NC Budget and Tax Center, Poverty and Income Data 2013

5 Takeaways from Census’ new poverty and inequality data for North Carolina

Below are the five key findings from the Budget and Tax Center’s analysis of the new 2013 poverty and income data from the US Bureau of the Census.

  1. The state is making no progress towards eliminating poverty. North Carolina’s high poverty rate (17.9 percent) remained statistically unchanged in 2013. This means that there has been no progress towards alleviating poverty (as measured by the official poverty measure) since before the recession hit. One in five North Carolinians lived in poverty, equating to less than $24,000 in income per year for a family of four. North Carolina has the 11th highest poverty rate in the nation. High rates of hardship persist because of the state’s ongoing job shortage and the rapid acceleration of low-wage work that fails to provide a pathway to the middle class.
  2. Children are the state’s poorest age group—and children of color, especially those under age 5, face shamefully high rates of poverty. One in four Tar Heel children lived in poverty in 2013. Poverty maintains the fiercest grip on children of color, with rates approaching, and in some cases, exceeding 50 percent for certain communities of color under age 5. As North Carolina shifts to being a state where a majority of residents are people of color, persistently high poverty rates among children of color will harm the state’s economy in the long run.
  3. Where you live shapes your access to economic opportunities. A large and growing body of research shows that where one lives can determine if one has access to the educational and employment networks that can pave a pathway to the middle class. Of the 40 counties in North Carolina for which 2013 data is available, the average poverty rate in rural counties is 2.3 percentage points higher than the average for urban counties. With that said, the pockets of deepest hardship exist primarily in inner-city urban areas in the state. So even within a county that is thriving overall, economic hardship can—and often does—vary greatly from neighborhood to neighborhood.
Falling Behind in NC, NC Budget and Tax Center, Poverty and Income Data 2013, Poverty and Policy Matters

Increasing income inequality not a recipe for an economy that works for all

New data released by the US Census highlight the pervasiveness of poverty nationally and in North Carolina. In 2013, one in six North Carolinians lived below the federal poverty rate – less than $24,000 a year for a family of four and  $12,000 a year for an individual. For communities of color, the poverty rate is far worse: 32.5 percent for Latinos, 28.9 percent for American Indians, and 28 percent for African Americans.

These daunting poverty rates highlight that far too many individuals and families across the state face economic hardship. The persistence of poverty has been accompanied by a rise in income inequality, which poses consequential implications for the overall economy and North Carolina’s state economy. The bulk of economic gains from the ongoing economic recovery have flowed to a small group of high-income earners. In the first three years of the economic recovery, the top 1 percent of income earners captured 95 percent of the income gains nationally. Here in North Carolina, income for the top 1 percent of income earners in the state grew by 6.2 percent from 2009 to 2011 while the bottom 99 percent saw their income decline by 2.9 percent. The latest US Census data show that this early post recovery trend is likely to hold. By 2013, the top 20 percent of households in North Carolina captured more than half of all income earned by all households in the state (see graphic below). Read more

NC Budget and Tax Center, Poverty and Income Data 2013

Widespread poverty persists, work and income supports help offset economic pain

The gains of economic growth from 2012 to 2013 passed over low- and moderate-income North Carolinians for yet another year, according to  data released by the US Census Bureau last month. Poverty and stagnant living standards in North Carolina have become the norm during the current economic recovery. High rates of hardship persist because of the state’s ongoing job shortage and the rapid acceleration of low-wage work that fails to provide a pathway to the middle class.

A glimmer of hope exists, however. The poverty rate would have been much worse in the absence of public policies that provide necessary support. US Census Bureau data show that work and income supports blunted the extent of poverty’s reach across the United States. Using an alternative poverty measure, the Supplemental Nutrition Assistance Program (SNAP), Unemployment Benefits, and Social Security helped keep poverty in check by lifting millions of American above the federal poverty line. That’s an annual income of $11,490 for an individual and $23,550 for a family of four in 2013.

SNAP, formerly known as food stamps, lifted 3.7 million people out of poverty and helped them meet basic needs, as illustrated in the graphic below. Read more

NC Budget and Tax Center, Poverty and Income Data 2013

One in Three: North Carolina workers more likely to earn poverty-wages

The latest data on poverty released by the U.S. Census Bureau last week confirms that work does not inoculate adults from experiencing poverty. One in three workers in North Carolina earned poverty wages, up from a low of 24 percent in 2002. The proliferation of low-wage jobs not only makes it difficult for workers to support themselves and their families but it puts a drag on the entire economy by depressing consumer spending.

The poverty threshold for a family of four in 2013 was $23,834. A full-time, year-round worker would need to earn an hourly wage of $11.46 to reach that level. That is well above the current federal and North Carolina minimum wage of $7.25 as well as higher than the proposed increase in the federal minimum wage to $10.10. And yet, low wage workers play key roles in the lives of our communities: they are home health aides who care for our parents or child care providers who are entrusted with the care of our children or bus drivers who get us safely to work each day.

In the increasingly prominent public debate about the falling wages of workers and the failure of the wage standards to ensure work pays, this latest data provides further evidence that workers are not only struggling but that it doesn’t have to be this way.

The trend data show that progrWorkers and Povertyess was made in the state for workers over the past thirty years but has been reversed more recently. North Carolina actually performed better relative to the rest of the nation through the 1980s and 1990s seeing a rapid decline in its poverty rate for workers over that period–an actual reduction from the high of 44 percent of workers earning poverty-wages in 1983. This faster decline is largely attributable to the state’s stronger employment opportunities than the nation in middle-wage industries like manufacturing and construction during that period as well as lower income inequality.

Beginning in the 2000s, those gains were lost as North Carolina began to see an increase in the number of workers earning poverty-wages. Contributing factors to this trend are likely the significant job loss in manufacturing and construction, the fallout of two successive national recessions and the significant growth of low-wage work since 2009. As of 2013, the share of North Carolina’s workers earning poverty wages was four percentage points above the national average.

When workers earn poverty wages, the entire economy struggles as does the broader community. That is because as workers struggle to meet their family’s most basic needs, they are less able to consume on main streets or pay their rent or mortgage. Workers who work hard yet earn poverty wages seek out other ways to bridge the gap in their income whether that be through taking on additional jobs, reducing their time to support their children’s development and their family’s well-being, incurring significant debt through the use of credit or informal loans to make needed payments, or seeking out resources or support from private charities or public programs. The result is an economy that fails to ensure work pays and can support strong local economies through vibrant main streets and stable families.

This is the seventh post in a series that takes a detailed look at the 2013 US Census Bureau poverty data released on September 18th. Previous posts examined: 1) how North Carolina is faring overall; 2) how poverty varies by race, 3) poverty by County; 4) child poverty; 5) the impact, or lack thereof, of the current economic recovery on poverty in our state and 6) the public success of Social Security in bringing down poverty rates for older North Carolinians. Read the entire series here.

NC Budget and Tax Center, Poverty and Income Data 2013

A public success story: North Carolina’s older adults are far less likely to live in poverty

Social SecurityAccording to data released last week by the U.S. Census Bureau, in 2013 the percentage of older adults (65+) whose incomes fall below the federal poverty threshold is lower than it is for children and non-elderly adults. 1 in 10 (10% exactly) older adults in North Carolina lived in poverty in 2013, compared to 17.9% of the state’s population overall and 25.2% of children. The percentage of North Carolina’s older adults living in poverty in 2013 is one percentage point higher than it was in 2007 when the recession hit.

The reason for the comparatively low rate of poverty amongst older adults is plain and simple – Social Security. Established in 1935, this relatively simple and universal public program continues to accomplish its primary purpose of providing basic economic security for older Americans. Read more