Anti-Poverty Programs Help Alleviate Costs, But More Must Be Done to Reduce Burdens

RALEIGH (October 26, 2016) — Despite recent U.S. Census Bureau data showing reductions in the poverty rate and increases in household median income, 1.6 million North Carolina residents still face double jeopardy in today’s economy. Not only do they live below the poverty line, they also face high costs in areas such as rent, food, child care, and predatory lending.

This is the central finding of The High Cost of Being Poor in North Carolina, a new report released today by the North Carolina Justice Center and the Coalition on Human Needs. Among the report’s highlights:

  • 56 percent of North Carolina’s households with annual incomes below $20,000 spend more than half of their income on rent alone.
  • Child care accounts for another exorbitant expense. The average cost in North Carolina for an infant in a child care center is more than $9,200 a year; for an infant and a four-year-old, it’s nearly $16,900. A family at the poverty line with an infant and toddler in child care would have to spend 69 percent of its income on child care, if paying the state average cost. Without a subsidy, low-income families have no choice but to make cheaper and often less reliable arrangements.
  • Anti-poverty programs help many. Programs such as low-income refundable tax credits, SNAP, free or reduced-price school lunch and child care subsidies have helped lift tens of millions of Americans out of poverty, including more than 750,000 North Carolina residents.
  • However, many anti-poverty programs don’t reach many who are eligible and other programs would do more good if their benefits were higher or if more people were eligible.

“Low-income refundable tax credits lifted 370,000 North Carolinians out of poverty each year, on average, from 2011 to 2013, and another 340,000 were lifted out of poverty each year from 2009 to 2011 due to SNAP,” said Alexandra Sirota, Director of the Budget & Tax Center, a project of the NC Justice Center. “In addition, 82,000 North Carolinians no longer live below the poverty line because of housing subsidies. Anti-poverty programs are sound investments in North Carolina and particularly for North Carolina’s children. We must do all we can to close the opportunity gap for our state’s youngest citizens. Like any sound investment, the more we put in, the more we get out.”

“It is good news that the poverty rate is down, median household income is up, and more Americans are finally benefitting from an improved economy, coupled with federal programs that increase income or reduce expenses,” said Deborah Weinstein, Executive Director of the Coalition on Human Needs. “But the more troubling news is that the poor and near-poor live in a precarious situation. The simple fact is: it is expensive to be poor in North Carolina.”

The High Cost of Being Poor in North Carolina found many ways in which it is expensive to be poor: Rents consuming huge proportions of income; higher food prices because of lack of access to markets; late fees for unpaid rent and evictions; poor housing conditions leading to health issues, which in turn lead to missed days of school or work; lack of paid sick days, paid leave, and unpredictable work schedules; and predatory lending practices such as pay day lending.

The report includes recommendations for further reducing poverty for the 1.6 million adults and children who live at or below the poverty line in North Carolina. These recommendations include increasing federal funding for housing and child care subsidies; expanding the Earned Income Tax Credit and Child Tax Credit; increasing SNAP benefits and improving Child Nutrition programs while reauthorizing them; expanding health care coverage to low-income Americans by drawing down federal Medicaid dollars; a strong rule finalized from the Consumer Financial Protection Bureau to stop predatory lending; and raising the minimum wage and helping workers get more paid hours through paid sick leave and more predictable hours.

The High Cost of Being Poor in North Carolina is available at http://www.ncjustice.org/?q=report-high-cost-being-poor-north-carolina

FOR MORE INFORMATION, CONTACT: Alexandra F. Sirota, Alexandra@ncjustice.org, 919-861-1468; Brian Kennedy II, briank@ncjustice.org, 919-856-2153; David Elliot, delliot@chn.org, 202-223-2532 (office) 202-607-7036 (cell).

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The Coalition on Human Needs (CHN) is an alliance of national organizations working together to promote public policies which address the needs of low-income and other vulnerable populations. The Coalition’s members include service providers and faith groups, civil rights, religious, labor and professional organizations and those concerned with the well-being of children, women, the elderly and people with disabilities. For more information please visit www.chn.org.

The North Carolina Justice Center is one of the state’s leading research and advocacy organizations dedicated to transforming North Carolina’s prosperity into opportunity for all. Our mission is to eliminate poverty in North Carolina by ensuring that every household in the state has access to the resources, services and fair treatment it needs in order to enjoy economic security. For more information visit www.ncjustice.org.