Prosperity Watch (Issue 79, No. 1)
Oct. 6, 2017
With the release of the US Census Bureau data in September, new data is available to assess the strength and reach of the national economic recovery in our state. This latest data point along a seven-year trend of expansion shows that poverty is falling and median household income is on the rise.
In fact, in the past year, the largest two-year income gain in five decades was recorded in the nation. As researchers at the Center on Budget & Policy Priorities point out, this progress on median household income overall in the past two-year period was widespread across the country and largely due to the movement of workers into full-time employment.
So let’s be clear: North Carolina’s improvement in median household income over the past year is important but not a story of North Carolina exceptionalism. Instead, looking deeper at the data shows that there are very real reasons for concern that the state’s economic recovery is failing to deliver for the majority of North Carolinians.
North Carolina’s median household income reached $50,584 in 2016, which is $7,000 less than the national average and in the middle of the pack of our Southeastern neighbors.
When adjusted for inflation, North Carolina’s median household income showed similar gains to the nation in the past two-year period.
But such growth has been insufficient to bring that income level back to where it was before the Great Recession began. In 2016, the median household in North Carolina had $1,130 less than the similarly situated household had in 2007. That means that the average household brings home fewer dollars in the face of rising costs of housing, child care and education.
North Carolina’s median household income also hasn’t grown in comparison to our Southeastern neighbors. Over the same period, North Carolina’s median household income actually declined, while all of our neighbors saw significant increases.
Monitoring the progress in median household income is important, but critical to that effort is using the right benchmarks of progress. North Carolina must significantly outpace the national average to close the gap that North Carolina households have relative to the nation, and for families to feel economically secure, the state must see income growth for the average household that far outpaces the growing cost of goods and services.