Addressing Rising Poverty Rates in North Carolina

Since the latest data from the US Census Bureau was released, the North Carolina Budget and Tax center has  documented the growing number of North Carolinians facing economic hardship, the negative impacts of child poverty, the disproportionate impact of poverty in communities of color, and the challenges with the federal poverty line measure  that likely lead to an undercounting of the number of North Carolinians facing economic hardship.

Driving these trends is the combination of a weak economic recovery and longer-term changes in North Carolina’s labor market over the 2000s and earlier including the growth in the share of working families earning low-incomes To address rising poverty rates, state policymakers must focus on policies for both of these drivers.  Here are some ideas about what those strategies should be:

Immediately boost the effective incomes of families hardest hit by the economic downturn

• Maintain unemployment insurance payments that keep families out of poverty while boosting local economies
• Increase the state’s Earned Income Tax Credit that encourages and rewards work while reducing poverty
• Ensure North Carolina’s families can access work and family supports like food stamps and child care subsidies

Focus on the creation of good, quality jobs that feed the broader economy

• Maintain requirements for corporate subsidies to meet wage and benefit standards
• Subsidize wages for workers who are employed
• Implement a state-level work sharing program

Invest in long-term growth through a balanced approach to state fiscal challenges

• Modernize the state’s revenue system to ensure adequate investment in public structures
• Fund community college innovations that retrain and train workers
• Increase investment in affordable housing development through the NC Housing Trust Fund

State policymakers have the ability to keep rising poverty in check through their policy choices.  In the past, addressing the growth in poverty has provided an additional boost to the broader economy and expanded prosperity for all.   Investing in North Carolina’s struggling families and in job creation is more important than ever.