In another sign of an economy that is failing to provide for working families, the share of female-headed working families considered low- income is increasing nationwide. There are now 4.1 million low-income families headed by working mothers in the United States, according to a new report by the Working Poor Families Project. The number of low-income working families that were headed by women jumped to 58 percent of the total in 2012, up from 54 percent in 2007. Figures are substantially higher for communities of color.

The low-income threshold for a family of three with two children was $36,966 (roughly twice the federal poverty line), according to the authors of the report.

The picture isn’t any rosier in North Carolina, which ranks 19th in the nation for the number of female-headed, low-income families. Of the 380,113 low-income working families in the state, 40 percent—or roughly 151,000—were headed by working mothers. Working hard simply isn’t enough for these families to make ends meet. Yet, we know that our economy grows best when the gains are broadly shared across the income distribution. Read More

North Carolina has the 10th highest poverty rate in the nation—down from 13th last year—with more than 1 in 4 of its children living below the federal poverty line. Our state also faces widespread income inequality and less economic mobility than the nation and the southeastern region. Rather than pursue a mix of tax and budget policies that boosts economic security for middle-class and low-income families, state lawmakers instead enacted a tax plan that shifts taxes away from the wealthy and towards the bottom 80 percent of taxpayers, on average.

The tax plan drains $525 million in available revenue for public investments over the next two years—a figure that balloons to at least $650 million within five years.

Consider what could have been done to help improve a child’s shot at the American Dream if state lawmakers didn’t choose to cut taxes for the wealthy and profitable corporations. Over the next two years, these dollars could have been used to provide a package of poverty-busting and mobility-lifting investments such as:

  • Eliminating the waiting list for the North Caroline pre-Kindergarten program;
  • Keeping and strengthening the state Earned Income Tax Credit, which helps boost the income of families who work in low-wage jobs;
  • Maintaining the income tax deduction for contributions to North Carolina’s 529 college savings plans (which was eliminated in the tax plan); and
  • Maintaining funding for the 10 nonprofits that promote economic development in economically lagging and distressed communities across the state – these entities include the Institute of Minority Economic Development and its Women’s Business Center

Despite lawmakers’ assertions, academic research simply lacks consensus on whether cutting taxes is an effective strategy for boosting the state’s economy and creating more jobs.  However, an established and growing body of research exists that show the value of public investments, which serve as the building blocks of a strong economy and family economic security. Read More

There are many wildly misleading claims about poverty in America. Unfortunately, many of these myths are taken as truth despite plenty of evidence to the contrary. And yes, self-identified think-tanks peddle these myths far too often. As we mark the 50th Anniversary of President Johnson’s launch of the War on Poverty, here are the top 5 myths that should be put to rest in 2014:

1.      The War on Poverty Failed

Many pundits often assert that poverty-reduction efforts have failed and likely point to the official poverty level to support their claims. But, when you examine a more accurate measure of poverty the evidence is clear that the War on Poverty launched during the Johnson era and those implemented thereafter—such as the Earned Income Tax Credit—have helped make substantial progress against poverty. Still, without question, much more needs to be done to help further reduce poverty and hardship and promote economic opportunity.

2.      “Welfare” Pays Better than Work

Folks insisting that it pays better to be jobless have yet to produce findings that stand up to serious scrutiny. Read More

The second Quarterly General Fund Revenue Report from the Fiscal Research Division of the NC General Assembly reveals some underlying and troubling trends in the economy. It also foreshadows some of the particular challenges of the new tax plan—namely the tax rate reductions for profitable corporations.

On net, the General Fund was $83.5 million above the $10.02 billion revenue target for the first-half of the current fiscal year that ends in June. Revenue collections were ahead of target largely due to a “stronger-than-expected” performance by the corporate income tax. As the economy has slowly improved, corporate profits have been on an upward trend. Collections from the corporate income tax were ahead of target by nearly $90 million.

The new tax plan, however, diminishes the ability of corporate income tax collections to contribute to public investments and support revenue recovery after a downturn in the future. Read More

Gene Nichol—Boyd Tinsley Distinguished Professor and Director of the Center on Poverty, Work and Opportunity at the UNC School of Law—wrote a year-long series in the News and Observer last year that highlighted poverty’s persistent and varying grip on North Carolinians. The timing could not have been more perfect. A group of state lawmakers were intent on dismantling the state’s public structures even though the economy was failing to deliver for far too many of our family members, friends, neighbors, and fellow North Carolinians.

Mr. Nichol cites some startling figures that I’ve shared in this space before, such as the troubling trend of poverty among children of color that is edging closer and closer to half of the population. But Nichol did what I couldn’t do: he tapped into the hearts and minds of his readers by eloquently moving beyond the bloodless statistics. He brought to light the disturbing and stark reality of how the iconic images of the faces of poverty 50 years ago when the War on Poverty was launched are not all that different from the working poor of today.

To the disbelief of many, he documented the experiences of those living in extreme poverty out in the eastern part of our state—experiences that are so meager that some live in shacks with no in-door plumbing. Read More