MEDIA RELEASE: Economic mobility harder for North Carolinians than average Americans

New report shows state lags behind U.S., Southeastern region in upward economic mobility

RALEIGH (June 5, 2012) – Economic mobility is harder for North Carolinians compared to the surrounding Southeastern region and the U.S. at large, a new report finds.

North Carolinians are struggling with widespread income inequality, which correlates with lower economic mobility, finds a new report from the Budget & Tax Center, a project of the NC Justice Center. Geography, the report said, as well as factors such as socioeconomic background, education, race, and asset accumulation all directly affect one's economic mobility and pose challenges to the theme of the American Dream.

“The American Dream is built on the belief that one can get ahead with hard work, regardless of one’s starting point in life,” said Tazra Mitchell, a fellow with the Budget & Tax Center and author of the report. “Yet the ‘rags to riches’ experience and general upward economic mobility is increasingly hard to come by, particularly here in North Carolina.”

According to the report, 4 in 10 Americans at the bottom fifth of the income ladder are not moving upwards relative to their peers. The situation is particularly bad in North Carolina, which ranks lower than Americans and Southeasterners on average in absolute mobility or earnings increases over a 10-year period. Only 26 percent of North Carolinians were upwardly mobile relative to their peers, compared to 34 percent of Americans, the report said.

One's fortune is strongly linked to parental economic standing, the report said, as well as one's ability to live in safe neighborhoods, attend quality K-12 schools, and access higher education. Economic mobility is also more restricted for people of color, with research showing that 63 percent of African Americans who start out in the bottom quarter of the income distribution are likely to stay there as adults – nearly double the rate for white individuals. In North Carolina, the average gap in median household income between these two races was $18,431 in 2010.

“It is critical for policymakers to rebuild economic opportunity and shared prosperity for all of the state’s residents by making adequate public investments in education and family well-being,” Mitchell said. “Policies that enable and promote opportunities—such as job training programs, tax credits for low-income families, and poverty alleviation—are needed to offset the state’s limited mobility and high income inequality.”

FOR MORE INFORMATION CONTACT: Tazra Mitchell, Budget & Tax Center Fellow, tazra@ncjustice.org, 919.861.1451; Jeff Shaw, Director of Communications, NC Justice Center, jeff@ncjustice.org, 503.551.3615 (cell).