Poverty in North Carolina

NC Institute of Medicine Prevention Summit

Greensboro, NC

October 8, 2009

Louisa Warren, NC Justice Center

Who We Are

The North Carolina Justice Center is the state’s leading progressive advocacy and research organization. Our mission is to end poverty in North Carolina by working to ensure that every household has access to the resources, services and fair treatment it needs to achieve economic security.

The Justice Center works to improve the lives of low- and moderate-income North Carolinians through five main strategies:

• Litigation

• Research & Analysis

• Advocacy

• Community Education

• Communications

Our Work

The Justice Center is home to a number of well-known specialized projects, including the:

• NC Budget & Tax Center

• NC Health Access Coalition

• Immigrants Legal Assistance Project

• Poverty Law Litigation Project

• NC Education & Law Project

Learn more at: www.ncjustice.org

Presentation Overview

• Snapshot of Poverty, Income, and Health Insurance stats in NC

• Who’s poor and how are we defining it

• Barriers that are keeping people in poverty

• Proven policies to alleviate poverty

Poverty in NC: 2008

Total Poverty

NC: 14.6% (16th highest) (up from 13.1% in 2000)

US: 13.2%

Child Poverty

NC: 19.5% (16th highest) (up from 18.1% in 2000)

US: 17.8%

Family Poverty

NC: 10.9% (up from 9.6% in 2000)

US: 9.7%

Change in Poverty Rates: 2000-2008

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008

Facts about working poor families

49.1% of poor families work; of those families:

• 62% have at least one minority parent

• 32% own their own homes

• 34% have at least one parent without a HS degree or GED

• 59% have no parent with postsecondary education

Median Household Income: 2008

National = $52,029

North Carolina = $46,549

•$692 less than the 2000 median of $47,241

•$5,480 below the national median income

• NC ranks 39th in median income: Georgia, Florida, and Virginia have higher median incomes

• Of the 37 NC counties for which there is local data, Wake County highest at $65,180 and Wilkes County lowest $29,705

Health & Housing Indicators

Health Insurance Coverage:

2007/2008: 15.9% (1 in 6) of North Carolinians were uninsured

2000/2001: 13.4%

NC Institute of Medicine estimates that the number of uninsured has increased by 140,000 in 2009

Access to Housing:

37.7% of renter-occupied households in NC paid more than 35% of their incomes in rent

Defining who’s poor

• Standard measure is Federal Poverty Level (FPL):

–$22,050: Four-person family in 2009

• We use an alternative—the Living Income Standard (LIS): an estimate of how much income families with children need to pay market prices for a bundle of basic goods and services

• Advantages of the LIS include: its reliance upon actual cost data, geographic specificity, and inclusion of goods and services (such as childcare, transportation) in calculation that FPL does not

• NC LIS (statewide average) = $41,184 for family of four (2008)

LIS Family Budgets

Monthly Budgets for a Four-Person Family, Triangle Area Counties, 2008

$785 $785 $579 $785$551 $520

$468 $468$468

$468$468 $468

$812

$649 $649

$649

$649

$649 $649

$309 $309

$411

$309

$309 $411

$338 $338

$283

$338

$275 $267

$404 $421

$336

$450

$307 $320

$809$1,050$968$812

$1,191

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Chatham Durham Granville Orange Person Vance

Mo

nth

ly L

IS

Housing Food Childcare Health Care Transportation Other Necessities Taxes

Federal Poverty Level

Why are people poor and struggling to make ends meet?

Most families below the LIS work

• Typical family holds the equivalent of 1.2 full-time jobs

Big Issue is a disconnect between work and wages

• 24% of working adults earn less than $9.12/ hour

• Low-wage jobs less likely to offer benefits and mobility

• Erosion of workplace benefits (health care, pensions)

Low wages mean less access to quality housing, child care, transportation to jobs

Bridging the Gap

• Work supports play a critical role in boosting incomes of low-income families

• Expanding access to basics as housing, child care, food, and good jobs is key

• Short-term: policies that boost incomes and ensure basic needs are met

• Long-term: improving job quality and expanding supply of skilled workers

NC’s Hardship Gap before and after work supports

$665

$1,377

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600

After work supports

Median monthlyhardship gap

Strategies to Boost Incomes

• Increasing State Earned Income Tax Credit

• Strengthening Wages: increasing minimum wage and indexing to inflation

• Expanding critical work supports and core services:

–Child care subsidies

–Children’s health insurance/Medicaid

–Food stamps

–Unemployment insurance

Expanding Access to Affordable Housing

• More than 600,000 low-income N.C. households pay more than 30% of their income on housing.

• At least another 150,000 N.C. households live in housing that is in serious disrepair or is overcrowded.

• 20,000 N.C. homes still lack indoor plumbing.

• Lack of access to basic public services and affordable utilities is a huge problem in many communities – particularly low income communities.

• Need more investments in NC Housing Trust Fund

• Examine feasibility of new policies to aid low-income utility consumers and promote access to services (e.g. expanded shut-off protections, rate discounts for low-income customers, and annexation reform).

Workforce Development

Growing gap between supply and demand of skilled workers

• 48% of NC adults have no more than a H.S. diploma

Gap between labor market realities and educational policies

• Most innovative efforts are focused on children, not adults

– 2/3 of the 2020 workforce already is working, as is 45% of 2030 workforce

• Higher education policy dominated by university issues

Need a better focus on the educational needs of adults

• Reforms to need-based financial aid policies

• Programmatic efforts to link training with labor market payoffs

• More emphasis on basic adult education

Contact Information

Louisa Warren

Policy Advocate

NC Justice Center

Ph: (919) 856-2183

Email: louisa@ncjustice.org

www.ncjustice.org