BTC REPORTS: North Carolina's Greatest Challenge - Widespread Struggles Remain a Grave Threat to Economic Growth and Us All

By Tazra Mitchell
Policy Analyst, Budget & Tax Center
April 2015

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 idles in neutral, 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 1.7 million North Carolinians who find affording the basics such as rent, food, and utilities to be a daily challenge. In 2013, poverty in North Carolina—which for a family of four means living on less than $24,000 per year—was the most widespread it had been since before the turn of the century. 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 either climbed or stayed steady from 2007 to 2013 despite the economic recovery. The state’s poverty rate was 17.9 percent in 2013.
  • North Carolina has higher rates of poverty, deep poverty, and child poverty than the majority of states. The state’s poverty rate was the 11th highest in the nation in 2013, and its deep poverty rate and child poverty rate were 12th highest.
  • 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 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.
  • North Carolina’s off-kilter economy and policymakers’ decisions are keeping poverty high. Wages are idling in neutral, middle-class living standards are increasingly out of reach, and economic gains are bypassing everyone except those at the top. 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 1.5 million North Carolinians—including 340,000 children—out of poverty each year, on average, from 2009 to 2013. 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 broadly shared 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 last 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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