[North Carolina] Tracking Poverty's Pathways

from Duke University

"We not only must continue to look for new work opportunities that pay meaningful wages, but also we must find ways to sustain insurance coverage for those who have lost jobs," the authors write

By Anirudh Krishna and Leslie Boney

The recent news that North Carolina's poverty rate is up again this year -- despite the improved economy -- and that North Carolina remains in the bottom 10 states in the country for poverty, has led to an explosion of yawns across the state. “We've thrown a lot of money at the problem,” the attitude seems to be, “and it hasn't gone away.” But what if there was another way of looking at poverty, based not on how much we have spent, but on which factors poor people thought were most effective in preventing them from falling into poverty, or which factors were most successful in helping them escape?

This past summer, with funding from The Duke Endowment’s Program for the Rural Carolinas and Duke’s Terry Sanford Institute of Public Policy, Duke students and community researchers from four rural counties -- Beaufort, Burke, Gates and Vance -- talked to 312 disadvantaged families.

Here’s what we found:

Poverty isn't static, even if poverty rates are. While the overall poverty rates haven't changed much in the past decade, more than one-third of families either have fallen into or escaped poverty over the same period. Some families have escaped poverty; others have fallen in. Clearly two sorts of policies are called for: ones that prevent families from falling into poverty, and others that help people escape from poverty.

Four main factors form the pathways into or out of poverty:

1. Job status -- losing a job is the most common factor cited among families falling into poverty; getting a good new job is the most-often cited reason for an escape from poverty. “I just want a decent job,” one BurkeCounty man told us. “We like to work.” (Unfortunately, decent jobs are harder and harder to find, particularly for those with less education.)

2. Health-related issues -- disabilities, extended illnesses and loss of health insurance and the resulting medical debt were cited by about a third of those falling in to poverty as one of the principal causes. In many cases, the swirl of medical debt drains equity from homes and often forces families to borrow money at dangerously poor terms.

3. Family factors -- divorce or lack of family support often helped propel families into poverty; marriage or the presence of a supportive family helped people escape. As one Beaufort County resident noted, “you need a wife and husband team to make it around here.”

4. Budgeting -- Several of the families escaping poverty reported that forming and sticking with a budget was a significant factor in helping them move out of poverty.

No single factor can transport a family into or out of poverty. It is significant that most families moving out of poverty or falling into poverty cited two or more of these factors in explaining their change of status. In most cases, it was the combination of loss of job and loss of insurance, or getting sick with no insurance or other family support, that pushed families into poverty.

We still need the supports already in place, but since resources for fighting poverty are limited, our study suggests that some investments are more helpful than others. We should invest in initiatives designed to keep poverty-related factors from piling up on families. We not only must continue to look for new work opportunities that pay meaningful wages, but also we must find ways to sustain insurance coverage for those who have lost jobs. Here’s how one Gates County resident put it: “Health insurance is something you can’t afford, but you can’t afford not to have it.” Similarly, we can’t prevent divorce, but we can provide more public and private support to struggling families. We can do more to control predatory lending practices and we can teach struggling families budgeting skills.

Not all investments in poverty are created equal -- some are more equal than others. The results of this study suggest that we can get smarter about what those “more equal” investments are -- if we make it our official policy to talk to the people we are trying to help.

Anirudh Krishna is an assistant professor of public policy studies and political science at Duke; Leslie Boney is a senior associate at MDC, Inc., a Chapel Hill-based nonprofit.