NC Budget and Tax Center, Poverty and Income Data 2013

Recoveries are increasingly slow to bring down poverty rates

The connection between economic recoveries and declining economic hardship is often assumed and yet it is no longer necessarily the case in reality. While poverty rates have traditionally moved in tandem with economic variables that often signal an economic recovery—job creation, declines in unemployment rates and adequate investments in anti-poverty strategies—the recoveries from the most recent downturns have not reduced poverty quickly and significantly.

Data from the country as a whole analyzed by the Center on Budget and Policy Priorities provides even greater historical context for the national picture showing that poverty rates fell within one to two years from the start of official national economic recoveries in the 1960s and 1970s. In more recent recoveries, it has taken four to five years for the poverty rate to fall. The data released last week showed the first statistically significant decline in the poverty rate for the country four years into the current recovery.

At Prosperity Watch this week, we documented the trends in North Carolina regarding recoveries and poverty rates. In the 2000s, the poverty rate failed to fall despite the official recovery that began in 2001 before the onset of the Great Recession. The recovery that began in 2009 has yet to significantly bring down the state’s poverty rate which last week we learned remained at 17.9 percent.

The disconnect between economic expansions and declining poverty is further evidence of a broken economic model in which the benefits of growth are not broadly shared. It is a clarion call for public policies to bind together once again improved economic performance and greater economic security.

This is the fifth post in a series that takes a detailed look at the 2013 US Census Bureau poverty data released on September 18th. The first post looked at how North Carolina is faring overall. The second post looked at how poverty varies by race, and the third post compared poverty by counties in North Carolina. The fourth post looked at child poverty. Read the entire series here.

NC Budget and Tax Center, Poverty and Income Data 2013, Poverty and Policy Matters

One in four: North Carolina’s child poverty rate remains the highest among all age groups

Children face the highest poverty rate in North Carolina compared to other age groups according to data released last week by the US Census Bureau. After more than five years into an economic recovery, one in four children (25.2%) in North Carolina remained in poverty in 2013 –unchanged from 2012 and higher than the national child poverty rate (22%). At a time when we are experiencing an economic recovery, it is troubling that our state’s child poverty rate is not declining and remains significantly higher than the national average.

The numbers become even more meaningful when considering the disadvantages children in poverty face: less access to early education programs and high quality schools, food insecurity, higher stress levels and higher dropout rates, among other risk factors. Recent findings in brain development research also warn of the impact of toxic stress associated with poverty on a young child’s developing brain. Toxic stress can weaken the architecture of a child’s brain, creating long-term challenges that make it hard for one to be economically secure as an adult. Other numbers are rising for children across the nation and in North Carolina that we certainly don’t want to see on the rise. Infant mortality and child mortality has increased in North Carolina. There has also been a rise in the number of homeless school children, according to recently released national data. Both are indicators of poverty’s tight grasp on America’s and North Carolina’s children.

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NC Budget and Tax Center, Poverty and Income Data 2013

North Carolina’s counties remain in poverty’s tight grip

North Carolina is enduring a painfully slow economic recovery. There are too few jobs open for all of the people looking for work, and the majority of the new jobs available pay wages so low that families can’t make ends meet. The ongoing economic hardship is evidenced in new data released last week by the Census Bureau. Statewide, the poverty rate held steady at 17.9 percent in 2013, with more than 1.7 million North Carolinians living on incomes below the federal poverty level. That’s about $24,000 annually for a family of four—certainly not enough to pay all the bills, much less get ahead.

However, just looking at statewide averages can mask the concentrations of hardship in particular geographic communities. A large and growing body of research shows that where one lives can determine if one has access to the educational and employment networks that can pave a pathway to the middle class. Because place is deeply connected to the opportunity structure, it important to analyze county-level (as well as neighborhood-level) variances in poverty.

Of the 40 counties in North Carolina for which 2013 data is available, 15 are urban and 25 are rural (based on population size).* Nine of the ten counties with the highest poverty rates were rural counties, which continue to face job loss and struggle with the consequences of the exodus of manufacturing jobs. The highest county-level poverty rate was in Robeson County, where nearly 1 in 3 residents lived in poverty. In fact, Robeson County consistently ranks as the poorest county in the state and as one of the poorest in the nation. Read more

NC Budget and Tax Center, Poverty and Income Data 2013

Poverty remains high across all racial groups, highest among communities of color

Yesterday, the US Census Bureau reported that in 2013 more than 1.7 million North Carolinians lived in poverty, meaning they found it difficult to afford the basics, such as decent housing, nutritious food, and reliable child care. That’s more people than the populations of Asheville, Charlotte, Greensboro, Raleigh, and Wilmington combined. While poverty remains high across all racial groups in North Carolina and throughout the nation compared to pre-recession levels, communities of color continue to face the highest levels of economic hardship.

The federal poverty level is less than $24,000 a year for a family of four. It is less than half of the income required to be economically secure.

The number of non-Hispanic whites living in poverty is greater than any other group in North Carolina. At the same time, some communities of color are much more likely to live on the brink, earning an income that puts them below the federal poverty line. In 2013, 32.5 percent of Latinos, 28.9 percent of American Indians, and 28 percent of African Americans lived in poverty compared to 14.4 percent for Asians and 12.3 percent of non-Hispanic whites (see chart below). Poverty has grown for all groups since the recession, with Hispanics and African Americans experiencing the biggest jumps in economic hardship. Read more

NC Budget and Tax Center, Poverty and Income Data 2013

Number of North Carolinians living in poverty remains high, income growth not widely shared

Poverty remained high in North Carolina last year, according to new Census Bureau data released today. The new data highlights that many people have not benefitted from the state’s weak economic recovery and that North Carolina must do more to help struggling people afford basics like decent housing, nutritious food, and reliable child care, and transportation.

One in five North Carolinians lived in poverty in 2013, equating less than $24,000 a year for a family of four. The median annual income in North Carolina adjusted for inflation did not rise between 2012 and 2013 and is lower now compared to 2009 when the official economic recovery began. Yet other sources show that incomes at the top have grown and the gaps between the top and bottom and top and middle have widened.

North Carolina lawmakers have yet to rebuild what was lost during the recession. Throughout the economic recovery, they have either made deep cuts to or provided inadequate investments for early childhood development, public schools, the UNC System, and nonprofits promoting job and business development in the state’s economically distressed areas. These are key services that invest in people’s future and build a strong economy that offers all families the opportunity to thrive. Lawmakers have also dismantled services that help people get back on their feet when they are struggling, including unemployment benefits, job training programs, and the Earned Income Tax Credit that makes work pay and helps parents avoid raising their children in poverty.

The new Census data shows that progress towards eliminating poverty in the state is stuck: Read more