Prosperity Watch Issue 44, No. 2: Counties in North Carolina with dual burden of high poverty, high inequality grows

Since 2000, North Carolina has experienced measurable growth in inequality, a decline in the earnings of the median worker and persistently high poverty. While inequality has continued to climb, it is notable that earnings and poverty have been slow to improve even as the economy has recovered.  New analysis by the Population Reference Bureau demonstrates an important spatial component to these measures of economic well-being and the need to focus on areas where multiple challenges are creating barriers to opportunity for all residents.

The analysis looked nationally at counties over time to show how poverty and inequality have grown in tandem and where high poverty and high inequality exist today.  In these highly unequal and high poverty communities, there is both real hardship for a significant share of the population (high poverty in this analysis is defined as 15.4 percent or more are living below roughly $23,400 for a family of four) and a great distance between those at the bottom of the income distribution and those at the top.  In this analysis, inequality is measured by the Gini Index where 0 reflects a scenario in which household income was completely equal and 1 would be if just one household had all the income (high inequality in this analysis is defined as 0.43 or greater).    

In 2008-12, nationwide, 37 percent of counties had high levels of inequality combined with high poverty rates. Fifty-nine percent of southern counties experienced both high inequality and high poverty in that period. For North Carolina, the rate was slightly higher at 61 percent.   This is nearly twice the rate for North Carolina counties in 1999 when 32 percent had high levels of inequality and poverty.  Over the same period the significant decline in the number of low inequality/low poverty counties is also notable.

 

The explosive growth in North Carolina of the number of counties experiencing both high inequality and high poverty can be explained in part by the economic transformation of the state’s economy—away from manufacturing and towards services—that has meant fewer middle-wage jobs in communities.  It is also a result of public policy choices that have underinvested in a community infrastructure to support all residents in all communities of the state through education and more robust job creation.  Where job creation has occurred there are also too few policy tools being deployed to ensure new jobs can be accessed by existing residents so that the benefits of job growth can be shared broadly.

The dual challenge of high inequality and high poverty for the majority of counties in North Carolina calls for a state policy response to ensure access to economic opportunity and that the benefits economic growth are shared.
 

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