New report finds that One in Three North Carolina Working Families are Low Income

WASHINGTON – More than one in four American working families now earn wages so low that they have difficulty surviving financially, a new national report concludes. This situation is worse in North Carolina where one in three working families are low-income.

The report, “Working Hard, Falling Short: America’s Working Families and the Pursuit of Economic Security,” provides a groundbreaking new look at the nation’s low-income working families and the efforts of state governments to help them develop financial security. The report finds that too many jobs pay poor wages and provide no benefits.

The report finds that North Carolina consistently ranks in the bottom third of all states on several indicators of economic well-being of the state’s working families. North Carolina ranks:

- 38th in the percentage of working families that are low-income;
- 38th in the percentage of children in working families that are low-income;
- 37th in the gap between the lowest earning 20% and the top earning 20%
   of working families;
- 42nd with almost 50% of minority working families earning a low-wage; and
- 42nd in the percentage of under-employed workers with 10.9% of the state’s
   workers not fully employed.

“These findings confirm the findings of our recent report “State of Working North Carolina 2004” which found that North Carolina families continue to suffer greatly from economic restructuring, which accelerated during the 2001 recession,” said Sorien Schmidt, Legislative Director of the NC Justice Center. “In spite of four years of budget shortfalls, the state ranks well compared to other states in spending on training and higher education for adults. This highlights the federal government’s failure to do its parts in helping North Carolina’s working families survive and prepare for the new economy.”

The report concludes that the federal government must lead a wide-ranging effort to address the problems confronting these families. State policy-makers must also improve such initiatives as subsidized child care to help low-income workers advance, Medicaid eligibility for adults and helping more North Carolinians pay their living expenses while unemployed and attending re-training or higher education.

The report assembles a wide range of data about state efforts on behalf of low-income working families and finds that North Carolina does well compared to many states regarding higher education spending, but still falls short in helping families with basic daily expenses:

•	North Carolina ranks 17th, spending nearly $41 in Adult education per adult without a high school diploma and 19th in state based post-secondary need based aid;
•	North Carolina provides Medicaid health insurance only to those who earn less than 59 percent of the federal poverty threshold. This ranks the state 33rd, and means adults in some three-person North Carolina families, for example, lose eligibility for Medicaid when their annual earnings exceed about $9,000; in 16 other states, eligibility extends to families earning more than $15,000.
•	Only 58% of North Carolina unemployed workers receive unemployment insurance, the 27th lowest ranking.
•	North Carolina does not provide an Earned Income Tax Credit nor a state set minimum wage, both of which would greatly assist low-wage families in their fight for survival.

The report was conducted as part of the Working Poor Families Project. Supported by the Annie E. Casey, Ford, and Rockefeller Foundations, the Project spotlights issues confronting low-income working families and recommends policy changes to improve their economic standing.

Information on the Project and copies of the state reports are available at the AECF web site. The views expressed in “Working Hard, Falling Short” are those of the authors and do not necessarily reflect those of the supporting foundations.

For more information on North Carolina’s low-income working families and the state’s efforts to help them develop economic security, contact Sorien Schmidt, NC Justice Center, 919-856-2151. The N.C. Justice Center is North Carolina’s preeminent anti-poverty research and advocacy organization and a leading voice for state policies that promote economic justice and fair treatment of workers.

For more information on the national report, contact Ed Hatcher of The Hatcher Group, 301-656-0348.

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