More Than 700K N.C. Residents Live in Deep Poverty

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A new analysis from NC Policy Watch shows that more than 7 percent of North Carolina households—an estimated 725,000 residents—live in what’s known as deep poverty, meaning they earn 50 percent or less of the federal poverty level. For a family of four, that’s $12,300 a year, or $8 per person per day. These rates are highest in Watauga and Scotland counties, where nearly one-fifth of households are in deep poverty.

• “Since 1996 and the Personal Responsibility and Work Opportunity Reconciliation Act, also known as ‘welfare reform,’ the nation has seen a rise in the number of families living in deep poverty. This trend can largely be attributed to the disappearance of cash-based benefits to families with low incomes such as Aid to Families with Dependent Children and the state Earned Income Tax Credit. As a result, a stable source of cash flow has become virtually nonexistent for those living in deep poverty, and many households live off less than $2 per person per day. Children are typically hit the hardest by poverty. In North Carolina 1 in 5 children live in households with incomes below the Federal Poverty Line. Children of color are more than twice as likely to live in poverty than white children.”
  
• “In 2015, only seven percent of North Carolina families in poverty received [Temporary Aid to Needy Families, a cash-assistance program], falling far below the national average of 23 percent.”
  
• The report draws on 2015 data from the American Community Survey, which you can read here. The 2016 version of the ACS—the last year for which there’s data (I’m not entirely sure why Policy Watch used 2015 instead of 2016), shows a slight drop in deep poverty, down to 709,000 people with incomes at 50 percent of the poverty line or below. And overall, the 2016 ACS shows a slight decline in the state’s poverty rate from 2015, from 17.4 to 16.8 percent. The state’s post-recession poverty rate peaked at 17.6 percent in 2014 and has been declining as the economy gets stronger.
  
• In Durham County, the overall poverty rate is 17.4 percent, slightly higher than the statewide rate. More than twenty-three thousand residents live in deep poverty, a little more than 8 percent of the county’s population. In Wake County, meanwhile, the poverty rate is 10.8 percent, and 45,122 people (just under 5 percent of the population). In Orange County, the poverty rate is 14.5 percent, and about ten thousand people live in deep poverty (a little less than 8 percent of the county population).
  

WHAT IT MEANS: As NC Policy Watch notes, most of the deeply impoverished survive off of food stamps. Cash-assistance programs, including Aid to Families with Dependent Children and the state Earned Income Tax Credit, have fallen out of favor. The good news is that the poverty rate—and the deep poverty rate—seems to be declining as the economy does. The bad news is that seven hundred thousand people are barely scraping by, if that, and the state and federal governments have more or less turned their backs on them over the last two decades.

• Because wealth in the U.S. has become so disparate, with accumulations going to the top while others struggle, and because automation and artificial intelligence seem likely to disrupt the economy in coming years, with machines displacing humans for the benefit of shareholders, I’ve come to be, if not a proponent of, then at least curious about, universal basic income, “a periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement.” UBI would presumably replace food stamps and other poverty-assistance programs.
  
• Hillary Clinton toyed with running on a universal basic income [Vox], which would have been modest, but modeled off of the cash payments Alaska gives its residents courtesy of oil and gas revenues. But she chickened out: “Unfortunately, we couldn’t make the numbers work,” she wrote in What Happened, her campaign memoir. “To provide a meaningful dividend each year to every citizen, you’d have to raise enormous sums of money, and that would either mean a lot of new taxes or cannibalizing other important programs. We decided it was exciting but not realistic, and left it on the shelf.”