Poverty and Policy Matters

This school year, approximately 56 percent of all students in North Carolina public schools come from families with incomes low enough to qualify for free and reduced lunch (up from 48 percent in 2008). Many students within this new majority require extra learning supports, as they lag their peers in core learning areas such as reading, math, and English.

The budget signed by Governor McCrory cuts funding in many areas that help boost student achievement. For the 2013-14 school year, these funding cuts have meant fewer classroom teachers, teacher assistants, instructional support, and instructional supplies. This raises concerns about what the failure to invest in public education means for future student performance. Read More

Low-income children now represent a majority of students enrolled in public schools in the South, a new report by the Southern Education Foundation (SEF) finds. The 2009-10 school year marked the first time in modern history that a majority of students in public schools in the South were low-income students, defined as the number of students participating in the federal free- and reduced-lunch program. As public schools in North Carolina and other southern states are challenged with educating more low-income students – who typically need extra learning support and resources to succeed – education spending has failed to reflect this growing need and challenge. Read More

Poverty continues to impact 1 in 5 North Carolinians, according to 2012 Census Bureau Data released last week. The extent of poverty would be far greater without the safety net and work supports, however. This post is part of a blog series that will explain how the new poverty data demonstrates the important role public programs play and the need for continued support. Read the other posts in this series on SNAP, Social Security, Unemployment Insurance and the EITC.

Work First, North Carolina’s TANF program, was created to assist extremely low-income families in becoming economically self-sufficient through basic services, a small cash grant, and short-term training.  But despite soaring unemployment rates and persistently high poverty levels in the state, the Work First case load has been declining in North Carolina.

In good economic times, a declining TANF caseload could indicate greater economic well-being. That is, fewer cases could indicate fewer families are in deep poverty and therefore ineligible for or not enrolled in a program like TANF-Work First. But with unemployment rates hovering just under 9 percent and one in five North Carolinians living in poverty, declining TANF-Work First caseloads point to the program’s limited role in building economic security.

Temporary Assistance for Needy Families (TANF) was created by Congress in 1996 to replace Aid to Families with Dependent children and “end welfare as we know it.” Those eligible for Work First are still very much in need of assistance. Families must earn less than 19.6 percent to 37.8 percent of the federal poverty level, depending on family size, in order to be eligible. Read More

Poverty continues to impact 1 in 5 North Carolinians, according to 2012 Census Bureau Data released last week. The extent of poverty would be far greater without the safety net and work supports, however. This post is part of a blog series that will explain how the new poverty data demonstrates the important role public programs play and the need for continued support. See our posts on the Supplemental Nutrition Assistance Program, Social Security, and Unemployment Insurance.

Despite economic growth from 2011 to 2012, North Carolina saw no meaningful improvement in either poverty rates or household incomes over the same period. New US Census data shows that safety-net programs, such as the Earned Income Tax Credit (EITC), blunted the extent of poverty’s reach across the United States. If not for the federal EITC, an additional 5.5 million Americans—including 2.9 million children—would have lived in poverty last year.

The EITC goes to families that work but struggle to get by on low wages. It helps them pay for basic necessities, reduces child poverty more than any other program, and improves kids’ chances of success as adults. The tax credit’s anti-poverty effect is not yet available for North Carolina or other states but we do know that it lifted approximately 293,400 North Carolinians—half of whom were children—out of poverty during the 2009-2011 period.

We also know that state EITCs build on the success at the federal credit. Yet, state lawmakers enacted a tax plan that allows North Carolina’s EITC to expire at the end of 2013. Read More

Poverty continues to impact 1 in 5 North Carolinians, according to 2012 Census Bureau Data released last week. The extent of poverty would be far greater without the safety net and work supports, however. This post is part of a blog series that will explain how the new poverty data demonstrates the important role public programs play and the need for continued support. See our posts on the Supplemental Nutrition Assistance Program and Social Security.

The failure of the official recovery to create jobs and especially jobs that pay above poverty wages is driving persistently high poverty rates.  The latest Census data confirm that North Carolina’s high unemployment rate and persistent job deficit is driving significant hardship.

As jobless workers continue to outnumber job openings by nearly 3 to 1, unemployment insurance plays a critical role in minimizing the downward spiral of massive job losses in an economy.  In 2012, the latest Census data finds that unemployment insurance lifted 1.7 million people out of poverty.

While impressive, as is clear from this graph by the Center on Budget and Policy Priorities, the anti-poverty power of unemployment insurance is eroding.

CBPP_Unemployment Over Time

In part, this erosion is due to jobless workers finding jobs.  But an equally important explanation is the decline in the number of jobless workers who receive unemployment insurance benefits.  The number of jobless workers who receive no state or federal unemployment insurance is now higher than at the bottom of the recession.

And that picture is only likely to worsen in the coming year.  Congress had already reduced the number of weeks of federal UI benefits for the long-term unemployed in 2012. But in 2013 North Carolina’s General Assembly rejected any additional weeks paid for by the federal government.  That is likely to result in an estimated 170,000 North Carolinians losing unemployment insurance benefits in 2013.  In addition, significant state-level changes to unemployment insurance benefits were made that will further reduce access, amounts and duration of unemployment insurance, impacting North Carolina’s jobless workers  and local communities.

The intent of unemployment insurance to protect the economy from the shock of massive job losses has been undermined.  With it, many more North Carolinians are likely to experience economic hardship and the strength of the state’s economic recovery will continue to flag.