Prosperity Watch Issue 56, No. 3: North Carolina's Poverty is Still 20 Percent Higher than Pre-Recession Levels

December 15, 2015

From the mountains to the coast, poverty retains a fierce grip on nearly 1.7 million North Carolinians. Living below the federal poverty level of $23,850 annually for a family of four creates persistent hardship, as evidenced by newly-released data from the Census Bureau’s Small Area Income and Poverty Estimates (SAIPE) program. This data reveals poverty and income trends in all 100 counties—a level of specificity not possible in the data released by the Census Bureau in September.

There is a small glimmer of hope in the new data. For the first time since the great recession hit in 2007, the state poverty rate fell slightly in 2014, down to 17.2 percent from 17.8 percent in 2013. Yet even with this small improvement, the poverty rate remains more than 20 percent higher than when the economic downturn began. These persistently high levels of poverty are a reflection of the weak recovery that is plagued by too few jobs as well as a boom in low-wage work that cannot sustain the needs of a family.

The depth of economic hardship varies strikingly by locale in North Carolina. In 2014, the poverty rates ranged from 9.7 percent in Camden County to 33.1 percent in Robeson County (see map below). Differences in job availability; public and private investments in schools, businesses, and transportation; and historic patterns of hardship make some regions more susceptible to poverty than others.

The geography of poverty at the county level reveals the bleak economic reality rural residents face. In 2014, rural counties accounted for the top 41 highest countywide poverty rates—in 2012 it was just 31 rural counties. The jump reflects how rural communities continue to face job loss and deal with long-term structural changes in the state’s economy while the majority of the economic growth is concentrated in their urban counterparts.

However, poverty is not limited to rural North Carolina. Among urban counties, the highest poverty rate was once again in Forsyth County, where nearly 1 in 5 residents lived in poverty. At the opposite end of the spectrum for yet another year, Wake County had the lowest poverty rate (11.5 percent) among urban counties. While urban areas are more likely to have lower poverty rates in the state compared to rural counties, they are also contending with the largest concentrations of poverty at the neighborhood level.

If lawmakers do not act to reduce poverty and boost opportunity, North Carolinians will face elevated poverty for years to come. Poverty across the United States is not expected to fall to pre-recession levels by 2024, according to the Brookings Institution (state-level projections are not available). But for the first time in a generation, the national economic recovery has been stronger than North Carolina’s in terms of employment growth, suggesting it may take North Carolina until after 2024 to get back to pre-recession levels of poverty unless policy changes are made to redirect the state’s course.

The data illustrate that North Carolina lawmakers need to retool the state’s economic model to create quality jobs, stem the boom in low-wage work, target aid to low-wealth counties, and rebuild entryways to expand the ranks of the middle class.

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