Preliminary statistics released by the U.S. Census Bureau Thursday show poverty rose in North Carolina, and the nation as a whole last year.
In North Carolina, the statistics show about 291,000 North Carolinians became impoverished in 2008 and 2009, and the state’s poverty rate rose a full 3 percentage points from 13.9 to 16.9 over the course of the two years. Nationally, the poverty rate rose more than 1 percentage point in 2009, from 13.2 to 14.3 percent.
According to the North Carolina Justice Center, however, the blow was softened by enhanced federal assistance, primarily authorized under the 2009 stimulus package.
“Without the federal Recovery Act, the pain for working families would have been dramatically worse,” Justice Center Policy Analyst Alexandra Forter Sirota said in a press release. “Now is precisely the time to re-invest in American communities, to ease that suffering and get the economy going again.”
While Thursday’s release reflects some aspects of the stimulus package, such as unemployment insurance, it does not include data on others, such as food stamps and tax credits.
It is estimated unemployment insurance benefits alone kept 3.3 million Americans out of poverty in 2009, according to Justice Center analysis of census data.
One unexpected finding in the Census data was a reduction of 7.6 percent in the poverty rate among older Americans, which analysts credit to Social Security.
It is estimated more than 14 million senior citizens would have become impoverished in 2009 were it not for Social Security benefits.
“Social Security has been wildly successful at protecting older Americans from poverty, even during the worst economic crisis since the Great Depression,” Sirota said in a press release. “This is a wake-up call for the Deficit Commission, and for all Americans - Social Security is working and needs to be protected for generations to come.”
N.C. Policy Watch Analyst Rob Schofield pointed out that while the numbers are being released six weeks prior to Election Day 2010, there are several reasons why Democrat lawmakers who will be on the ballot for re-election shouldn’t be left holding the bag for the country’s rising number of poor people.
First, he pointed out the numbers are from 2009, the year Obama and the Democrat-led Congress took office. Second, “a spike in poverty does not arise or subside overnight.” Third, the numbers don’t reflect parts of the stimulus package, and fourth, he attributes the lack of “passage of a truly adequate stimulus/recovery package” to blockage by conservatives under the guise of “irresponsible spending.”
For some, however, the fact that the poverty levels of North Carolina and the nation rose despite the federal government opening its checkbook for unprecedented domestic spending proves the futility of deficit-spending to support social programs.
With the stimulus package set to expire at the end of the year, the Justice Center cautioned that if this assistance disappears before the job market and family incomes rebound, even more people could become trapped in poverty.
“Stubbornly high unemployment bodes poorly for improvements to measures of poverty and health insurance coverage in 2010 and 2011,” the release reads.
Sirota suggests “expansion of several Recovery Act provisions for middle- and low-income households.”
Among the provisions suggested are investment in unemployment insurance benefits and enhanced funding for Earned Income and Child Tax Credits under the Recovery Act to be expanded or institutionalized as permanent, as well as extending Temporary Assistance for Needy Families (TANF) emergency funding also approved in the Recovery Act.
For North Carolina leaders, Sirota suggests “investing in the public structures that support working families in tough economic times,” as they navigate the estimated $3 billion to $4 billion budget shortfall expected during next year’s General Assembly budget session.
“State leaders must take a balanced approach that includes revenue to maintain vital education, health and public safety programs and services,” Sirota said. “Those investments are more important now than ever, to our economy and our people.”
The survey of state-level poverty rates in Thursday’s release are preliminary, but more authoritative estimates to include county data is scheduled for Sept. 28. This release is also set to include additional health insurance data.
The Justice Center estimates more than 1 million North Carolinians will benefit from middle class tax cuts set to take effect in 2014 to help pay for the cost of private health insurance under recently passed federal health care reform.
Staff Writer Philip D. Brown can be reached at (910) 997-3111 ext. 32, or by e-mail at firstname.lastname@example.org.