Poverty and Policy Matters

Poverty Rate Edges Up During the Official Recovery of the Great Recession

The 2010 poverty data that was released by the Census Bureau yesterday demonstrate that the significant increases in poverty felt during the Great Recession were only the tip of the iceberg. The North Carolina Budget and Tax Center (BTC) released a brief today showing that the poor are getting poorer and the middle class is eroding.

The poverty rate in North Carolina was 17.5% in 2010, up 22% since 2007 and 2.2 percentage points higher than the U.S. poverty rate in 2010. 1.6 million North Carolinians have incomes below the poverty line, which corresponds to an income of $22,314 for a family of four. The share of North Carolinians living in deep poverty—an income of $11,157 for a family of four—rose 1.8 percentage points from 2007 to 2010. Last month, the BTC estimated that a family of four actually needs an annual income of $48,814 to make ends meet in the state.

The new BTC brief shows that the persistently weak economy took a toll on people under 18, where childhood poverty increased by 5.4 percentage points from 2007 to 2009. Urban poverty ranked higher than rural poverty in the state, and people of color were more likely to experience poverty in 2010.

At the same time, household incomes dropped in the state. Prolonged deterioration in poverty and income is no surprise. The July 2011 unemployment rate in North Carolina was 10.4 percent, 1.3 percentage points higher than the national average. As job seekers remain unemployed, family incomes and opportunities decline and poverty rises.

State policies and budget cuts have reduced an effective response to growing economic hardship. The underperforming economy and the expanding jobs deficit signal the need for policymakers to make a genuine commitment to job creation and safety-net measures. These efforts could provide a pathway out of poverty into the middle class, create an opportunity for greater participation in the economy, and bolster future economic security.

Written by Tazra Mitchell, Public Policy Fellow

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