Prosperity Watch (Issue 64, No. 4): Deep poverty grows in NC and in the nation

Aug. 22, 2016

It has been 20 years since changes in 1996 to the system of welfare that provided income and other support through skills training and services for the country’s poorest households. The result of those changes—which reduced cash assistance, put in place strict time limits and failed to integrate the services to support work or address the lack of work—has been a well-documented increase in deep poverty nationally

Deep poverty is measured as half of the already low federal poverty threshold, or roughly $5885 for an individual and $12,125 for a married couple with two kids. To put that figure in context, North Carolina’s median household income was $46,596 in 2014, less than the $52,000 that  the Budget & Tax Center estimates it takes for a married couple with two kids to make ends meet. 

There were 712,244 North Carolinians living in deep poverty in 2014. Slightly more than 7 percent of the state’s population in that year lived on slightly more than $1,000 a month. Ten percent of children lived in deeply poor households in 2014, roughly the same share as when the economic recovery began in 2009. The number of children in deep poverty has grown by 75,000 since 2000—roughly equivalent to the population of Concord, N.C.

Deep poverty is associated with poor health outcomes and low levels of educational attainment and labor force participation. It also lessens the probability that a child will move out of poverty in their lifetime.  For these reasons, policies that lessen the harmful effects of deep poverty are critical, and the ones like welfare reform that have increased this harmful economic outcome should be rejected.

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