BTC REPORT: North Carolina's Greatest Challenge—Elevated Poverty Hampers Economic Opportunity for All

By Tazra Mitchell & Alexandra Forter Sirota
Budget & Tax Center
October 2016

North Carolina’s economy isn’t working for everyone, and for some it’s downright broken. Many families wake up to financial insecurity every morning as the shortage of jobs paying family-supporting wages persists, household income remains below pre-recession levels, and the gap between the wealthy and everyone else widens. The ability of families and individuals to get ahead as well as the resilience and growth of North Carolina’s economy are hindered as a result.

From the mountains to the coast, poverty-level incomes are a harsh reality for more than 1.6 million North Carolinians, who find affording the basics such as rent, food, and utilities to be a daily challenge. In 2015, poverty in North Carolina—which for a family of four means living on $24,250 or less per year—was still 15 percent higher than when the Great Recession hit in 2007. The depth of economic hardship in the state is closely tied to race, gender, and age, as well as where one lives. This pattern of economic exclusion is nothing new in the Old North State and keeps us from achieving a better future.

Key Findings

►► Poverty in North Carolina is still 15 percent higher than pre-recession levels. The state’s poverty rate was 16.4 percent in 2015, a drop from 17.2 percent in 2014.

►► North Carolina has higher rates of poverty, deep poverty, and child poverty than the majority of states. The state’s poverty rate, child poverty rate, and deep poverty rate were each the 12th highest in the nation in 2015.

►► 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.

►► Poverty’s reach varies considerably across the state, revealing a stark rural-urban divide. Out of the state’s 100 counties in 2014, the 20 highest county-level poverty rates were all in rural counties.

►► 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 in the number of people who are poor and living in high-poverty areas.

►► North Carolina’s off-kilter economy and policymakers’ decisions are keeping poverty high. North Carolinians are not seeing broad-based wage growth, middle-class living standards are out of reach for many, and top earners are reaping the majority of the economic gains. Unfortunately, North Carolina’s leaders are enacting policies that compound these economic and labor-market disparities and make it more difficult for working families to get ahead.

►► Work and income supports reduce the number of North Carolinians living in poverty by half and boost economic mobility. These supports lifted more than 1.6 million North Carolinians—including 341,000 children—out of poverty each year, on average, from 2011 to 2015. They also enabled workers and families to succeed, contributing to a stronger and more inclusive economy.

The good news is that North Carolina has the tools to address these problems, and we know what works. Making sure that parents can put food on the table; have access to supports like affordable, quality child care to help them work and their children learn; and earn wages they can live on are part of building an economy that works for all.

Building a recovery from the Great Recession that can deliver broad-based wage growth and widespread prosperity should be a priority for lawmakers. At the very least they should refrain from chipping away at work and income supports. Unfortunately, in the past few years both state and federal lawmakers have cut back on these supports, making it harder for people who live paycheck to paycheck.

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PDF icon POVERTY REPORT 2016--final.pdf4.45 MB
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