Poverty and Policy Matters

PlaceMattersBTC

 

 

 

 

This blog post is part of a series called Place Matters. The other posts can be accessed here and here

Imagine living in a community that includes the most undesirable and hazardous amenities a place has to offer such as a waste transfer station, a sewage treatment plant, and several landfills. Now, imagine being represented by county officials who decide to provide water and sewer services to an animal shelter but not to the residents—who happen to be more than three-quarters African American. And, these facilities primarily serve the majority-white residents in adjacent communities. Unfortunately, the residents of Royal Oak in Brunswick County don’t have to imagine this; they face this reality every day.

Majority-minority* and low-income Tar Heel communities face widespread environmental injustices—and environmental racism—that harm residents’ overall health and economic security. Such exclusion is exposed in a UNC Center for Civil Rights report, The State of Exclusion: An Empirical Analysis of the Legacy of Segregated Communities in North Carolina. Read More

Allan Freyer contributed to this blog post

The American Dream is continuing to slip out of reach for many North Carolinians. Far too often, working hard just isn’t enough to lift many of North Carolina’s low-income workers out of poverty, according to a new report from the NC Budget & Tax Center.

As we mark the 50th anniversary of the War on Poverty, the report finds that the persistence of economic hardship in North Carolina is largely due to a changing economy and the replacement of middle wage jobs in manufacturing with poverty wage jobs in the services sector. As a result, public investments in the safety net—such as food assistance and tax credits for working families—and economic development programs are often all that stand between low-wage workers and deep poverty. Far from failing, these are the programs that have lifted hundreds-of-thousands of Tarheel workers out of poverty while also helped those living just-above the poverty line too.

Specific findings include the following: Read More

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