[Editor’s note: This essay is part of a blog series that is providing detailed look at the recently released 2013 U.S. Census poverty data].
Number of people living in poverty remains high; income growth has not been widely shared
Poverty remained high in North Carolina last year, according to new Census Bureau data released last week. The new data highlight that many people have not benefited 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, which translates to an income of less than $24,000 per 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 economic recovery from the Great Recession officially 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. (As an important an aside, it should also be pointed out that hundreds of thousands of North Carolinians whose incomes place them above the official poverty line still do not, as a practical matter, bring home a “living income.”)
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 show that progress towards eliminating poverty in the state is stuck:
- North Carolina’s poverty rate is 2.1 percentage points higher than the U.S. poverty rate, and is the 11th highest rate in the nation.
- The state’s poverty rate (17.9 percent) and median income ($45,906) remained statistically unchanged, meaning there has been no progress in fighting poverty or raising middle class living standards for the average North Carolinian since 2009.
- Nearly 8 percent of North Carolinians live in extreme poverty, which means they live on incomes that are less than half of the official poverty line—or about $12,000 a year for a family of four.
- Children continue to have the highest poverty rate (25.2 percent) compared to other age groups. One in four children lives in poverty compared to 1 in 10 older adults.
- People of color are much more likely to struggle below the poverty line. 32.5 percent of Latinos, 28 percent of African Americans, and 28.9 of American Indians lived in poverty in 2013 while 12.3 percent of non-Hispanic whites live in poverty.
- Women face higher poverty rates than men, 19.3 percent compared to 16.4 percent, respectively.
To make our state a better place to live and compete in today’s global economy, we need to invest in people and communities. Making it just a little easier for people to increase their earnings not only helps families struggling to pay the bills but also makes our economy stronger for all of us. Yet, North Carolina’s progress is hampered by too few jobs, a boom in low-wage work, and the 2013 tax plan—which is draining the resources needed to put North Carolina on a path to success.
Cutting investments in people and communities is not the way to boost our economy and create a better future. We should take this opportunity to put our state on a better path by stopping the next round of tax cuts that primarily benefit the wealthy and use those resources to invest in strategies that will build a larger middle class by helping people move up and out of poverty.
Tazra Mitchell is a Policy Analyst at the North Carolina Budget and Tax Center.