North Carolina Continues to Recover From the Great Recession a Decade Later

12/11/18

By Samantha Schisler, NC Biz News

North Carolina continues to recover from the 2007 Great Recession as the poverty level and the rate of children living at or below the federal poverty level remain some of the worst in the nation.

Poverty in the state rests 1.4 percent higher than the national average with a 5.6 percent increase in children living at or below the federal poverty level from 2000 to 2016. Overall in 2016, the national average for the poverty rate was at 14 percent. In 2016, that was $24,858 for a family of four.

The 2007 Great Recession brought hardships to North Carolina, which has experienced a slow recovery. Some even say the state is in an economy that is simply unable to recover.

“Following the recessions in the early 1980s and 1990s, the poverty rates declined steadily, eventually returning to pre-recession levels or below,” according to the North Carolina Justice Center 2017 Poverty Report. “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, N.C.’s poverty rate has failed to return to normal levels.”

Addressing poverty is demonstrated to generate strong economic performance for the whole state in the form of increased economic activity.

North Carolina hit a high in 2012 with the poverty rate at 18 percent. While today the state remains below that number, at 15.4 percent in 2016, poverty in the state still stands higher than pre-recession levels. The state’s poverty rate and deep poverty rate were the 13th highest in the nation for 2016.

In 2016, N.C.’s average poverty rate saw a 3.7 percent increase from 2000. Additionally, nearly 659,000 of the state’s population lived in deep poverty, meaning they earned half or less of the annual poverty-level income for their family size, according to the North Carolina Justice Center Poverty Report.

The poverty rate grew the most in areas of the state that reported having between one-third to two-thirds rural areas in the county. In these areas, the rate of children living at or below the federal poverty level increased by 7.1 percent while in areas more than two-thirds rural the rate increased by 7.3 percent.

In contrast to an increase in both the poverty and child poverty rates, a large population of the state has seen an increase in their labor force growth. Overall the labor force in N.C. has increased by 17.3 percent from 2000 with the largest growth in counties that are less than one-third rural.

Counties in North Carolina that are less than one-third rural are places such as Mecklenburg County — home to Charlotte — that saw a labor force growth of 47.4 percent from 2000 to 2016. This is the second largest percentage growth in the state behind Wake County’s labor growth of 52.1 percent.

“You can tell the labor force is growing by the influx of Charlotte residents,” said former Charlotte resident Kate Carrington. “This can be shown by looking at the growing number of apartment buildings under construction in and around the area.”

Mecklenburg County holds a population of around 860,000. Additionally, Wake County, which contains the state’s capital Raleigh, has a population of around 465,000.

In 2017, Charlotte had the fourth-fastest job growth in the U.S., according to a study from Headlight Data.

“The rapid growth in jobs offers some explanation for why so many apartments, office buildings and other developments are under construction around the city,” according to an article by the Charlotte Observer.

Today, the state is seeing that some of its population 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. Although the labor force has grown in these areas, poverty still seems to be a widespread issue throughout the state whether in urban or rural locations.

Scotland County, which is between one-third to two-thirds, or 48.4 percent, rural, saw labor force growth decreased by 25.9 percent from 2000 to 2016. At the end of 2017, the county had the highest unemployment rate throughout the state. The county sits at the North Carolina, South Carolina border and is located about two hours from Mecklenburg County.

Additionally, the county has a rate of 38.7 percent for children living at or below the federal poverty level and an overall poverty rate of 27.6 percent for 2016.

Counties with a large decrease in the labor force also have similar trends.

Pamlico County is one of the few counties in the state that counts as 100 percent rural. Other counties include Cherokee, Jones and Alleghany.

“I have driven through Pamlico County a countless number of times,” said Pitt County resident Linden Stokes. “While you might not notice it there are a lot of ‘one street towns’ in the area. I personally wouldn’t consider it an impoverished county just an extremely rural area; there is almost nothing there.”

These statistics show the large role poverty plays in North Carolina. While counties either increased or decreased in its labor force growth, all except one county increased its poverty rate from 2000 to 2016.

From 2000 to 2016, the rate of children living at or below the federal poverty level in the state has overall increased the most largely due to the 2007 Great Recession. The rate for the state in 2016 was at 21.7 percent, a 5.2 percent increase from 2000.

Although this statistic is down from 16.4 percent in 2015 it is still far too many children in families that are struggling financially. While it shows that North Carolina is starting to combat this issue, there is still plenty of work to be done to help these children.

“The economic downturn pushed more than 160,000 children into poverty between 2007 and 2012, increasing the child poverty rate by more than one-third to its post-recession peak level of 26 percent,” according to the 2017 Poverty Report.

In 2018, North Carolina received an ‘F’ in Child & Family Economic Security, according to the North Carolina Child Health Report Card.

N.C. Child is an organization that advocates for public policies that ensure every child – regardless of race, ethnicity, or place of birth – has the opportunity to achieve their full potential.

The organization advocates policies to improve family economic security, one example is expanding access to health insurance for citizens who earn too much to qualify for Medicaid, but too little to buy private health insurance in the market. In North Carolina, a family of four that earns above $11,044 earns too much to qualify for Medicaid.

“When people can’t afford basic care, they often wind up in the emergency department with preventable, and very expensive, health crises,” said the Fawn Pattison, communications director for N.C. Child. “Keeping people healthy saves money, and helps them get back on their feet.”

In 2016, the child poverty rate for North Carolina was the 14th highest in the nation. At the same time, the state’s child poverty rate was higher than the state of Virginia but remained lower than other nearby states.

Additionally, in the past years North Carolina has failed to address the systematic barriers that drive racial and gender disparities in the experience of poverty. Systemic barriers include a lack of access to quality education, housing segregation, and job and wage discrimination.

The states’ population is increasingly growing younger and more racially diverse. From 1980 to 2014, the percentage of youth who are people of color has increased from 30.7 to 45.8 percent, representing more than 1 million children in North Carolina.

The state has not made serious gains in reducing poverty rates experienced by children of color. In 2016, 33.2 percent of children of color were in poverty compared to 12.4 percent of white children.

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