NC Budget and Tax Center, Poverty and Policy Matters

December 2017 local labor market release: A closer look at the Sandhills

Amid rosy data showing that 98 counties had unemployment levels lower in 2017 than in 2016 there is plenty of evidence that many North Carolinians are still hurting. Over the broader period since the start of the Great Recession, 57 counties still have fewer employed workers than at that time, and 27 counties have unemployment levels at least one percentage point above the state average. The pain felt in these communities, that are in many ways worse off now than they were before the Great Recession, prove that the tax cut only approach has failed much of North Carolina. We must focus on an economic strategy that supports a recovery for the unemployed and their families throughout all the state’s communities.

A closer look at the metropolitan and micropolitan places in the Sandhills, a region that includes Cumberland, Harnett, Hoke, Lee, Montgomery, Moore, Richmond, and Scotland counties, reveals some troubling spots. While micro areas like Sanford (4.9%), Dunn (5%) and Pinehurst-Southern Pines (4.5%) have relatively low unemployment rates, peer places like Laurinburg (8%), Lumberton (6.4%) and Rockingham (6.1%) fare much poorer. The metropolitan area Fayetteville, which serves as an economic engine for the Sandhills region, is hamstrung by an unemployment rate at 5.5%, higher than the state average at 4.4% in December 2017. For many bedroom communities such as Hoke, Scotland, Harnett and Lee, Fayetteville’s lack of a full recovery from the Great Recession could pose a drag to their economies as jobless workers hold back on spending and face challenges in paying bills, staying in their homes.

“Beaver Creek” Photo Credit: Gerry Dincher

Other highlights from this month’s labor market data include:

• Labor force shrinkage: Nearly 60 percent of all North Carolina counties have experienced a decrease in their labor force from 2016 and pre-recession levels. Duplin and Alleghany counties have seen their labor force diminish at the state’s highest rates year over year, – dropping 5.2% and 5.3% respectively. While there are several possible reasons for this decline, it is plausible that citizens are dropping out the search for work or out-migrating to other counties.

• East of I-95 metropolitan areas continue to lag behind the rest of the state. While improving, 6 out of the 7 metropolitan statistical areas east of Interstate 95 still featured unemployment rates higher than the state average for the entirety of 2017. For 12 consecutive months, Fayetteville, Goldsboro, Greenville, Jacksonville, New Bern and Rocky Mount experienced joblessness rates higher than other metropolitan areas throughout the state.

NC Budget and Tax Center, Poverty and Policy Matters

A community conversation about poverty and opportunity in Goldsboro

On Wednesday afternoon, January 17th Gene Nichol stood at a podium at the First African Baptist Church in Goldsboro, NC, cleared his throat and told an expectant community what it already knew, “that its city was uniquely gripped by poverty”.

What those 130 in attendance may not have completely grasped prior to this presentation was the contextualized nature of poverty and how this grip blocking the potential for everyone’s prosperity.

After 18 months of work in Goldsboro, Gene Nichol and Heather Hunt released a report titled “Goldsboro: Isolation and Marginalization in Eastern North Carolina” which not only highlighted statistically how poverty ravages the community, but gathered narratives from residents who experience it day to day.

With detail, after excruciating detail, Nichol’s talk illuminated the depths of poverty in this Eastern NC city.  Sometimes audible gasps from the audience followed revelations like the fact that more than half of African American children living in poverty or that the middle class in the city had declined some 12% from 2000 to 2014. These were the details that Nichol was able to share in the 30 minutes allotted for his talk, the report reveals much more.

Divided into five parts, the particularly revelatory sections were “People, Poverty and the Economy,” “Concentrated Poverty, Isolation and Crushing Hardship” and “The Centrality of Effective Education for All.”

People, Poverty and the Economy” paints the demographic picture of the city for the past 36 years and found that as the white population has dropped to 38% as the African American and Latinx populations rose to 51% and 6% respectively. The section also reveals the median household income as an indicator of the city’s economy compared to the state and Wayne County. The authors show that in 2016, North Carolina’s median household income was $48,256, Wayne County’s was $40,457 and Goldsboro’s was $32,148. Data reveals that the middle class in Goldsboro exposed a terrifying trend for the long-term prosperity of the city. As mentioned earlier, Nichol and Hunt reference research from Pew, that shows that from 2000 to 2014 the middle class shrunk 12% in Goldsboro. This represents a decline in the percentage of adults in the city in the middle class from 60% to 48%, while the lower income tier increased from 27% to 41%.  Using Census data, the authors explain that more than 46% of Goldsboro’s household earn less than $30,000 a year, 13% earn less than $10,000 annually. Nichol and Hunt argue that prosperity and poverty are intensely stratified by race. They present Census data that reveal that white families earn $20,000 more a year than black families, more than half of Black families earn less than $30,000, and while 13% of white families are poor, 34% of black families live in poverty.  Their data also show that forty percent of children in Goldsboro are growing up in poverty and that 50% or more of all Black children are growing in this circumstance. These data points only provide the tip of the iceberg as the authors use 25 measures of income and demography to assess the present and future economic condition of the city.

In the next section, “Concentrated Poverty, Isolation and Crushing Hardship” the authors turn to the words of the those living in or serving residents in the four census tracts with the highest concentrations of poverty to provide a more humanistic understanding of poverty’s consequences. Census tracts 14, 15, 18 and 19 each have poverty rates of 33%, 35%, 42% and 40% respectively.

Shirley Edwards, a retired mental health administrator, explained to the authors that the “poor who live there are separated off, segregated out. That breeds discontent and disconnection.” Nichol and Hunt discovered Tonya Robertson, who is a teaching assistant with six young children. Her marriage of fifteen years failed forcing her to live in one of the census tracts where poverty rates reach upwards of 40%. She described falling into poverty after being situated in the middle class as gut punch. The safety net intended to help her get back there is not working.  She states that where she lives gun shots are commonplace, day and night. Sadly, Tonya cannot afford to move because affordable housing is scarce. She has to work, and this retards her progress towards a degree in education that would qualify her to become a teacher. The authors recount that Tonya feels trapped in a situation deteriorating around her.

These stories are not the only ones. This section features eight such narratives from different perspectives, all illuminating the devastation that the weight of poverty has dealt the city and its people.

In “The Centrality of Effective Education for All” the report introduces the irony of Wayne County being the home of Charles B. Aycock, the education governor while at the same time being the white supremacist governor of North Carolina. Nichol and Hunt captured that this kind of duality has persisted and affects poor people’s access to education in Wayne County and Goldsboro from Shirley Edwards. She surmised that while the schools are present that quality education was never the goal or outcome for poor people in the county. “Entrenched poverty” were in her words the product of this purposeful policy.

This, of course, has tremendous implications for those who live in the city. Patricia Yates, former director of Literacy Connections of Wayne County, believes that the lack of literacy is just one of the outcomes of a school system that remains uncommitted to serving all. Yates argues that one in ten adults in Goldsboro is completely illiterate while 25% reads below a third-grade level and almost 60% read below a high school level. This by extension bounds a certain percentage of the population to life prospects that should not be acceptable for any community.

The authors of this report Gene Nichol and Heather Hunt provided a detailed analysis of the lived experience in Goldsboro and poverty through statistics and conversations. Such a complete assessment of a challenge afflicting people should and can inform solutions.

Poverty and Policy Matters

Happy Equal Pay Day

If you work, you deserve to get paid. Sadly, in these times, even that statement is controversial (just see all our wage theft work).

So if it’s hard to even get workers paid, period, it shouldn’t be surprising that there are still opponents to the idea that women deserve equal pay for equal work. Maddening, but not surprising.

Today is Equal Pay Day, and new article from WomenAdvanNCe highlights the all-too-trouble wage gap that still exists. The piece reports on some statistics you’ll have heard (nationally, women make 78 percent of the salary earned by men doing the same job) and some you may not have.

As is often the case, the numbers get most tragic and shocking when broken out by race:

For North Carolina women, the statistics are slightly better. We make 82 cents on the dollar on average, but those numbers plummet for minority women: African American women in North Carolina make 64 cents on the dollar, while Latina North Carolinians make less than half of what men make at 48 cents on the dollar.

Sad and angry about this? You have a right to be. Want a good laugh that makes this same, all-too-salient point? Check this out.

 

Poverty and Policy Matters

Like saving money and protecting your health? Expand Medicaid

There are few situations in life that are clearly win-win. When you see one, you have to take advantage of it.

That’s why North Carolina should reverse course and expand Medicaid. When you have the chance to improve health care for hundreds of thousands of people and actually save money, you should jump on it.

In a recent News & Observer editorial, the paper called the decision not to expand Medicaid “wildly irresponsible and hugely expensive.” That’s precisely correct, and let’s explore the first part of the statement a bit more.

Turning down Medicaid expansion turns down $50 billion in federal funding and prevents roughly 400,000 of our neighbors from getting covered. That makes expanding Medicaid an obvious choice.

But also consider that preventative care saves money over the long run. Insuring people means they get to go to the doctor, which means we pay less to prevent disease. This leads to lower costs for taxpayers and better lives for our people. An excerpt from the N&O piece:

Community Care said in a news release: “The medical costs for low-birth-weight babies average $49,000 in a baby’s first year of life, or more than 10 times more than babies born without complications. A low birth weight also increases a child’s risk for long-term medical and developmental complications and the likelihood of incurring additional expenses for social services and educational needs in later years.”

Kate Berrien, manager of Community Care’s pregnancy project, said North Carolina now leads the South in having the fewest births before 39 weeks. That’s a lot of savings and a vast increase in the quality of life for many children born to low-income mothers. And it’s an achievement attributable to innovations in community-level care that were developed in North Carolina and are being adopted across the nation.

It’s a win-win situation. Tom Wroth, CCNC’s chief medical officer, said, “We’ve been able to align improving clinical quality with lower cost.”

Read that last paragraph again. Improving quality care with lower cost is a win-win. So is expanding Medicaid.

NC Budget and Tax Center, Poverty and Policy Matters

A not so Carolina Comeback

When the Wall Street house of risk came crashing down in 2007, it wrecked local economies across North Carolina. Business finance dried up, people and businesses bought less, home values took a hit, and so employment dropped, sharply. Along with the rest of the U.S., we have seen the worst days of the recession pass and some stability and growth return. Business credit is still tight, consumer spending looks to be getting stronger, and the housing market is definitely on the rise again, but employment has been very slow to grow.

We’ve heard a lot about the “Carolina Comeback” recently, and expect to hear even more during 2015. The story generally goes that slashing state taxes and spending has resurrected an economy that was broken by federal policy, not to mention a century of democratic rule in the legislature. The problem with this story is that the comeback is a national one, most of which has nothing to do with changes to North Carolina policy.  A far better explanation, as can be seen in the charts below, is that the current recovery is neither robust nor unique to North Carolina, but instead follows the national and regional trajectory.

2014 End of Year Charts_slowest recovery in generations

Compared to the previous three major recessions, the current recovery has been stubbornly sluggish. It took more than five years for our state to get the jobs that were lost during the recession back, where the damage from the previous three recessions was repaired in less than half that time.

If the first chart looks familiar, it should. National employment trends over the last several recessions look very similar to what we have seen in North Carolina. This brings us to the second problem with the Carolina Comeback myth, it is not a Carolina story.

2014 End of Year Charts_regional job growth

As can be seen below, North Carolina employment has generally followed the same trend as other states in the southeast. From 2000 on, the share of working age people who have employment has declined, with a particularly sharp drop in 2008 and 2009 as the Great Recession hit. Over the last few years, employment growth in North Carolina has been modestly stronger than most states in the Southeast, but even after these comparatively strong years, North Carolina remains decidedly middle of the pack.

All told, there just isn’t much real evidence of a distinctly Carolina Comeback. The recovery has been agonizingly slow in North Carolina as it has been across the country. Credit and blame do not have a home address, they knock on many doors and visit many living rooms. We have a lot to do as a state and as a country to adapt to the 21st century economic system. Moving into 2015, we should focus on what can be done to address the problems that remain, rather than trying to wish them away with nice sounding phrases.