Making Ends Meet After the Great Recession: The 2010 Living Income Standard for North Carolina

By Alexandra Forter Sirota & Edwin McLenaghan
NC Budget & Tax Center
August 2011

Executive Summary:

Work provides not only the ability to meet the most basic human needs but also access to new opportunities and a sense of dignity and purpose, all of which have driven America’s economic growth for generations. For many in North Carolina, however, work falls far short of its promise. Restoring not only the promise of work but also the opportunity for well-paying jobs with benefits is the central challenge confronting North Carolina as the state maps its course out of the Great Recession.

Yet, without a meaningful measure of the economic pressures facing low-wage families, it is difficult to determine the scope of the challenge and guide a response. The North Carolina Budget and Tax Center created the Living Income Standard (LIS), a market-based approach to estimating how much income a working family with children must earn in order to pay for basic expenses. The LIS provides a conservative estimate of how much it truly costs to make ends meet in the state.

This 2010 version of the Living Income Standard finds that the North Carolina family of two adults and two children must earn $48,814 annually—an amount equal to 221 percent of the federal poverty level—to afford the actual costs of seven essential expenses: housing, food, childcare, health care, transportation, taxes and other necessities (like clothing, personal care items, household supplies, school supplies and local telephone service). To meet that level, the adults in the average four-person family would need to earn a combined $23.47 per hour and work 40 hours a week, 52 weeks a year.
 

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