NC Budget and Tax Center, Poverty and Policy Matters

December 2017 local labor market release: A closer look at the Sandhills

Amid rosy data showing that 98 counties had unemployment levels lower in 2017 than in 2016 there is plenty of evidence that many North Carolinians are still hurting. Over the broader period since the start of the Great Recession, 57 counties still have fewer employed workers than at that time, and 27 counties have unemployment levels at least one percentage point above the state average. The pain felt in these communities, that are in many ways worse off now than they were before the Great Recession, prove that the tax cut only approach has failed much of North Carolina. We must focus on an economic strategy that supports a recovery for the unemployed and their families throughout all the state’s communities.

A closer look at the metropolitan and micropolitan places in the Sandhills, a region that includes Cumberland, Harnett, Hoke, Lee, Montgomery, Moore, Richmond, and Scotland counties, reveals some troubling spots. While micro areas like Sanford (4.9%), Dunn (5%) and Pinehurst-Southern Pines (4.5%) have relatively low unemployment rates, peer places like Laurinburg (8%), Lumberton (6.4%) and Rockingham (6.1%) fare much poorer. The metropolitan area Fayetteville, which serves as an economic engine for the Sandhills region, is hamstrung by an unemployment rate at 5.5%, higher than the state average at 4.4% in December 2017. For many bedroom communities such as Hoke, Scotland, Harnett and Lee, Fayetteville’s lack of a full recovery from the Great Recession could pose a drag to their economies as jobless workers hold back on spending and face challenges in paying bills, staying in their homes.

“Beaver Creek” Photo Credit: Gerry Dincher

Other highlights from this month’s labor market data include:

• Labor force shrinkage: Nearly 60 percent of all North Carolina counties have experienced a decrease in their labor force from 2016 and pre-recession levels. Duplin and Alleghany counties have seen their labor force diminish at the state’s highest rates year over year, – dropping 5.2% and 5.3% respectively. While there are several possible reasons for this decline, it is plausible that citizens are dropping out the search for work or out-migrating to other counties.

• East of I-95 metropolitan areas continue to lag behind the rest of the state. While improving, 6 out of the 7 metropolitan statistical areas east of Interstate 95 still featured unemployment rates higher than the state average for the entirety of 2017. For 12 consecutive months, Fayetteville, Goldsboro, Greenville, Jacksonville, New Bern and Rocky Mount experienced joblessness rates higher than other metropolitan areas throughout the state.

NC Budget and Tax Center, Poverty and Policy Matters

A community conversation about poverty and opportunity in Goldsboro

On Wednesday afternoon, January 17th Gene Nichol stood at a podium at the First African Baptist Church in Goldsboro, NC, cleared his throat and told an expectant community what it already knew, “that its city was uniquely gripped by poverty”.

What those 130 in attendance may not have completely grasped prior to this presentation was the contextualized nature of poverty and how this grip blocking the potential for everyone’s prosperity.

After 18 months of work in Goldsboro, Gene Nichol and Heather Hunt released a report titled “Goldsboro: Isolation and Marginalization in Eastern North Carolina” which not only highlighted statistically how poverty ravages the community, but gathered narratives from residents who experience it day to day.

With detail, after excruciating detail, Nichol’s talk illuminated the depths of poverty in this Eastern NC city.  Sometimes audible gasps from the audience followed revelations like the fact that more than half of African American children living in poverty or that the middle class in the city had declined some 12% from 2000 to 2014. These were the details that Nichol was able to share in the 30 minutes allotted for his talk, the report reveals much more.

Divided into five parts, the particularly revelatory sections were “People, Poverty and the Economy,” “Concentrated Poverty, Isolation and Crushing Hardship” and “The Centrality of Effective Education for All.”

People, Poverty and the Economy” paints the demographic picture of the city for the past 36 years and found that as the white population has dropped to 38% as the African American and Latinx populations rose to 51% and 6% respectively. The section also reveals the median household income as an indicator of the city’s economy compared to the state and Wayne County. The authors show that in 2016, North Carolina’s median household income was $48,256, Wayne County’s was $40,457 and Goldsboro’s was $32,148. Data reveals that the middle class in Goldsboro exposed a terrifying trend for the long-term prosperity of the city. As mentioned earlier, Nichol and Hunt reference research from Pew, that shows that from 2000 to 2014 the middle class shrunk 12% in Goldsboro. This represents a decline in the percentage of adults in the city in the middle class from 60% to 48%, while the lower income tier increased from 27% to 41%.  Using Census data, the authors explain that more than 46% of Goldsboro’s household earn less than $30,000 a year, 13% earn less than $10,000 annually. Nichol and Hunt argue that prosperity and poverty are intensely stratified by race. They present Census data that reveal that white families earn $20,000 more a year than black families, more than half of Black families earn less than $30,000, and while 13% of white families are poor, 34% of black families live in poverty.  Their data also show that forty percent of children in Goldsboro are growing up in poverty and that 50% or more of all Black children are growing in this circumstance. These data points only provide the tip of the iceberg as the authors use 25 measures of income and demography to assess the present and future economic condition of the city.

In the next section, “Concentrated Poverty, Isolation and Crushing Hardship” the authors turn to the words of the those living in or serving residents in the four census tracts with the highest concentrations of poverty to provide a more humanistic understanding of poverty’s consequences. Census tracts 14, 15, 18 and 19 each have poverty rates of 33%, 35%, 42% and 40% respectively.

Shirley Edwards, a retired mental health administrator, explained to the authors that the “poor who live there are separated off, segregated out. That breeds discontent and disconnection.” Nichol and Hunt discovered Tonya Robertson, who is a teaching assistant with six young children. Her marriage of fifteen years failed forcing her to live in one of the census tracts where poverty rates reach upwards of 40%. She described falling into poverty after being situated in the middle class as gut punch. The safety net intended to help her get back there is not working.  She states that where she lives gun shots are commonplace, day and night. Sadly, Tonya cannot afford to move because affordable housing is scarce. She has to work, and this retards her progress towards a degree in education that would qualify her to become a teacher. The authors recount that Tonya feels trapped in a situation deteriorating around her.

These stories are not the only ones. This section features eight such narratives from different perspectives, all illuminating the devastation that the weight of poverty has dealt the city and its people.

In “The Centrality of Effective Education for All” the report introduces the irony of Wayne County being the home of Charles B. Aycock, the education governor while at the same time being the white supremacist governor of North Carolina. Nichol and Hunt captured that this kind of duality has persisted and affects poor people’s access to education in Wayne County and Goldsboro from Shirley Edwards. She surmised that while the schools are present that quality education was never the goal or outcome for poor people in the county. “Entrenched poverty” were in her words the product of this purposeful policy.

This, of course, has tremendous implications for those who live in the city. Patricia Yates, former director of Literacy Connections of Wayne County, believes that the lack of literacy is just one of the outcomes of a school system that remains uncommitted to serving all. Yates argues that one in ten adults in Goldsboro is completely illiterate while 25% reads below a third-grade level and almost 60% read below a high school level. This by extension bounds a certain percentage of the population to life prospects that should not be acceptable for any community.

The authors of this report Gene Nichol and Heather Hunt provided a detailed analysis of the lived experience in Goldsboro and poverty through statistics and conversations. Such a complete assessment of a challenge afflicting people should and can inform solutions.

2018 Fiscal Year State Budget, NC Budget and Tax Center

How to make a program irrelevant: The N.C. Office for Historically Underutilized Businesses

If you want a program which “advocate(s) actions which increase opportunities for historically underutilized businesses and promotes diversity and inclusion in state government procurement and contracting” to not do its job, you do it quietly.

The Historically Underutilized Business (HUB) Office was established by Executive Order 150 in an effort to remedy past and ongoing discrimination in the procurement and contracting markets in North Carolina. After being codified in 2001, the initiative aimed to 1) increase the amount of goods and services acquired by state agencies from HUB firms, 2) make progress towards eliminating barriers that reduce participation of HUB firms, 3) encourage purchasing officers and relevant personnel to identify and utilize HUB vendors and contractors, 4) educate HUB firms on doing business with the State of North Carolina and 5) provide resources for HUB firms.

Since its inception, the program has experienced very modest success but has been plagued with persistent inequity. A study commissioned by NCDOT in 2014 found ample evidence that race and gender remain barriers to the full and fair opportunity to participate in NCDOT’s contracts. NCDOT’s study employed a ratio measure to determine how HUB enterprises were utilized relative to white-male owned enterprises, where ratios below 80 percent indicate a disparity. For every 100 contracts awarded to white-male owned businesses, white women got 79.87 contracts, Black-owned businesses received 49.94 contracts, and Hispanic-owned businesses got 18.25 contracts. Read more

NC Budget and Tax Center

Eastern NC is suffering

As North Carolina’s unemployment rate continues to decline, today’s local labor market data reveal an alarming trend for Eastern North Carolina. There are 20 counties in this region with unemployment rates at least a full percentage point higher than the state average (4.3%).

While North Carolina, particularly urban counties, are experiencing a gradual recovery, rural and eastern North Carolina is facing a much different reality. There are nine counties in the East that presently have higher unemployment than before the Great Recession. In December of 2007 total unemployed in these counties registered 12,721 while in April of this year it stood at 13,069.

Wilson County, NC

The epicenter of North Carolina’s recovery seems to run along interstates 40 and 85 but it has bypassed the 95 corridor of our state. In the wake of Hurricane Matthew, a robust state and federal investment oriented towards employing local residents and contracting with local businesses could go a long way to driving improvements in Eastern NC and for the state as a whole.

Beyond leveraging targeted investments to address the damage of Hurricane Matthew, it is clear that the state’s unemployment insurance system is failing counties with higher unemployment rates than the state average by tying the number of weeks to the state unemployment rate and not reflecting local labor market realities.

Highlights from this month’s labor market data include:

Persistent Unemployment in Eastern NC: Unemployment rates in Wilson, Tyrrell, Nash, Hoke Sampson, Halifax, Martin, Wayne and Washington counties remain above pre-Recession levels. Wilson County, for example, has almost 15 percent more unemployed residents than in December 2007. After nearly eight years of recovery, more than 13,000 residents in these counties are without jobs.

Disappearing labor forces: Further, Sampson, Wilson, Robeson, Northampton, Halifax, Martin, Richmond, Hyde, Scotland, Chowan, Washington and Tyrrell counties have all lost 10 percent or more of their labor forces since 2007. In particular, Tyrrell, Washington, Chowan, and Scotland have lost 31, 26, 22 and 19 percent of their labor forces respectively since before the recession.

-Cities in Eastern NC face serious challenges: Cities in Eastern NC such as Fayetteville, Goldsboro, and Wilmington have seen their unemployment rate either rise or remain flat since 2007. Wilmington and Goldsboro have seen their unemployment rates rise to 6 and 8 percent respectively. The disparity with North Carolina’s larger cities is disheartening as Charlotte and Winston-Salem saw declines in unemployed people of 6 and 12 percent respectively.

NC Budget and Tax Center

North Carolina’s productivity is slowing, lagging behind much of the South

Last week, the Bureau of Economic Analysis released the latest data on economic growth measured by the production of goods and services for all 50 states.  North Carolina’s annual growth rate of 1.6 percent ranked the state 19th in the country.  This was below other Southeastern states (1.8 percent) and slightly above the national average (1.5 percent).

North Carolina’s economic performance on this measure is falling short of its potential even in comparison to the South. Neighboring states of South Carolina and Tennessee outperformed the Old North State, as did Georgia.