NC Budget and Tax Center - Economic Inequality in Durham, NC
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January 2014 Durham People's Alliance membership meeting presentation by the Budget and Tax Center's Allan Freyer on Economic Inequality in Durham, North Carolina.
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NC Budget and Tax Center - Economic Inequality in Durham, NC
- 1. When growth fails: Inequality in Durham County and North Carolina Durham People’s Alliance January 30, 2014
- 2. Overview • Why inequality matters • How did we get here? • Inequality in North Carolina • Inequality in Durham County
- 3. A strong middle class, and low income inequality, improves economic growth • Growing evidence that income inequality leads to shorter growth periods in business cycles • Rising inequality slows educational attainment and generates disparities in access • A weak middle class reduces and slows demand • High inequality reduces entrepreneurial risk-taking
- 4. How did we get here? Drivers of Inequality
- 5. Economic transformation Mid-wage goods-producing jobs replaced by low-wage serviceproviding jobs
- 6. North Carolina Workers' Wages Failing to Keep Pace with Productivity Gains During Current Recovery 15% 10% 5% 0% -5% -10% Recovery from 1991 Recession Recovery from 2001 Recession Recovery from 2007 Recession Percent Change in Productivity, Trough to Current Month Percent Change in Median Wages, Trough to Current Month Source: Budget and Tax Center’s analysis of Bureau of Economic Analysis and Current Population Survey. 1991-2007
- 7. When economic growth fails Economic growth fails to produce higher incomes for North Carolina families
- 8. Growth vs. prosperity • In this economic reality, growth is not enough • Lower wages, lower incomes • Not enough jobs • Too many lagging communities, regions • Increasing inequality
- 10. Incomes have been growing apart for three decades in NC. $45.00 Hourly Wages (in 2011 $) $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Median Top 10%
- 11. The top holds more than half the income in the state.
- 12. North Carolina Lags Behind Nation in Absolute & Relative Upward Economic Mobility 40% 35% 30% Absolute Mobility (percentage change of earnings overtime) 25% 20% Relative Upward Mobility (percentage of upwardly-mobile residents overtime) 15% 10% 5% 0% NC Source: Pew Center on the States. 2012. US
- 14. Durham by the numbers • Metro Durham is a bright spot for jobs Lowest unemployment in state (5.7%) Only metro with growing labor force Biggest % job growth in 2013 (3%) Highest wages in the state ($1,129/wk) • But jobs aren’t benefitting everyone 18% poverty rate vs. 16.7% poverty in NC Almost a quarter of all census tracts in Durham County designated high poverty Increase from 15% in 2005. These tracts have 47% poverty rate And a 55% child poverty rate
- 15. Incomes at the top dwarf those at the bottom in Durham $10,802 $51,510 Poorest 20% Middle 20% $333,154 Top 5%
- 16. Durham experiences widening income gap between Top 5% and everyone else Source: American Community Survey
- 17. Top 5% see biggest growth in share of total income earned in Durham County Source: American Community Survey
- 18. The top holds more than half the income in Durham County Source: American Community Survey, share of total household income, 2012
- 19. Policy
- 20. Policy Responses to Inequality • Targeting mid- and high-wage opportunities • Building career pathways • Helping lagging communities, regions • Creating more equitable tax policies • Minimum wage
- 21. Email me at: allan@ncjustice.org Follow us on Twitter at: @ncbudgetandtax www.ncjustice.org
Editor's Notes
- North Carolinians are contending with widespread income inequality, which correlates with lower economic mobility – the ability to move up the economic ladder. From 2006 to 2010, the percentage of income loss (shown here on the Y axis) experienced by NC’s poorest individuals (on the X axis) was larger than the loss experienced by NC’s richest individuals. The poorest 20% of North Carolinians lost over 10% of their income during this time; while the richest 20% of North Carolinians lost a little over 6% of their income. The middle 20% lost 9% of their income. In 2010, the average household income for households in the top 20% of the income distribution was almost 15 times the income of households in the bottom 20% and more than 3 times as large as the income of households in the middle fifth.North Carolina needs policies that enable equality of opportunity, policies that rebuild pathways into the middle class, andpolicies that ensure that prosperity is broadly shared for the next generation so that their economicpotential is fulfilled.Thank you, and please visit our website www.ncjustice.org for additional information.
- North Carolinians are contending with widespread income inequality, which correlates with lower economic mobility – the ability to move up the economic ladder. From 2006 to 2010, the percentage of income loss (shown here on the Y axis) experienced by NC’s poorest individuals (on the X axis) was larger than the loss experienced by NC’s richest individuals. The poorest 20% of North Carolinians lost over 10% of their income during this time; while the richest 20% of North Carolinians lost a little over 6% of their income. The middle 20% lost 9% of their income. In 2010, the average household income for households in the top 20% of the income distribution was almost 15 times the income of households in the bottom 20% and more than 3 times as large as the income of households in the middle fifth.North Carolina needs policies that enable equality of opportunity, policies that rebuild pathways into the middle class, andpolicies that ensure that prosperity is broadly shared for the next generation so that their economicpotential is fulfilled.Thank you, and please visit our website www.ncjustice.org for additional information.
- After decades of widening inequality, North Carolina's richest households have dramatically bigger incomes than its poorest households.The richest 5 percent of households have averageincomes 13.2 times as large as the bottom 20 percent of households and 4.6 times as large as the middle 20 percent of households.