NC Budget and Tax Center

Rates of deep poverty are rising in NC and and across the nation

Just over seven percent of North Carolina households live in deep poverty, according to the 2015 American Community Survey. Deep poverty is defined as households living with incomes at or below 50 percent of the Federal Poverty Level, or less than $12,300 per year for a family of four. This amounts to a little more than $8 per person per day to survive on. Watauga County and Scotland County experience the highest rates of deep poverty in North Carolina, where nearly a fifth of households live in deep poverty. However, these numbers are likely an inadequate representation of the actual need because income is substantially underreported in the survey.

Since 1996 and the Personal Responsibility and Work Opportunity Reconciliation Act, also known as “welfare reform,” the nation has seen a rise in the number of families living in deep poverty. This trend can largely be attributed to the disappearance of cash-based benefits to families with low incomes such as Aid to Families with Dependent Children and the state Earned Income Tax Credit. As a result, a stable source of cash flow has become virtually nonexistent for those living in deep poverty, and many households live off less than $2 per person per day. Children are typically hit the hardest by poverty. In North Carolina 1 in 5 children live in households with incomes below the Federal Poverty Line. Children of color are more than twice as likely to live in poverty than white children.

Families living in deep poverty survive off of support from the Supplemental Nutrition Assistance Program (SNAP) and the informal economy. While cash assistance programs, such as Temporary Aid to Needy Families (TANF) are available, they are not adequate to meet the need of those living in extreme poverty and many families to do not apply because they do not think they will meet the program’s eligibility guidelines. In 2015, only seven percent of North Carolina families in poverty received TANF, falling far below the national average of 23 percent.

NC Budget and Tax Center

What should be in tonight’s State of the Union speech

A lot of media outlets are speculating on what President Trump will likely talk about in his State of the Union address tonight as he lays out his agenda for the coming year.

Here are some of the things that President Trump should be emphasizing in his remarks, given the ongoing challenges our country faces in creating good, quality jobs for everyone, building inclusive and thriving communities everywhere, and ensuring that everyone — no matter where they live or who they are — can secure a better future for themselves and their family.

There may be a long way for our country to go to achieve these goals, but we know what works — and what doesn’t — to build a more perfect union.

Invest in our communities and our people. We already have the tools to build an economic recovery that is inclusive and addresses inequalities in North Carolina, leading to a stronger economy for the whole state and a higher quality of life for us all. Our leaders need to prioritize investing in our communities and our people, rather than giving handouts to the wealthy and profitable corporations. That means committing to ensure that every person can put food on the table and a roof over their head. That every child can have the early childhood experiences that get them ready for Kindergarten and educational experiences that lay the foundation and enthusiasm for lifelong learning. That every community has the infrastructure and tools to create opportunities.

Create good jobs that pay a living wage for all Americans. This should be a top priority for any president, but it is especially important when job growth is stalling and income gaps continue to grow. The latest numbers show that job growth fell in North Carolina and the United States last year, and we’re still not even back to where we were before the Great Recession. In fact, this is the slowest recovery in a generation. It gets even worse when you realize that most of the positive job growth in North Carolina was concentrated in the metro areas – many of our rural counties experienced a loss of jobs last year. Not to mention that the unemployment rate for Black workers is still 2.3 times higher than that for white workers in North Carolina. We need to do more to address the structural barriers to employment for workers of color, such as geographic distance to jobs, discrimination in hiring, and the lack of affordable job training in growing industries.

It’s been 10 years since the Great Recession, and the barriers to prosperity remain for many of North Carolinians. We’ve seen that much of the income growth was concentrated at the top in North Carolina last year – while the bottom 30 percent of North Carolinians have actually seen their wages fall on average. We also continue to see a wage disparity for women, especially women of color. While women overall receive 86 cents for every dollar their male counterparts make, Black women make only 64 cents and Latina women receive only 48 cents on the dollar.

Build inclusive, thriving communities.  Where someone is born shouldn’t determine what is possible in their lifetimes. Yet, for too many Americans, economic mobility is limited by existing barriers. Rather than build more barriers (and walls), it is time for American leadership to recognize the ways that our past has created many barriers for people of color and recognize that the path forward is not to erect more, but to tear down the ones that persist.

Education, NC Budget and Tax Center

Does the state superintendent even know any teachers?

On Thursday last week Mark Johnson, N.C. Superintendent, commented that $35,000 is “good money” for young teachers.

According to the Living Income Standard, a measure that calculates the minimum amount a family needs to make ends meet, an adult with one child needs just over $35,710 a year to scrape by. That means no vacation, no extracurriculars, no eating out — only the basics. Add the potential responsibilities of an aging parent or a broken down car and it’s quite possible that many teachers may not be able to make ends meet on their teaching salaries alone.

Another major oversight on Johnson’s behalf?

The more than $3.1 trillion in crippling students debt today’s graduates bear. From 2004 to 2014, the average debt held by college graduates in North Carolina rose from $16,863 to more than $25,000. While college tuition and student debt rose, the North Carolina General Assembly ended the popular NC Teaching Fellows Program in 2011, which incentivized good teachers to remain in NC by forgiving student loans for those who committed to teach in the state. Although the state will bring back the program in the next school year, the program will only be available at five schools, none of which are Historically Black Colleges or Universities (HBCU), an issue which has been highlighted by those concerned with the diversity of North Carolina’s teaching pool.

While Johnson’s comments about “good money” were likely accurate for whom he envisioned as a “young” recent college graduate, it is far from reality for many.

This former teacher and husband of an educator knows just how hard teachers in North Carolina work. Going in early, staying late, talking students through homework help over the weekend, attending schools events in the evening, and paying for school supplies out of their own pocket is all something they commit to but are not paid for.

North Carolinian teachers — who work hard and are care takers, who have debt — deserve jobs that pay a real, living wage and a state superintendent who understands what that means.

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.

NC Budget and Tax Center

The possibility of a government shutdown was avoidable

For those of us digging out of the snow still, it may be surprising to learn that our country is facing a federal shutdown that could begin tomorrow based on the lack of progress on a long-term deal to fund programs and services, to ensure children have health care, and to make sure young adults have pathways to education and jobs no matter where they come from.

To avoid a shutdown, the House in Congress voted yesterday to approve legislation that would keep agency doors open and hundreds of thousands of federal employees at work through Feb. 16. It is now up to the Senate to decide today whether it will take the House bill and approve another short-term continuing resolution (CR) to avoid a federal shutdown.

Where we are now is not inevitable. It is the result of a failure to put together long-term plans for funding government and the preference for tax cuts that have grown the deficit.  Despite broad public support and bipartisan agreement that we should fund children’s health insurance and fix the temporary protections for immigrants who arrived in this country as children, these two issues are now caught up in this short-sighted deal-making. Read more