Here's Why North Carolina Keeps Getting Poorer
A recent Brookings Institution report found four North Carolina metro areas (Winston-Salem, Greensboro-High Point, Raleigh, and Charlotte) fell within the top 10 in the nation for both growth in poor population and growth of poor neighborhoods.
From 2008 to 2012, the poverty rate within the state has grown from 14.6% to 18%, according to the Pew Charitable Trusts.
University of North Carolina professor Gene Nichol - who has written extensively on poverty in North Carolina - has some interesting insights into why so many people in the southern state continue to be destitute. Nichol told us North Carolina "has suffered a double-whammy in a way that is uncommon."1994 North American Free Trade Agreement more than potentially any other state in the nation. NAFTA allows free trade between Mexico, Canada, and the U.S., and opponents of the agreement believed it would lead to the destruction of hundreds of thousands of U.S. jobs as well as plummeting wages, according to Public Citizen. Those who supported the agreement believed it would increase the standard of living in America.
As a result of NAFTA, Nichol says, the state lost massive numbers of manufacturing, agricultural, and tobacco-related jobs, and North Carolinians were forced into structural unemployment.
"Many folks lost their jobs in that period," Nichol said. "They either didn't get successful replacements or frequently got other jobs but they had dramatically diminished salaries. That's had a big impact on poverty levels in North Carolina."
The second part of that double-whammy came in the form of the housing collapse and the great recession in 2008, which happened right as North Carolina was beginning to turn the corner after the NAFTA fallout.
"Since that time, we've embarked upon a number of decisions that radically wound poor people," Nichol said.
One of those decisions came after the Supreme Court ruled in 2012 that states had the option to opt in or opt out of the expanded Medicaid plan outlined in President Obama's Affordable Care Act. North Carolina was one of 20 states that decided not to expand Medicaid coverage to low-income residents, according to the Advisory Board Company.Earlier this year, North Carolina also cut unemployment benefits to a 14-week maximum, which is the shortest amount in the U.S, according to The Wall Street Journal. Previously, the maximum allowed in the state was 19 weeks. In addition, North Carolina became the only state in 30 years to eliminate a state Earned Income Tax Credit, which reduced taxes for low- and moderate-income people, according to WUNC.org.
In conducting interviews with impoverished people in cities such as Charlotte, Nichol said the solution isn't as complicated as one would think.
"There are some jobs to be had in Charlotte, in Raleigh, but they are so dominantly low-wage, minimum wage, service-sector jobs. You just can't live on $7.25 an hour in Charlotte or Raleigh or Winston-Salem," he said. "What I think we need to do first is, a small step, raise the minimum wage in NC."
Thirteen states raised the minimum wage on Jan. 1, and those states are seeing a larger increase in the number of jobs created compared to the 37 states that did not, NPR reports. Even cities have raised the minimum wage, such as Seattle, which raised it to $15 within the city, USA Today reports.
"It's not a huge help, but it helps," Cherry Lunario, a 49-year-old San Jose resident, told USA Today. "It makes your life a little better."
Nichol sees a higher minimum wage as the obvious and easiest way to put a dent in North Carolina poverty, even though it's not the most realistic prospect.
"God knows our legislature would be among the last to approve it," he said, "but we ought to raise the minimum wage in North Carolina."