Poverty and Policy Matters

Falling Behind in NC, NC Budget and Tax Center, Poverty and Policy Matters, The State of Working North Carolina

Today is EITC Awareness Day – also referred to as the Earned Income Tax Credit (EITC). The EITC is a federal tax credit that encourages work by boosting the income of low- and moderate- income working people and offsets federal payroll and income taxes. The EITC has proven to be a powerful tool in helping lift families out of poverty and improving the well-being of young children.

In 2007, a state EITC was established to help further boost the wages of low- and moderate-income workers in North Carolina and offset the higher share of state and local taxes they pay as a percent of their income compared to high-income workers. More than 900,000 North Carolinians claimed this tax credit in 2011, according to the most current tax information provided by the NC Department of Revenue. The impact of the EITC spans across the state, with taxpayers in each of the state’s 100 counties claiming the tax credit (see this interactive map).

Unfortunately, this tax filing season will mark the last year that low- and moderate-income North Carolina workers will benefit from the state EITC. State leaders allowed the state EITC to expire at the end of last year and chose not to extend the tax credit as part of the tax plan passed last year. As a result, the expiration of the state EITC represents a tax increase for more than 900,000 hardworking low- and moderate-income North Carolina taxpayers, for which every dollar counts in their efforts to make ends meet.

NC Budget and Tax Center, Poverty and Policy Matters

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

NC Budget and Tax Center, Poverty and Policy Matters

As we noted in this space on Monday, the North Carolina Fund served as a template for President Johnson’s ambitious—and effective—national “War on Poverty” that was launched 50 years ago.  While such efforts began long ago, the policy prescriptions administered by these efforts remain relevant today. Case in point: the North Carolina Fund established a manpower development program aimed at helping to improve the employability of workers in rural parts of eastern North Carolina. Formed as the state’s economy was undergoing structural changes, this program provided jobless workers with on-the-job training, direct job placement, employment counseling, and much more.

With only one job available for nearly every two jobless workers in the state today, policymakers should give serious consideration to a modern version of this program that will fit today’s needs as Tar Heels continue to struggle with elevated rates of unemployment and long-term unemployment. Highlighting the North Carolina Fund’s Manpower Program, below is a second excerpt from “Everybody’s Problem”: Whites, Blacks, and the Fight Against Poverty in Eastern North Carolina, 1963-1969,” written by Karen M. Hawkins and currently under review with the University of Florida Press. Read More

NC Budget and Tax Center, Poverty and Policy Matters

Last week marked the 50th anniversary of President Johnson’s State of the Union Address where he declared an “unconditional war on poverty in America.” As we all work to highlight the progress that has been made against poverty over the last half-century, it is important to acknowledge how the North Carolina Fund served as a template for President Johnson’s ambitious—and effective—national “War on Poverty” as well as the initiative’s own successes.

In that effort, below is an excerpt from “Everybody’s Problem”: Whites, Blacks, and the Fight Against Poverty in Eastern North Carolina, 1963-1969,” written by Karen M. Hawkins and currently under review with the University of Florida Press. On Wednesday, we’ll post a second excerpt from Ms. Hawkins’ book that will highlight the successful Manpower Program that was administered by the North Carolina Fund. This program targeted jobless workers in rural areas, and provided them with on-the-job training, direct job placement, employment counseling, and vocational guidance. Read More

NC Budget and Tax Center, Poverty and Policy Matters

Fifty years ago this week, President Johnson launched a crusade against poverty. As we reflect on those efforts, we must recognize the War on Poverty’s successes as well as the work that remains. The good news is that safety net initiatives inspired by the War on Poverty reduce the number of families living in poverty by almost half, while simultaneously reducing the depth of the hardship faced by poor families. The bad news, however, is that despite this progress, economic hardship still remains high across too many communities in North Carolina.

North Carolina is enduring a painfully slow economy and workers are facing too few jobs and wage stagnation. The ongoing hardship is evidenced in new data released last month by the Census Bureau’s Small Area Income and Poverty Estimates (SAIPE) program. This new data allows us to analyze poverty and income trends in all 100 counties over the same one-year period—a level of specificity not possible in the data released by the Census Bureau last fall. Read More