NC Budget and Tax Center, Poverty and Policy Matters

Preliminary data shows poverty rate stuck high, with safety-net offsetting some of the economic pain

Economic hardship persisted at high levels in the nation and North Carolina in 2012, according to new figures released today from the Census Bureau’s Current Population Survey (CPS). The national poverty rate in 2012 remained at 15 percent for the second consecutive year, still higher than pre-recession levels three years into the official economic recovery. There were 46.5 million Americans living below the federal poverty line, which was $11,945 for an individual and $23,681 for a family of four in 2012.

This data is yet another confirmation that the economic recovery continues to bypass middle- and lower-income families. The growth is also sidestepping certain demographic groups, including children, communities of color, and women. The child poverty rate in 2012 was 21.8 percent, with nearly 16.1 million children living in poverty. Poverty rates for African Americans and Hispanics were 27.2 percent and 25.6 percent, respectively, compared to 11.7 percent and 9.7 percent for Asians and whites, respectively. Gender disparities also persist, with the poverty rate for women at 16.3 percent—or 2.7 percentage points higher than the rate for men. The poverty rates for these groups were statistically unchanged since 2011.

However, there was statistically significant change for the number of older adults aged 65 and older, people living in the South, and people living outside metropolitan statistical areas who lived in poverty.

Although the state-level data released today is a preliminary estimate, the CPS estimates 17.2 percent of North Carolinians—or nearly 1 in 5—lived in poverty in 2012. It is not surprising that the estimates show the average North Carolinian continues to fare worse than the average American. High poverty rates persist in North Carolina due primarily to a weak and uneven economic recovery, a lack of jobs, and the acceleration of low-paying jobs, as highlighted in the State of Working North Carolina report released by the Budget and Tax Center earlier this month. More robust poverty data will be released this Thursday on state-level data.

Using an alternative poverty measure, the Census Bureau also released data today showing that government safety-net programs have lifted millions of Americans out of poverty. The Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, lifted 4 million people out of poverty. Social Security benefits lifted 15.3 million older adults out of poverty—or to put it another way, the poverty rate for older adults would have quadrupled in 2012 without Social Security benefits. Unemployment insurance benefits kept 1.7 million people out of poverty and the Earned Income Tax Credit (EITC) lifted 5.5 million people out of poverty, including 2.9 million children.

These findings are particularly noteworthy given the deep benefit cuts to SNAP that are on the horizon come November 1st and amid calls from conservatives to severely cut the program. This evidence also makes it all the more troubling that state lawmakers permanently cut unemployment benefits to jobless workers and rejected more than $700 million in federal funds for unemployment benefits for those facing long-term unemployment. State lawmakers also axed the state EITC, which is one of the state’s most effective anti-poverty tools that builds on top of the federal tax credit.

While national and state lawmakers’ austerity fervor makes the outlook for substantially reducing poverty grim, we cannot continue to ignore poverty in our communities and fail to address its root causes. Policymakers must turn their attention to this issue, acknowledge that poverty impacts all North Carolinians, and address the job deficit while supporting families who are struggling to make ends meet.

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