NC Budget and Tax Center

Labor Day fact: SNAP helps 1 in 9 NC workers put food on the table

For many working North Carolinians, their wages alone are not enough to make ends meet. The Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) is a critical tool many working families rely on in order to put food on the table. According to new analysis from the Center on Budget and Policy Priority, SNAP helps 1 in 9 workers in North Carolina and 495,900 people in working households. SNAP and similar programs are becoming increasingly important as our state economy continues to loose middle-wage jobs. Between 2007 and 2016, North Carolina saw a loss of nearly 81,000 middle-wage occupations and an increase of over 90,000 low-paying jobs.

SNAP helps many workers who earn low wages, who have unpredictable schedules and paychecks, and who are in between jobs.

The report finds that:

  • Many workers and their families participate in SNAP while they are working or are looking for work. SNAP’s program and benefit structure supports work. While many participants work while participating in SNAP, many also apply for benefits to support them while they are between jobs.  Thus, many workers participate in SNAP for part of the year and stop participating when they are earning more.  Three-quarters of the working poor who were eligible for SNAP at some time during the year were eligible for only part of the year, an Agriculture Department study found.
  • Millions of Americans work in jobs with low pay. For example, a recent analysis found that up to 30 percent of Americans work in jobs with pay that would barely lift a family above the poverty line, even if they were working full-time, year-round.
  • Occupations that pay low wages are numerous and many are growing. Six of the 20 largest occupations in the country which together employed about 1 in 8 American workers, had median wages close to or below the poverty threshold for a family of three in 2016:  retail salespersons, cashiers, food preparation and serving workers, waiters and waitresses, stock clerks, and personal care aides). And eight of the ten jobs that are expected to add the most new jobs over the next decade have median wages below the national median, and many much lower.

To learn more about how SNAP supports workers, read the full report here.

NC Budget and Tax Center, Trump Administration

In N.C., 42% of Trump’s proposed tax cuts would go to the few making more than $1 million

On July 27, the White House released a statement on Tax Reform that stated tax-writing committees in Congress would work this fall to “develop and draft legislation that would result in the first comprehensive tax reform in a generation.” The White House statement was blunt in stating “the American people have elected a President and Congress that are fully committed to ensuring that ordinary Americans keep more of their hard-earned money.”

However, a newly released report confirms that the White House is not really interested in tax reform that helps “ordinary Americans”. Instead, under President Trump’s proposed tax cut plan, “ordinary Americans” will hardly benefit at all, as nearly half of Trump’s proposed tax cuts would go to people making more than $1 million annually, according to the report by the Institute for Taxation and Economic Policy (ITEP).

As it pertains to North Carolina, the new report is clear in pointing out:

“A tiny fraction of the North Carolina population (0.5 percent) earns more than $1 million annually. But this elite group would receive 42.4 percent of the tax cuts that go to North Carolina residents under the tax proposals from the Trump administration. A much larger group, 50.8 percent of the state, earns less than $45,000, but would receive just 5.9 percent of the tax cuts.

The first group, the millionaires, would receive an average tax cut of $150,550 in 2018, equal to 6.4 percent of their income. The second group, those making less than $45,000, would receive an average tax cut of just $190, equal to 0.8 percent of their income.”

That report concludes with the confounding fact that the Trump tax principles would also reduce revenue in the U.S. by at least $4.8 trillion over 10 years. If this drastic approach took effect at the federal level it would put NC and our local governments at risk, as our state would not be able to sustain vital programs that help people thrive due to the costly tax cuts at both the federal and state level. In a recent brief the NC Budget & Tax Center stated: “The costly tax cuts in the new [NC] budget represent missed opportunities by lawmakers to ensure that the needs of a growing state are adequately met and to boost public investments that promote opportunity and broadly shared prosperity.”

If you are wondering how all of this is possible, here are the known Trump tax cut proposals that would primarily help the super-rich and would reduce U.S. revenues by $4.8 trillion over 10 years:

– Repeal of the 3.8 percent tax on investment income for the rich.
– Repeal of the Alternative Minimum Tax.
– Repeal of personal exemptions and doubling of the standard deduction.
– Replacement of current income tax brackets with three brackets: 10 percent, 25 percent, and 35 percent.
– Elimination of all itemized deductions except those for charitable giving and home mortgage interest.
– Special tax rate (15 percent) for businesses that do not pay the corporate income tax.
– New deduction and tax credit for child care.
– Repeal of special tax breaks for businesses and reduction in the corporate income tax rate from 35 percent to 15 percent.
– Repeal of the estate tax.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center

Busting the myths about affirmative action

As the federal government moves to investigate the perceived harm that affirmative action has inflicted on white college hopefuls, it’s important to separate truth from fiction. This investigation is powered largely by myths. The truth is, people of color continue to face barriers to higher education and economic stability. And affirmative action hasn’t gone far enough in removing those barriers.

Myth: Affirmative action exclusively benefits people of color

Reality: Decades of data show that white women are the primary beneficiaries of affirmative action policies. So white women get the economic stability that comes with removing unjust barriers to success, but people of color continue to miss out.

Myth: People of color now make up the majority of college students

Reality: Harvard University recently made headlines because its incoming freshman class is less than 50 percent white for the first time in its history. However, most college and universities aren’t following that trend. And while the white-Latinx college enrollment gap has narrowed over the last decade, the white-Black enrollment gap has not. Higher education remains predominantly available to white people.

Myth: Affirmative action gives people of color a free ride to college

Reality: Nationwide, just under 40 percent of Black 25- to 55-year-olds carry student loan debt. The number drops to around 30 percent for Latinx and white people. But the incidence of student loan debt isn’t the sole issue. There’s also a wide racial gap in average debt amounts. Black students and their families incur twice as much student loan debt upon graduation. According to a 2016 Brookings Institute report, four years after graduation the Black-white debt gap more than triples from $7,400 to $24,720.

Instead of intergenerational wealth, communities of color are more likely to suffer intergenerational debt. And as North Carolina tuition costs continue to rise, this problem will worsen and the barriers to racial equity will grow.

Nearly two-thirds of North Carolina college graduates collect student loan debt along with their degrees. Meanwhile, state funding for public universities has declined since 2008, which puts the burden of funding on tuition-paying students and their families. And the debt amounts bear that burden out. Over the past 10 years, the average student loan debt has increased from roughly $16,000 to $25,000. Meanwhile the median income in our state has barely budged.

So while the federal government continues to question minority students’ presence in colleges, those same students are increasingly getting priced out of a college education and the ladder to the middle class that that education used to provide.

Marion Johnson is a Policy Advocate with the Budget & Tax Center, a project of the NC Justice Center.

NC Budget and Tax Center

Job announcements still fall short of 16,000 new jobs needed every month in N.C. to get back to pre-Recession levels

The North Carolina GOP released a press release this week touting August job announcement figures as indicative of the success of their policy choices that have cut taxes for the wealthy and profitable corporations, put our natural resources at risk and reduced support for the tools like unemployment insurance and job training for people who have lost their jobs.

Set aside that once again there has been no causal relationship proven through the simple statement of job growth occurring. It remains important to evaluate these statements against what we know.

First, the job announcements in August have not materialized into jobs just yet.  From time to time, there are announcements that don’t end up turning into actual jobs, despite best efforts. Moreover, it is unclear how many of the jobs will go to current North Carolina residents and how many will go to those relocating from other states. The August jobs numbers from the Bureau of Labor Statistics will be released on Sept. 15.

Second, North Carolina’s job growth year over year continues to be on par with national job growth.  From June 2016 to June 2017, North Carolina’s employment grew by 1.7 percent, while the nation’s grew by 1.6 percent. This suggests that North Carolina’s policy choices are not driving differences in employment growth but instead that the state is finally growing in step with the nation.

Finally and most importantly, this job growth is insufficient to achieve pre-Recession levels of employment. Each month North Carolina would have to create 16,000 jobs to make progress towards that employment level in the face of a growing population.

Three thousand may get us a fifth of the way there, if they materialize. But we’d like to see a press release on what their plan is to actually boost employment for those who continue to face too few job opportunities in their community, need retraining for new industries, and experience other barriers to employment. Because tax cuts just make it more difficult to close the jobs gap in North Carolina that persists eight years after the national recovery began.

Alexandra Sirota is the Director of the Budget & Tax Center, a project of the NC Justice Center.

NC Budget and Tax Center

A look at the seven N.C. Counties that will be on the Eclipse’s “path of totality”

Next Monday, Aug. 21, the continental U.S. will experience a total eclipse of the sun from coast to coast for the first time in 99 years, and North Carolina is one of the 14 states that will be in the eclipse’s “path of totality.” Across the U.S., 290 counties will be in the path of totality, and seven of these counties are here in our state.

The seven N.C. counties that will be in the path of totality include: Cherokee, Graham, Swain, Clay, Macon, Jackson and Transylvania.

That the solar eclipse will draw millions of people to mostly rural counties across the U.S. is no secret. However, what might be unknown on that day to millions of travelers is the actual population and poverty rate of the rural county that they are visiting, and what it truly looks like when the sun does shine.

Here are the populations, poverty rates, and interesting facts about the seven N.C. counties that will be in the eclipse’s path of totality. It is worth noting that five of the seven counties have a poverty rate that is higher than the state average (16.4 percent), six of the seven counties have a median age that is significantly higher than the state median age (38), and the combined population of the seven counties (175,016) is equivalent to double the population of Asheville.

A look at the seven North Carolina counties that will be on the Eclipse’s path of totality

County

Population

Poverty Impacts (State average: 16.4%)

Median Age (State Median Age: 38)

Interesting Fact

Cherokee

27,935

18.3% of county
residents (4,902 people)

50

Is the westernmost county in NC.

Graham

8,684

21% of county
residents (1,783 people)

45

Is the only dry county in NC (the only one in which alcohol sales are forbidden).

Swain

15,256

16.2% of county residents (2,295 people)

41

The county seat, Bryson City, has two live webcams to view the city happenings from.

Clay

11,140

17.4% of county
residents (1,845 people)

51

377 is the total population of the town of Hayesville, the county seat.

Macon

35,411

18.8% of county
residents (8,183 people)

49

Home to various waterfalls (Cullasaja Falls, Dry Falls, Bridal Veil Falls, Quarry Falls).

Jackson

42,221

20.9% of county
residents (7,879 people)

37

Richland Balsam is the county’s tallest peak (6,410 ft.) as well as the highest point along the entire Blue Ridge Parkway (6,053 feet).

Transylvania

34,369

15.4% of county
residents (4,983 people)

51

Is the wettest county in NC, receiving over 90 inches of rain annually.
Sources: The Budget & Tax Center’s County Economic Snapshots (released April 2017), NC OSBM County Estimates.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.