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High poverty rates persist despite economic recovery, Census data shows

Economic hardship persisted at high levels in the nation and North Carolina in 2014, according to new figures [1] released today from the Census Bureau’s Current Population Survey (CPS). The 2014 national poverty rate remained flat at 14.8 percent and still well-above pre-recession levels five years into the official economic recovery. There were 46.7 million Americans living below the official federal poverty line, which was $11,670 for an individual and $23,850 for a family of four in 2014.

In the Washington Post [2] today, Jared Bernstein—a well-respected national economist—explained that poverty is stuck high despite economic growth because the gains of economic growth are accruing mainly to top earners:

“Clearly, the improving economy and falling unemployment have yet to adequately lift the living standards of middle- and low-incomes. The census data show that almost 3 million more people were working year-round in 2014 than in 2013, yet real median earnings were unchanged for both men and women. Poverty remains higher and median incomes lower than before the recession, and this pattern — taking longer in the upturn to make up the losses from the downturn — seems dangerously embedded in the economy.

What explains this economic disconnect between growth, income and prosperity? While longer-term trends — globalization, technology, the absence of full employment, low bargaining power for many workers — have been in play for decades now, in recent years, fiscal policy has been insufficiently supportive of growth, and, in our age of increased income inequality, it takes longer for expansions to reach middle and low-income households.”

Although the state-level data released today is a preliminary estimate, the CPS estimates 17.9 percent of North Carolinians—or nearly 1 in 5—lived in poverty in the 2013-14 two-year period. This means that poverty stayed flat and there was no improvement over the previous 2012-13 two-year period, despite an improving economy. High poverty rates persist in North Carolina due primarily to a weak and uneven economic recovery, too few jobs, and a boom in jobs that pay too little for families to make ends meet [3].

More robust state-level data, including one-year estimates, will be released tomorrow. Check back here tomorrow for those details.