Poverty and Policy Matters

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

NC Budget and Tax Center, Poverty and Policy Matters

 “This administration today, here and now, declares unconditional war on poverty in America. … It will not be a short or easy struggle, no single weapon or strategy will suffice, but we shall not rest until that war is won. The richest nation on earth can afford to win it. We cannot afford to lose it.”

President Lyndon B. Johnson, January 8, 1964

Today marks the 50th anniversary of President Lyndon B. Johnson’s declaration to an unconditional War on Poverty, an effort that was announced during his 1964 State of the Union address. Far too many North Carolinians and Americans still live on the “outskirts of hope” and face the stark realities of poverty. With that said, poverty has fallen significantly over the last half-century (when using a comprehensive measure), illustrating the key role that public policies play in combating poverty and boosting economic security.

Johnson’s War on Poverty laid the foundation for the modern-day safety net, including Medicare, Medicaid, Head Start, SNAP (formerly  known as food stamps), and a boost to Social Security benefits. Policymakers also provided funding towards elementary and secondary education, established the college work-study program, and provided loans for low- and moderate-income students.

The modern-day safety net cuts poverty nearly in half (see chart below) and reduces the depth of poverty among many families living moderately above the poverty line. Read More

NC Budget and Tax Center, Poverty and Policy Matters

Last week, North Carolinians came together to commemorate the 50th anniversary of the North Carolina Fund, an effort that was launched amidst crisis levels of poverty. The mission of the NC Fund was to mount “an all-out assault on poverty,” and while short-lived, it served as a template for President Lyndon Johnson’s ambitious—and effective—national “War on Poverty.”

Those asserting that efforts to reduce poverty have failed point to an antiquated way of measuring poverty. But, when you examine more accurate poverty statistics, it’s clear that the North Carolina Fund and the War on Poverty have helped lift millions of Americans out of poverty.

As Arloc Sherman, a poverty expert at the Center on Budget and Policy Priorities, points out, the official poverty measure doesn’t reflect how safety net programs are helping people:   Read More

NC Budget and Tax Center, Poverty and Policy Matters

To understand the history and work of the highly-esteemed North Carolina Fund, the scope and nature of poverty in North Carolina at that time is needed.

The 1959 U.S. Census found that 40.6 percent of North Carolina’s population was living in poverty, almost twice the national average and the second worst among South Atlantic states.  North Carolinians at that time earned some of the lowest industrial wages in the country, and nearly half left high school before obtaining a diploma. The combined effect of low-wages and low educational attainment was disastrous just as the state was experiencing the fall-out from increased automation and the resulting declining need for low-skilled workers in the factories.

As the economic transformation was beginning to take hold in North Carolina, Governor Sanford recognized that for the state to be competitive there was a need for policymakers to work to diversify the economy, improve public education, and reduce the reliance on low-wage industry.

But first, there remained a growing difference in the quality of life and access to opportunities of North Carolinians depending on where they lived. For many areas of the state, the mountains and eastern coast particularly, infrastructure was limited.  Water and sewer still hadn’t reached many communities in the mountains and roads to facilitate connections to jobs remained limited for more rural parts of the state.  And in urban communities too, the physical deterioration of housing and the concentration of poor families in poor neighborhoods—driven primarily by segregation—created the stark difference of economic experience.

The county-level poverty rates variedPoverty in 1959 by County from a low of approximately 22.9 percent in Forsyth County to a high of 74.3 percent in Greene County in 1959, as illustrated in the map below. Fifty-two of the state’s 100 counties were experiencing poverty rates above 50 percent, meaning more than 1 in 2 of North Carolinians living in these counties lived in poverty.

In 1963, Governor Sanford turned to the issue of the state’s high poverty levels in order to push for greater economic success for the state as a whole.  The North Carolina Fund was the result and its approach reflected the need for physical infrastructure and the development of human and social capital in communities so that viable pathways to the middle class could be established.

NC Budget and Tax Center, Poverty and Policy Matters

At a time when ensuring that all students receive a quality education is more important than ever, students from low-income families are increasingly less likely to experience academic success and educational opportunities than their affluent peers. In fact, students from affluent families are 10 times more likely to graduate from high school and go on to earn a college degree by age 24 compared to students from low-income families.

This skewed outcome alone is startling, but what it projects for North Carolina’s future is even more troubling. With an increasing number of jobs in the state, and nationally, expected to require some level of postsecondary education, we need more of our students from low-income families – who now represent a majority of students in our public schools – graduating from high school and going on to earn a postsecondary credential.

The United States is one of the few advanced nations where more educational resources tend to flow to schools serving better-off children than schools serving poor students, a recent New York Times article highlights. Read More