Poverty and Policy Matters

Poverty Rate Climbs, Failure to Act Not an Option

New data from the U.S. Census Bureau released today shows that a middle-class life is increasingly out of reach for many North Carolinians. North Carolina’s poverty rate bumped up to 17.5 percent in 2010, a 22 percent increase since 2007 when the Great Recession started. The 368,614 North Carolinians newly pushed into poverty over this period are roughly equivalent to the population in all 24 of the state’s smallest counties.

This latest growth in poverty follows a three-decade long trend of a failure of productivity gains to translate into compensation gains for workers. Not surprisingly, wages, wage inequality and the broader economy affect people’s experiences of economic hardship.

The Great Recession has only served to deepen and spread the experience of hardship because of the interrelated phenomena of the lack of jobs and the collapse in revenue to support public investment. In North Carolina alone, the jobs deficit has reached nearly half a million jobs, meaning that many families are without the employment necessary to get by and stay out of poverty. Without work, these families have cut back on spending, which in combination with tight credit markets has impacted businesses. Revenue has suffered as a result, and state policymakers have chosen to cut public investments at a critical time in the economic recovery.

State and federal government play an essential role in increasing jobs and decreasing poverty. For example, national numbers released last week from a different Census survey demonstrates that millions of Americans were kept out of poverty through unemployment insurance and Social Security from 2009 to 2010.  The American Recovery and Reinvestment Act of 2009 (ARRA), which went into full effect in 2010, also held down poverty by creating or saving 3.4 million jobs in 2010 according to Congressional Budget Office estimates. If not for these public policies, today’s poverty numbers could have been far worse.

And yet the numbers released today are bad, made worse by North Carolina policymaker’s failure to act on the poverty front. A genuine focus on job creation by policymakers, along with a commitment to ensuring that new jobs provide family-sustaining wages and benefits and go to those most in need, would be the first step. In addition, expanding access to programs that help struggling families purchase food and provide quality child care so parents can work or learn new skills for emerging industries can support the creation of a more inclusive economy.

Public policymakers must be held accountable to the rising poverty in their midst because we will all feel its consequences. Leaders from an earlier time recognized this interconnectedness of our economic fates and put into place public policies, like the Social Security Act and GI Bill, that built the middle class in this country and ushered in a period of great prosperity. Today’s policymakers can do the same.

2 Comments

  1. Jimmy

    September 22, 2011 at 1:27 pm

    I am growing increasingly alarmed that our whole economy is going to collapse -what we have now will be nothing compared to what’s coming !

  2. taxed enough

    September 22, 2011 at 5:31 pm

    Since the mid 1960′s LBJ’s War On Poverty has transferred over $16 TRILLION dollars from people who earned it to people who did not earn it. Food Stamps, subsidized housing, Medicaid… a total of 70 giveaway programs. Now we have even more poverty. Looks like we got what we paid for.