Category: Poverty and Policy Matters

ASSET POVERTY IN NC: AN IMPORTANT DIMENSION OF HOUSEHOLD ECONOMIC SECURITY

April 5, 2012 at 10:16 amCategory:NC Budget and Tax Center | Poverty and Policy Matters | Uncategorized

by

Economic security throughout the life course is linked to income and asset ownership. Households that are poor or low-income have a hard time building assets and, as a result, face a significant barrier to long-term financial stability. According to a recent report by the Corporation for Enterprise Development (CFED), asset poverty is on the rise in North Carolina.

More than 1 in 4 households in the state are “asset poor,” meaning they do not have adequate resources to keep them out of poverty for three months in case of a layoff, a reduction in hourly wages, or an emergency. Nearly 1 in 2 households are “liquid asset poor,” meaning they do not have immediate access to savings. Even more unsettling, the share of asset-poor households is much higher for households of color.

Asset poverty is distinct from the traditional federal poverty threshold—which was $22,314 for a family of four in 2010—as it measures a household’s financial vulnerability as well as the ability to access opportunities requiring significant upfront investments

What qualifies as an asset or a liquid asset? If you listened to Fergus Hodgson, the Director of Fiscal Studies at the John Locke Foundation, on Carolina Journal Radio (audio is included below), you may believe that household appliances are assets.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Read More…

Children’s Opportunities are Deeply Connected to the Neighborhoods they Live in

March 17, 2012 at 11:24 amCategory:NC Budget and Tax Center | Poverty and Policy Matters | Uncategorized

by

Well above the state poverty rate of 17.5 percent, an astounding 1 in 4 of North Carolina’s children live in poverty. Beyond the significance for a child living in a household with too few dollars to meet the most basic needs (to be poor a family of four must have an annual income below $23,314 in 2010), there are longer term implications of a childhood of hardship. Research shows that childhood poverty for the youngest children is literally built into the architecture of their developing brains with implications for their chances at educational success and attachment to the labor force. All of these play out negatively for children who are poor well into their adult years.

But what about children who are poor and live in distressed communities? Research shows they face compounding barriers to long-term economic security due to often having less access to quality educational opportunities and strong social networks. A report released by the Budget and Tax Center last Thursday found that 10.4 percent of North Carolina’s impoverished children lived in one of the state’s 100 concentrated-poverty neighborhoods—which are neighborhoods with a poverty rate of 40 percent or higher—in 2006-2010. This rate was slightly higher than the state’s concentrated-poverty rate of 10.2 percent.   Read More…

Disparities in Poverty Persist and Grow

September 29, 2011 at 2:07 pmCategory:Poverty and Policy Matters

by

A North Carolina Budget and Tax Center (BTC) brief released last week showed that families in North Carolina are severely feeling the effects of the flagging economy. African American and Latino families in the state, however, have been particularly hard hit.

While the poverty rate for the state increased significantly to 17.5 percent in 2010, the poverty rate for African American North Carolinians was more than ten percentage points higher than the state figure and the rate for Hispanic or Latino North Carolinians stood at 33.9 percent. That translates to 1 in 4 African Americans and 1 in 3 Latinos in the state who are living under the federal poverty level.

Source: U.S. Census Bureau, American Community Survey, 2007 and 2010

Read More…

Measuring Economic Hardship

September 28, 2011 at 5:23 pmCategory:Poverty and Policy Matters | Uncategorized

by

The release of the Census Bureau data each year brings attention to a particular measure of economic hardship–the official or federal poverty line.  And while it is certainly staggering that more than 17 percent of North Carolinians are earning less than $22,314 for a family of four, and more than 728,000 North Carolinians had half that income in 2010, there is a general consensus that the poverty line does not capture the full scope of economic hardship. Thus, the number of folks facing challenges in getting by is likely much greater.

The Federal Poverty Level (FPL) was designed in the 1960s to determine the minimum income necessary for a family to survive, not to be economically secure. Most notably, the FPL is based only on the cost of food and assumes that cost accounts for one-third of family expenses, ignores expenses that are significant today but were not common in 1960, like child care, was designed to measure after-tax income but today is applied to pre-tax income, thereby inaccurately portraying the amount of money a family actually has available to spend. It also is the same across the nation and does not take into account cost-of-living variations. Read More…

What about the kids?

September 27, 2011 at 2:16 pmCategory:Poverty and Policy Matters

by

Last week’s BTC brief discussing the recently released American Community Survey 2010 poverty data noted that child poverty in North Carolina rose from 19.2 percent in 2007 to 24.6 percent in 2010. Essentially this means that since the beginning of the Great Recession, the share of North Carolina’s children in poverty has gone from 1 in 5 children to 1 in 4 children.

Read More…