Further Analysis of Economic Mobility in NC

June 7, 2012 at 2:57 pm 1 comment

We had previously blogged about a study by the Pew Center on the States that looked at economic mobility across the nation. The NC Budget & Tax Center has issued a brief that looks at this issue further. Here are the key findings:

  • Factors beyond effort and skill impact one’s ability to achieve the American Dream of getting ahead, including geography, socioeconomic status, education attainment, and race.
  • Research shows that economic mobility is harder for North Carolinians compared to the average American. North Carolina lags behind the United States and the Southeastern region in absolute and relative upward economic mobility.
  • North Carolinians are contending with widespread income inequality, which correlates with lower economic mobility. In 2010, the average household income for households in the top fifth of the income distribution was nearly 15 times as large as the income of households in the bottom fifth and more than 3 times as large as the income of households in the middle fifth.

The brief also points out that low economic mobility corresponds to income inequality. In North Carolina, the income of the top fifth of earners is 15 times the income of the bottom fifth of earners. Furthermore, income inequality and economic mobility are even more restricted for people of color. Sixty-three percent of African Americans who are born into the bottom quarter of the income scale are likely to remain there even as adults. This is double the rate of whites. In addition, the income gap between whites and African Americans is over $18,000.

These findings have serious implications for the future of North Carolina. As more and more citizens are unable to access economic opportunity, the state will continue to see an uneven and slow recovery. Our state’s policies should support and encourage working families, particularly in low-income areas and communities of color, in order to uplift the entire state.

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