Commentary

From last rites to life support: New study confirms weakness of NC’s economic “recovery”

As it has at the national level, North Carolina’s official unemployment rate continues to fall. And while there’s certainly some good news there, numerous analysts continue to explain why this recovery is especially tepid and shallow for a huge proportion of North Carolinians (and why the trickledown economic policies pursued by state leaders continue to fall short). The latest comes from the economic wonks at CFED. Here’s the release:

New Report Finds North Carolina Ranks Near the Bottom for Financial Security of its Residents
Overall Poor Performance Shows Persistent Financial Insecurity, Need for Comprehensive Public Policy Response

Washington, D.C. – Despite an improving national economy, new data released today by the Corporation for Enterprise Development (CFED) show many North Carolina residents are barely scraping by. CFED’s 2015 Assets & Opportunity Scorecard ranked the state near the bottom among all states for its high number of low-wage jobs (ranked 41st), as well as its high number of low-income residents who don’t have health insurance (42nd) or a four-year college degree (44th).

The troubling data underscore the need for programs and policies that help more families achieve financial security, including reinstatement of the state’s Earned Income Tax Credit (EITC) and expansion of Medicaid. Additionally, a Children’s Savings Account program would provide every child in the state with their own matched savings account for postsecondary education. Recent research has shown that these accounts dramatically increase college attendance and graduation rates.

“When North Carolina families struggle every month to make ends meet, they have little ability to save and build a more financially secure future. The Assets & Opportunity Scorecard data make it clear that our state needs to do more to ensure all residents have the opportunity to move forward and succeed,” said Donna Gallagher, steering committee member of the NC Assets Alliance and Executive Director of The Collaborative.

CFED’s 2015 Assets & Opportunity Scorecard offers the most comprehensive look available at American’s ability to save and build wealth, fend off poverty and create a more prosperous future. The Scorecard provides rankings for the 50 states and District of Columbia on both the ability of residents to achieve financial security and policies designed to help them get there.

The Scorecard evaluates how residents are faring across 67 outcome measures in five different issue areas- Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. This year, North Carolina ranked 41st in the overall assessment, a slight increase from 46th place last year. The state made its poorest showing in Health Care, receiving a rating of “F” and ranking 48th overall. High rates of uninsured households (18.1%) and significant disparities in insurance coverage by income contributed to this low ranking. North Carolina also ranked among the worst states in Businesses & Jobs (ranked 43rd), with a low rate of small business ownership (1.3%) and a high disparity of business ownership between races driving down the state’s “D” rating. The state received a “C” in Financial Assets & Income, due in part to its low ranking on income poverty (ranked 40th), high rates of unbanked and underbanked households (8.4% and 21.5%, respectively), and poor rankings across several consumer credit measures.

The Scorecard also evaluates 68 different policy measures to determine how well states are addressing the challenges facing residents. Having adopted 29 of the 68 policies, North Carolina ranked 14 th overall and ranked in the top half of all states in four of five issue areas, including Financial Assets & Income (8th), Businesses & Jobs (23rd), Housing & Homeownership (3rd), and Education (13 th). The state ranked lowest in Health Care (39 th), adopting none of the policies in this area.

Nationally, the Scorecard data finds millions of Americans have been left out of the economic recovery with little opportunity to take charge of their financial lives or plan for a more secure future. Large percentages of these households are experiencing profound levels of exclusion from the financial mainstream as they struggle in low-wage jobs and are forced to rely on fringe, often high-cost financial services just to make ends meet. Among the key findings:

  • Low-wage jobs have increased in all but two states. Thirty-six states and Washington, D.C., saw decreases in average annual pay between 2012 and 2013.
  • Nationally, 56% of consumers have subprime credit scores, meaning they cannot qualify for credit or financing at prime rates and are more likely to use costly alternative financial products. One in five households regularly relies on fringe financial services, such as payday loans, to meet their needs.
  • Liquid asset poverty rates – the percentage of households with less than three months of savings at the poverty level – are particularly high in states with the greatest levels of income inequality. This trend is most evident in poor states in the South and Southwest and high-cost states on the East and West coasts, all of which have large populations of color. If families can’t save, closing the wealth gap is all but impossible.
  • In 34 states, the gap in homeownership rates between households of color and white households has widened. The 10 states where the gap is greatest are Rhode Island, New York, Massachusetts, Connecticut, Wisconsin, South Dakota, North Dakota, Minnesota, New Jersey and Kentucky.
  • High-cost (or subprime) mortgage loans-one of the main culprits behind the housing boom and bust-are on the rise. The percentage of homeowners with high-cost mortgages is higher in 42 states than it was in 2010.

“The economic recovery experienced by some segments of our society is barely a blip in the lives of millions of Americans who continue to struggle in low-wage jobs and have little ability to save and build a better future for themselves and their children,” said Andrea Levere, president of CFED. “In far too many cases, these households are living outside the financial mainstream, relegated to using often high-cost financial services that trap them in a cycle of debt and financial insecurity.”

To read an analysis of key findings from the 2015 Assets & Opportunity Scorecard, click here. To access the complete Scorecard, visit http://assetsandopportunity.org/scorecard. Visit our media resources page for interactive data tools, including our asset poverty calculator, downloadable infographics, customizable charts and maps, and other data visualizations.

13 Comments


  1. Alex

    January 29, 2015 at 8:29 am

    The entire nation is in this same quandary, not just North Carolina. Obama’s policies have made the rich richer and the poor poorer, and there has been no recovery for the middle class. Just a very sad situation for a lot of folks when the only thing we grow is more poverty.

  2. ML

    January 29, 2015 at 11:20 am

    Obama’s economic policies haven’t changed from the policies he has inherited from his predecessors. You’d have a point if they were any different but sadly they consist of the same wishful thinking. Primarily because any economic policy change or stimulus has been blocked by republicans. In reality the obama economy is the republican policies that have been in place since Reagan.

  3. Alex

    January 29, 2015 at 7:35 pm

    I guess ML never heard about the $8 Trillion in debt that Obama has created in 6 years which certainly would qualify as stimulus. I guess he never heard of the $4 trillion created off the books by the federal reserve that went directly to the big banks and then straight on to Wall St bypassing Main St. I guess he never heard of the crazy Dodd-Frank myriad of regulations created by Obama that essentially killed community banks and drastically reduced loans to small businesses. I guess he never heard of all the projects cancelled because of an overzealous EPA including the Keystone pipeline. Must be a time warp there.

  4. david esmay

    January 29, 2015 at 7:45 pm

    I guess Alex forgot it was the policies of the previous admin that created the debt in the first place and the policies of the right that have been eroding the middle class for decades. Must be amnesia there.

  5. ML

    January 29, 2015 at 10:38 pm

    Thanks for clearing that up David.

  6. Alan

    January 30, 2015 at 7:01 am

    “Obama’s policies have made the rich richer and the poor poorer, and there has been no recovery for the middle class” What nonsense, the wealth gap has been in effect, and growing alarmingly, since Reagans time. Blaming Obama is simply partisan nonsense, not substantianted by ANY facts. Perhaps if we didn’t have the GOP entirely funded and influenced by corporate special interests, they would have made efforts to address the trend when they held office?

  7. LayintheSmakDown

    January 30, 2015 at 7:47 am

    Alan, the wealth gap has been there forever. This is not a situation that magically appeared in the 1980’s.

  8. Alex

    January 30, 2015 at 8:48 am

    If Alan would just take time to read his history books, he would see that Reagan restored the middle class with huge income gains during his terms.

  9. Alan

    January 30, 2015 at 12:01 pm

    What, the same Saint Ronnie Reagan, patron saint of tax increases & terrorist funding? Same guy?

    LSD, a wealth gap exists in every society, and has for all time, the shift in tax burden to the middle and working classes started while Reagan was in office, and have only increased since, only serving to increase the divide between rich and poor.

  10. ML

    February 2, 2015 at 1:48 pm

    Why is it republicans think taking things from the poor will make them work harder but the rich will only work harder if we give them more things?

  11. LayintheSmakDown

    February 2, 2015 at 4:47 pm

    Alex, looking at facts is not a skill that is encouraged in progressive circles. It is only about the talking points handed down by their ruling class.

  12. ML

    February 2, 2015 at 8:35 pm

    Kettle black. Thanks for the humor lsd.

  13. LayintheSmakDown

    February 3, 2015 at 4:08 pm

    Yes, thank you guys. My talking points are only handed down by me though, that way I know they have maximum trolling potential.

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