New report: Economic recovery has made no dent in NC poverty

New report: Economic recovery has made no dent in NC poverty

- in Must Reads

poverty

Study finds state has higher rates of deep poverty and child poverty than majority of U.S.

Poverty in North Carolina either climbed or stayed steady from 2007 to 2013, despite the economic recovery, according to a new report from the Budget & Tax Center, a project of the NC Justice Center. Both North Carolina’s off-kilter economy and policymakers’ decisions to cut back on vital supports for working families are keeping poverty high, as wages remain stagnant, economic gains bypass nearly everyone except those at the top, and lawmakers continue to enact policies that compound these economic disparities.

In 2013, poverty in North Carolina – which is defined as a family of four living on less than $24,000 each year – was the most widespread it had been since before the turn of the century, the report said. The rate was 17.9 percent in 2013, the 11th highest in the nation, with the deep poverty rate and child poverty rate both the 12th highest.

“From the mountains to the coast, poverty-level incomes are a harsh reality for more than 1.7 million North Carolinians who find affording the basics such as rent, food, and utilities to be a daily challenge,” said Tazra Mitchell, a policy analyst with the BTC and author of the report. “Making it just a little easier for people to increase their earnings not only helps families struggling to pay the bills but also makes the economy stronger for all of us.”

Poverty has consequences for us all, and the depth of North Carolina’s economic hardship is closely tied to demographics as well as where one lives, the report said.

  • Race and gender play significant roles in poverty. Communities of color, women, and children are more likely to face economic hardships than whites, men, and older adults, respectively.
  • Racial disparities in income not only harm people of color but have consequences for all of us because inequities keep the economy from reaching its full potential. North Carolina’s Gross Domestic Product—a measure of all goods and services produced in the state—would have been $63.53 billion higher in 2012 if there had been no gaps in income by race and employment.
  • North Carolina’s child poverty rate was 25.2 percent in 2013, an increase of 6 percentage points since 2007. More than 4 in 10 children who grow up in poverty are likely to remain there as adults, with even less economic mobility for African American children.
  • Poverty’s reach varies considerably across the state, revealing a stark rural-urban divide. Out of the state’s 100 counties in 2013, the 45 highest county-level poverty rates were all in rural counties—up from 31 in 2012.
  • More North Carolinians live in high-poverty areas. Urban and suburban areas are contending with the growing concentration of poverty. In fact, the state’s metropolitan areas experienced some of the biggest jumps in the country for the number of people who are poor and living in high-poverty areas.

Work and income supports such the Earned Income Tax Credit, Supplemental Nutrition Assistance Program (SNAP), and temporary unemployment benefits helped lift 1.5 million North Carolinians – including 340,000 children – out of poverty each year, on average, from 2009 to 2013, under the Supplemental Poverty Measure. Unfortunately, in the last few years both state and federal lawmakers have cut back on these supports, making it harder for people who live paycheck to paycheck. In addition, tax cuts are costing upward of $1 billion this fiscal year and going forward, making it impossible to replace the most damaging cuts to anti-poverty programs and other vital services that lawmakers enacted in the aftermath of the recession.

“North Carolina needs policies that create equal opportunity, rebuild entryways to expand the ranks of the middle class, and ensure that prosperity is broadly shared so that all North Carolinians can reach their potential,” Mitchell said. “Until lawmakers fix the state’s and the nation’s broken economic model, large numbers of people from Murphy to Manteo will wake up to poverty, struggle to put food on the table, and be unable to afford the basics like rent and child care.”

Click here to read the entire report: “North Carolina’s Greatest Challenge: Widespread struggles remain a grave threat to economic growth and us all.”