MEDIA RELEASE: Minority Families in NC Falling Behind

Latino Immigrants at Greatest Risk; Study Concludes North Carolina Can Address the Problem

RALEIGH (March 17, 2015) — A sharp racial/ethnic divide has emerged within the world of low-income working families, posing a critical challenge to North Carolina and the nation, a new study by the Working Poor Families Project concludes.

Unless lawmakers in North Carolina are willing to pursue policies that would improve conditions, African-Americans and Latinos will continue to emerge as a larger – but under-prepared and underpaid – segment of the workforce. Unless reversed, this disturbing trend will only worsen the potential for overall wage growth and job creation in the state’s economy at large, since African Americans and Latinos form a large and growing share of the state’s population.

Based on new analysis of the most recent data from the U.S. Census Bureau, the Project’s study sheds a fresh light on what’s happening inside the world of the working poor, where adults are working hard but find it difficult if not impossible to get ahead. And within this world at the bottom of America’s economic spectrum, a stark divide has emerged between white and Asian families compared to black and Latino families.

“In 2013, working families headed by racial/ethnic minorities were twice as likely to be poor or low-income compared with non-Hispanic whites, a gap that has increased since the onset of the Great Recession in 2007,” the authors write. “The significant differences among racial/ethnic groups present a critical challenge to ensuring economic growth and bringing opportunities to all workers, families and communities across the United States.”

In North Carolina, there are 371,000 low-income working families, meaning their total income fell below 200 percent of the official poverty rate. Of that total, 55 percent are minorities compared to only 26 percent who are white. Some 53 percent of all black working families fall into the low-income category, as do 70 percent of all Hispanic working families. And this comes at a time when other research has shown African American unemployment growing twice as fast as unemployment for whites.

“These disparities impact our economy and harm the fabric of our communities here in North Carolina,” said Allan Freyer, Director of Workers’ Rights Project at the North Carolina Justice Center. “They hurt the state’s overall wage growth and dramatically weaken support for local businesses who need rising incomes to support increased hiring.”

According to a report released by the Budget & Tax Center last year, if all racial and ethnic groups earned the same median wages as non-Latino whites, total annual income would have increased by 8 percent and Gross Domestic Product would have been $1.2 trillion higher.

Disparities cannot be erased overnight, but policymakers can start to reduce the gaps with a two-pronged approach that simultaneously increases access to education and training while enacting policies that “make work pay,” the researchers assert. State governments have demonstrated success with policy initiatives including:

• Raising the minimum wage.
• Increasing need-based financial aid for post-secondary education and expanding child care assistance and other supports for students with children.
• Supporting programs that link education to career opportunities and helping English language learners.
• Extending Medicaid benefits to all who are eligible.
• Encouraging employers to provide paid sick leave for all workers.

“Providing all low-income families with the tools they need to succeed is critical to the long-term health of North Carolina and our nation,” said Freyer. “North Carolina’s leaders must take action to ensure the American Dream is once again accessible to all.”

FOR MORE INFORMATION, CONTACT: Allan Freyer, director of the NC Justice Center’s Workers’ Rights Project, allan@ncjustice.org, 919.856.2151; Jeff Shaw, director of communications, jeff@ncjustice.org, 503.551.3615 (cell).