It’s been six weeks since the U.S. Census Bureau released the latest poverty and income data and during that that time, analysts and experts around the country have been examining the numbers and drawing conclusions. Here are five key takeaways that have come into sharp focus here in North Carolina.
1. Our progress toward eliminating poverty remains stalled. North Carolina’s high poverty rate (17.9 percent) remained statistically unchanged in 2013. This means that there has been no recent progress towards alleviating poverty (as measured by the official poverty measure) since before the recession hit. One in five North Carolinians lived in poverty – which equates to an income of less than $24,000 in income per year for a family of four. North Carolina has the 11th highest poverty rate in the nation. High rates of hardship persist because of the state’s ongoing job shortage and the rapid acceleration of low-wage work that fails to provide a pathway to the middle class.
2. Children are the state’s poorest age group—and children of color, especially those under age five, face shamefully high rates of poverty. One in four Tar Heel children lived in poverty in 2013. Poverty maintains the fiercest grip on children of color, with rates approaching, and in some cases, exceeding 50 percent for certain communities of color under age five. Especially as North Carolina shifts to being a state in which a majority of residents are people of color, persistently high poverty rates among children of color are certain to do great damage to the state’s economy in the long run.
3. Where you live shapes your access to economic opportunities. A large and growing body of research shows that where one lives can determine if one has access to the educational and employment networks that can pave a pathway to the middle class. Of the 40 counties in North Carolina for which 2013 data is available, the average poverty rate in rural counties is 2.3 percentage points higher than the average for urban counties. With that said, the pockets of deepest hardship exist primarily in inner-city urban areas in the state. So even within a county that is thriving overall, economic hardship can—and often does—vary greatly from neighborhood to neighborhood.
4. Income inequality remains at historically high levels, causing economic gains to bypass the average North Carolinian. The median annual income in North Carolina adjusted for inflation did not rise between 2012 and 2013 and is lower now than in 2009 when the official economic recovery began. Yet other sources show that incomes at the top have grown and the gaps between the top and bottom and top and middle have widened. By 2013, the top 20 percent of households in North Carolina captured more than half of the income earned by all households in the state.
5. Work and income supports help reduce poverty. The poverty rate would have been much worse in the absence of public policies that provide necessary support. Work and income supports blunted the extent of poverty’s reach across the United States. Using an alternative poverty measure, the Supplemental Nutrition Assistance Program, Unemployment Benefits, and Social Security helped keep poverty in check by lifting millions of Americans above the federal poverty line. Chipping away at the safety net before the economy fully recovers—as state and federal lawmakers have done—only makes the day-to-day lives of North Carolinians experiencing financial hardship more difficult.
The bottom line: Now is no time to scale back our investments in effective anti-poverty strategies. To the contrary, North Carolina should redouble its efforts to help struggling people afford basics like decent housing, nutritious food, reliable child care, and transportation. To make our state a better place to live and better able compete in today’s global economy, policymakers need to invest in people and communities. Making it just a little easier for people to increase their earnings not only helps families struggling to pay the bills but also makes our economy stronger for all of us.
Tazra Mitchell is a Policy Analyst at the North Carolina Budget and Tax Center.