhattan also saw increases in their poverty rates between 2009 and 2010, especially in Essex County, where the percentage of residents living below poverty level rose from 14.5 percent to 16.7 percent.
In Hudson County, the rate rose two percentage points, to 16.5 percent. Union County's was up 1.6 percentage points, to 11.1 percent, and in Bergen County, the poverty rate rose one-tenth of a percentage point, to 6.8 percent.