The fall and rise of poverty in NC

by Rob Christensen, News and Observer, November 8, 2013.

Fifty years ago, North Carolina declared war on poverty and did a pretty fair job of beating it back. But now it’s on the rise again.

Under the leadership of Democratic Gov. Terry Sanford, the North Carolina Fund was created to address poverty and segregation in the state in 1963. The Durham-based fund developed ground-breaking programs in education, health, job training, housing and economic development that served as models a few years later for the Head Start and VISTA programs that were part of Lyndon Johnson’s War on Poverty.

Because it was so cutting edge and controversial for the time, Sanford went to New York and got the Ford Foundation to finance the fund rather than try to get money from a legislature dominated by rural conservative Democrats.

To mark the fund’s 50th anniversary, there will be a week of activities in Durham beginning with a screening of the documentary “Change Comes Knocking; The Story of the NC Fund” at 3 p.m. Sunday at the Hayti Heritage Center.

Fifty years ago, North Carolina was a different place.

In 1960, this was still a very poor state with a poverty rate of 37 percent. Half of all North Carolina students dropped out of school before obtaining a high school diploma. Of adults 25 and older, one-fourth had less than a sixth-grade education and were, for all practical purposes, illiterate.

Like the rest of the country, North Carolina’s poverty rate sharply declined through the rest of the century as living standards improved. North Carolina’s poverty rate fell to 20.3 percent by 1969, to 14.8 percent in 1979, to 13 percent in 1989, and to 12.3 percent in 1999.

Much of that drop was because of a growing economy. But most economists also believe that social programs passed by Congress in the ’60s such as Medicaid, Medicare, federal housing programs and food stamps also played an important role.

Since 2000, North Carolina has been marching in reverse.

North Carolina’s poverty rate grew to 15.1 percent in 2005 to 16.3 percent 2009 to 17.9 percent in 2011, according to the Congressional Research Office.

(The federal poverty level for an individual in 2011 was $11,484 per year, and for a family of four, it was $23,021.)

There are several reasons for the rise in poverty in North Carolina, according to a paper by Patrick Conway, the chairman of the economics department of the University of North Carolina at Chapel Hill.

The Great Recession has resulted in a large jump in unemployment. North Carolina in the mid-1990s was ranked first in the country in manufacturing as a share of its employment; it has been among the leaders in losing manufacturing jobs. Many of those people who lost textile jobs were older, uneducated workers who found it difficult to find other work.

The large influx of Hispanics into the state may have also increased the state’s poverty rate. And there are probably some unknown factors that can’t be pinpointed, Conway wrote.

“Reliance upon a return to full employment alone as a solution to this surge in poverty may not eliminate this latter increase in the poverty rate,” Conway wrote.

When the textile plant gate closed, 50-year old workers with limited educations were left with few options.

The new economy, writes N.C. State University economist Michael Walden, created winners and losers. The losers included high school dropouts, workers with only a high school education, blue-collar workers, Hispanics and workers in the construction industry and in entertainment.

“The rising tide,” Walden writes in his book “North Carolina in the Connected Age,” did not lift all boats. “Some floundered.”

It will be difficult for leaders in Raleigh – whether they be Democrat or Republican – to quickly turn around what looks to be structural poverty.