2017 Poverty Report: How North Carolina Should Be Taking Advantage of the Recovery

Seven years into the economic recovery, the poverty rate in North Carolina still remains well above historical averages. While the economic recovery is evident for some, it is falling short of expectations for our state’s economic performance. That performance should be measured by how many North Carolinians struggle each year to avoid hardship and how many North Carolinians have incomes so low that they are faced with impossible choices to pay for the growing cost for the basics. It is clear that every household and the economy are being held back when North Carolina doesn’t address these numbers.

Even though our state is experiencing economic growth as measured by more jobs and increased productivity, far too many North Carolinians are being left behind. In 2016, more than 1.5 million North Carolinians faced serious barriers in just paying for the basics such as food, rent, and transportation. Poverty, which means living on less than $24,600 a year for a family of four, touches individuals in every part of our state and every walk of life. And while last year marked the first year we saw the income of the households in the middle of the distribution (the median) rise above 2009 levels, the typical worker still makes $1,130 less annually than they did before the recession, after adjusting for inflation.

For three consecutive years now, the state’s poverty rate has fallen. But its persistently elevated level and our state’s lack of progress compared to other states is troubling. The poverty rate still remains 1.1 percentage points higher than before the recession began.

North Carolina is not just experiencing a slow recovery; we are living in an economy that is simply unable to recover. In the past, economic growth that followed downturns resulted in lower poverty rates. Following the recessions in the early 1980’s and 1990’s, the poverty rates declined steadily, eventually returning to pre-recession levels or below. The recovery following the 2007 Great Recession broke this pattern. Over the past 20 years, policies and decisions have changed the way people experience economic recoveries. This time, North Carolina’s poverty rate has failed to return to normal levels.

In addition to policies and choices that have affected North Carolinians in every corner of the state, we have also failed to address the systemic barriers that drive racial and gender disparities in the experience of poverty.

Key Findings

►► Poverty in North Carolina is still higher than pre-recession levels. The state’s poverty rate was 15.4 percent in 2016, down from 16.4 percent in 2015.

►► North Carolina has higher rates of poverty, deep poverty, and child poverty than the majority of states. The state’s poverty rate, child poverty rate, and deep poverty rate rank 13th, 17th, and 15th highest in the nation, respectively.

►► Race and gender play significant roles in poverty. Communities of color, women, and children are more likely to face economic hardship than white people, men, and older adults.

►► Poverty’s reach varies considerably across the state, revealing a stark rural-urban divide. Out of the state’s 100 counties in 2014, the 20 highest county-level poverty rates were all in rural counties.

►► More North Carolinians live in areas of concentrated poverty. The state’s metropolitan areas are experiencing some of the largest growths in the number of people living in high-poverty neighborhoods.

►► North Carolina’s high poverty rates are the results of poor policy decisions. Most North Carolinianans are not experiencing the positive effects of the economic recovery. Tax cuts that benefit the wealthy and decreasing public investments are keeping our economy from working for everyone.
North Carolina has the tools to address these problems.

Building an economic recovery that is inclusive and that addresses systemic inequality should be a priority for lawmakers, not the afterthought it is today. Addressing poverty is demonstrated to generate strong economic performance for the whole state in the form of productivity growth and increased economic activity. Addressing poverty is the pathway to a higher quality of life for us all.