Archive (2009)

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Fall 2009

The Census Bureau released its 2008 national poverty statistics in September (available at http://www.census.gov/prod/2009pubs/p60-236.pdf). As might be expected, evidence of the recession's shadow starts to make an appearance, even though the data was collected in 2008, before the recession kicked into high gear.

Poverty

Poverty is up nationally, from 12.5% in 2007 to 13.2% in 2008. Almost 40 million people are poor in the U.S. Poverty increased for all racial groups, and one out of five children are now poor.

The poverty rate for female-headed households is a disturbing 28.7%.

Fifty-nine percent of adults in poverty are women; and 13% of all adult women are in poverty. Of unmarried women in poverty:

  • 35% are between 18 and 59, unmarried with children
  • 30% are between 18 and 59, living with other adult, no children
  • 12% are between 18 and 59 living alone
  • 23% are 60 or over
  • 22% of divorced or separated women are poor

Almost half of all poor people (42.9%) fall below 50% of the poverty level. About one out of ten African Americans and Hispanics were in this deep poverty. 18% of the total population, and one in four children, fall under 125% of the poverty level.

The South had both the highest number of people in poverty as well as the highest poverty rate (14.3%) in the country. The Northeast had the fewest poor people and the lowest rate of poverty (11.6%).

The Economic Policy Institute, a prominent D.C. think tank, forecasts that the poverty rate will increase to 15% in 2010, reaching 25% of children and almost half of female-headed households.

Income

The Census Bureau also reported that national real median income for households declined 3.6% between 2007 and 2008. This drop is the largest on record (records kept since 1967). While this drop is the largest drop since the government began keeping record in 1947, it doesn't tell the full story since the full effect of the recession is not captured in the 2008 data. Experts predict another 5% drop in household income in 2009.

This recession follows the weakest economic recovery in the post-World War II era. Family incomes were lower at the end of the 2000-2007 cycle than they were before the last recession, meaning they never fully recovered from the last recession before this one started. The mortgage crisis and household indebtedness rates only compound the problem.

In another sign of both the recession and the long-term stagnation of middle-class wages, median family incomes in 2008 fell to $50,300, compared with $52,200 the year before. This wiped out the income gains of the previous three years,

Median household income declined across racial lines: 2.6% for whites, 2.8% for blacks, 4.4% for Asians and 5.6% for Hispanics. Blacks had the lowest income at $34,218; Asians the highest at $65,637.

Older householders were especially hard hit, losing more income than their younger equivalents. Those between 45 and 54 lost 5.4% of their income; those between 55 and 64 lost 3.9%. This follows a decline for the 45-54 age group of 5.7% from 2000 to 2007, which also was a larger drop than for any other age group.

The Northeast was the only regional where the median household income was statistically unchanged. The other regions lost income, with the South losing the most at 4.9%. The South's median household income ($45,590) was the lowest in the nation.

In North Carolina

North Carolina mirrors and magnifies many of these national poverty trends. At 14.6% poverty in 2008 is up from the 2007 rate and is higher than it was in 2000 (13.1%), meaning the most recent economic recovery failed to reach low income families.

Unemployment has a significant impact on poverty. Consider this: between December 2007 and December 2008, North Carolina lost "only" 42,000 jobs. Between January and July 2009, the state lost 220,000 jobs. With many economists predicting that jobs will take years to recover, the outlook is not rosy.

The poverty figures released by the Census Bureau most recently include only the largest 37 counties. Of these, 18 had poverty rates higher than 15%. In five counties (Pitt, Robeson, Wayne, Wilkes, Wilson), at least one out of five residents is poor--one Robeson County, that number is closer to one out of three.

Reflecting how hard-pressed many North Carolinians are, 34.2% of homeowners pay more than 30% of their household income for housing costs (30% is considered the point at which housing expenses put excessive strain on a household's finances). Over 46% of renters pay more than 30% of their household income for rent.

Summer 2009

Unemployment in North Carolina reached its highest rate on record in May--the most recent month available. At 11.1%, North Carolina's unemployment rate is the seventh highest in the country. The unemployment rate a year ago, in May 2008, was a nostalgia-inducing 5.9%. (US Bureau of Labor Statistics)

According to April NC Employment Securities Commission data, fifteen counties have unemployment rates over 14%. Scotland County, located on the South Carolina border, has the highest rate at 17.3%, Rutherford, in the western part of the state, follows with 16.1%.

The Triangle region (Orange, Durham and Wake counties) boasts relatively low unemployment: 5.8%, 7.3% and 7.9% respectively.

Of large metropolitan areas in the country, Charlotte-Gastonia-Concord in North and South Carolina had the fourth highest May 2009 unemployment rate at 12.0%. Additionally, Hickory-Lenoir-Morganton had the fourth highest over-the-year increase in unemployment at +8.5%. (See Bureau of Labor Statistics June 30 News Release.)

On an optimistic note, many of the counties with the highest unemployment rates earlier in the year are showing an improvement. For example, Graham County's unemployment rate was 13.4% in April and 13.3% in May, down from 18% in Feb. Whether this is the result of seasonal and/or part-time employment, statistical anomalies, small changes in counties with low populations or other bobbles remains to be seen.

The national unemployment rate for May is 9.4%, with over 345,000 workers losing their jobs in May. This brings the total number of unemployed to 14.5 million in the U.S.

The number of unemployed who have been jobless for more than 27 weeks or more now stands at 3.9 million and has more than tripled since the start of the recession in Dec. 2007. The percentage of workers who are either unemployed, discouraged or employed part-time despite wanting full-time work is 16.4%.

According to a recent CDC report, almost 44 million Americans lacked health insurance during some part of 2008. North Carolina's percentage of uninsured jumped 22.5% between 2005 and 2007, the largest increase in the country. The NC Institute of Medicine estimated in March 2009 that 322,000 Tar Heels lost insurance coverage between 2007 and 2009. Because health care coverage is most commonly provided through private employer-based insurance, North Carolina's relatively high unemployment rate bodes ill for its insurance rate.

Winter 2009

The most recent Labor Department unemployment statistics continue to paint a bleak picture. In February, the national unemployment rate rose to 8.1% (from the January rate of 7.6%).

12.5 million Americans are unemployed. 851,000 lost their jobs in February alone.

Unemployment trends are particularly worrisome for African Americans and Hispanics. The unemployment rate for African American men (14.9%) is the worst, but the rates for black women (9.9%) and Hispanics (10.9%) are also alarming.

The Labor Department's most comprehensive alternative unemployment rate measure, which includes involuntarily part-time and "marginally attached" workers, reached 14.8% in February.

Almost a quarter (23.1%) of all unemployed workers have not been able to find a new job despite looking for 27 weeks or more.

Given the downward spiral of the global recession, the drop in average wages that many economists expect, the slowdown in consumer spending and the continuing losses suffered by the banking industry, economists predict that unemployment will keep falling through 2009.

Visit the Bureau of Labor Statistics for more information. (The tables that follow the news release are especially helpful.)

In March, the Labor Department reported that the February unemployment rate for North Carolina reached an historical high of 10.7%. This was the largest jobless rate one-year increase in the U.S.

UNC School of Law | Van Hecke-Wettach Hall | 160 Ridge Road, CB #3380 | Chapel Hill, NC 27599-3380 | 919.962.5106


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