Prosperity Watch, Issue 10, No. 3: North Carolina faces enormous “wealth gap” between households of different races
While we often write about income, there is another indicator of economic security that is also important to monitor—wealth. Net worth, the sum of assets minus liabilities, provides a picture of wealth accumulation through, investments, housing equity and small business ownership. Wealth is important not only for the additional cushion it provides families facing the loss of a job or a medical emergency. It also can secure middle-class status for future generations through greater access to higher education, homeownership and a secure retirement. In North Carolina, the median net worth of households equaled $62,480 in 2009, well-below the national average of $70,600.
Recent research by the Pew Research Center found that the wealth ratios across white and communities of color nationally reached new levels of imbalance in 2009. The highest, in fact, since these statistics were made available a quarter of a century ago. The median wealth of white households nationally is 20 times that of black households and 18 times that of Latino households.
The racial wealth gap is also clear in another measure of wealth or lack thereof, asset poverty. Asset poverty is defined by CFED as the “percentage of households without sufficient net worth to subsist at the poverty level for three months in the absence of income.” Although the threshold used to determine the asset poverty rate varies by family size, a family of three with a net worth less than $4,632 in 2011 is considered to be “asset poor.” In North Carolina, fully 48% of households of color are living in asset poverty, while only 17% of white households are facing the same lack of assets.
The disparities in net worth and asset poverty by race are likely to be compounded as income and unemployment disparities widen, as they have in the Great Recession.
Prosperity Watch Issue 10, No. 2: Despite late recovery, North Carolina's employment growth lags nation's
Late last month, North Carolina’s workers heard the good news that the state’s unemployment rate had fallen for the third straight month, from 10.5% in September to 9.9% in December. While job creation gains were certainly unmistakable during the last quester of 2011, the state is still clearly lagging behind the national average in terms of employment growth, especially when compared to population changes in both the state and the nation.
As previous editions of Prosperity Watch have demonstrated, the unemployment rate does not capture the full picture of employment changes, since it fails to capture those workers who have become “discouraged,” defined as those who dropped out of the labor force because they were unable to find work. Comparing the number of employed people to the entire population provides a much clearer picture of the job market, as it includes these discouraged workers, as well as accounting for the number of jobs needed to keep up with natural growth in the population.
North Carolina’s percentage of employed people in the general population (the so-called employment-to-population ratio) largely tracked the national average for most of the decade, occasionally beating that average from 2004-2006. Following the onset of the Great Recession in December of 2007, however, North Carolina’s level of employment collapsed precipitously compared to the nation’s, a trend that accelerated over the course of 2009, 2010, and 2011. Currently, 58.5% of all Americans are currently employed, compared to only 55.6% of North Carolinians—a 3-percentage point difference that has largely remained unchanged over the last year, suggesting that the recovery of the state’s labor market is significantly lagging behind the nation as a whole.
Prosperity Watch Issue 10, No. 1: Despite Great Recession, Single Parents Had High Rates of Employment in 2010, but suffered more
North Carolina parents who were actively participating in the labor force and were raising children without the help of a spouse experienced high rates of employment in 2010, despite the Great Recession and the state’s half-million jobs deficit. Indeed, almost 83 percent of single mothers and 87 percent of single fathers were gainfully employed in 2010. Nonetheless, the economic downturn significantly reduced employment for these parents, according to the American Community Survey (ACS).
The employment rate for single mothers and single fathers dropped by 9 percent and 8.6 percent, respectively, from 2006 to 2010, compared to the 5.9 percent drop experienced by all families with kids (i.e. married and single parents) with at least one parent in the labor force. Although the employment rate for single parents exceeded 90 percent in 2006, single mothers faced an unemployment rate (over 9 percent) not experienced by the general population until the Great Recession hit.
As illustrated in the chart below, the employment rate for single mothers trailed the employment rate for single fathers during each of the five years between 2006 and 2010. The disparity between the employment rate for single mothers and single fathers was 4.2 percentage points in 2006 and in 2010; thus, single mothers made no gains during the five year period. The year in which the disparity in employment was the widest was in 2007 when the disparity peaked at 7 percentage points.
Similar to all families with kids with at least one parent in the labor force, single parents experienced a steady decline in employment since 2008, but single fathers experienced the highest year-to-year change in percentage points (-7) from 2008 to 2009. Notably, the employment rate for single fathers slightly exceeded the employment rate for the average family with kids in 2007.
Although there have been modest gains in the national and state unemployment rate recently, these ACS figures show that North Carolina’s vulnerable populations—single parents and children—are experiencing continued economic distress amidst the half-a-million jobs deficit long after the official end of the Great Recession.
Data reflects the employment rate as a percentage of the labor force. N.C. Budget and Tax Center analysis of the U.S. Census Bureau’s American Community Survey, 2006 to 2010.