From CFED

Even though the national unemployment rate has dropped to 5 percent in recent months, the underemployment rate in North Carolina remains stubbornly high with only negligible improvement in the number of state residents stuck in low-wage jobs, according to a new report from the Corporation for Enterprise Development (CFED).

Indeed, 52 percent of North Carolina’s households are locked into a “new normal” of perpetual financial insecurity, unable to build the savings needed to last even three months in the event of an emergency. The research, reflected in CFED’s 2016 Assets & Opportunity Scorecard, also found that state policies are doing little to improve the financial security of North Carolinians.

The situation is most dire for households of color. African-American and Latino households in North Carolina are significantly more likely to live below the federal poverty line compared to white households. Even more startling, new data show that businesses owned by whites in North Carolina are valued more than ten times higher than businesses owned by African-American residents.

Published annually, the Assets & Opportunity Scorecard offers the most comprehensive look available at Americans’ ability to save and build wealth, stay out of poverty and create a more prosperous future. This year’s Scorecard assesses all 50 states and the District of Columbia on 61 outcome measures spanning five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. It also ranks the states on 69 policies that promote financial security. When it comes to outcomes, Vermont ranks at the top of the country overall, while Mississippi ranks last

North Carolina’s 38th-place outcome ranking improved from last year’s 41st-place ranking. North Carolina’s outcomes place it among the five worst-performing states in both the Businesses & Jobs and Health Care categories (45th and 46th of 51, respectively). It has a high rate of low-wage jobs (31.1%), a low small business ownership rate (1.31%), and a large racial disparity in average business value, which is 4.1 times higher for white owners than it is for owners of color. The Tar Heel State ranks near the back of the pack in most Health Care outcomes as well, including a high percentage of adults not seeing a doctor due to cost (16.2%) and a low rate of employer-provided insurance coverage (53.3%). North Carolina also performs poorly on most Financial Assets & Income measures, indicating that residents experience barriers to building wealth and achieving financial security. The state has a high income poverty rate (16.0%), and its residents exhibit significant credit troubles, as evidenced by the state’s low rate of borrowers who are current on their credit obligations (76.5%).

The Scorecard also evaluates 69 different policy measures to determine how well states are addressing the challenges facing their residents. North Carolina ranks third in Housing & Homeownership policies, having adopted eight of 13 policies. It is ranked 9th in Education, 12th in Financial Assets & Income and 20th in Health Care. The Tar Heel State’s worst policy ranking is 36th in the Businesses and Jobs category, where it has enacted only one of 10 policies that would help North Carolinians grow small businesses and hold jobs that pay sufficiently.

Across the nation, the Scorecard found scant evidence that federal and state governments were willing to embrace policies that would open new doors to greater financial security for those struggling the most in the American economy. Without such commitments, most low-income individuals—particularly people of color—find themselves falling farther behind.

Among the key findings from this year’s Scorecard:

Homeownership rates remain at historic lows, falling to 63.1% for the eighth consecutive year of decline and contributing to crowding and rising costs in the rental market.

Fully 14.3% of adults say there was a time in the past year that they needed to see a doctor but could not because of cost. The statistics are worse for individuals of color with one in four Latino adults and one in five African-American adults saying money concerns prevented them from seeing a doctor.

Although both high school graduation rates (82.3%) and four-year college degree attainment (30.1%) increased from 2013 to 2014, racial disparities remain severe. Less than 20% of African- American adults and fewer than 15% of Latino adults hold four-year degrees.

While the national unemployment rate has dropped to 5%, the underemployment rate is twice as high, at 10.8%. What’s more, one-in-four jobs is in a low-wage occupation.

Building up even a small amount of savings is a challenge for almost half the country. Some 44% of households are “liquid asset poor,” meaning they have less than three months of savings to live at the poverty level if they suffer an income loss.

Business ownership among both men and women (21.4% and 17.1% of the labor force, respectively) declined from 2007 to 2012, even as average business value for both groups increased. Yet female-owned businesses still are worth only a third the value of the average male-owned business—$239,486 to $726,141, respectively.

“There certainly are positive signs that the nation’s economy is improving,” noted Andrea Levere, President of CFED. “But there also is very compelling evidence that many households are stuck in a financial hole and are struggling to dig themselves out. State governments can play a critical role in helping them move on to firmer ground and a more prosperous future.”

To read an analysis of key findings from the 2016 Assets & Opportunity Scorecard, click HERE. To access thecomplete Scorecard, visit HERE.

CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina, and San Francisco, California. CFED’s work makes it possible for millions of people to achieve financial security and contribute to an opportunity economy. We scale innovative practical solutions that empower low- and moderate-income people to build wealth. We drive responsive policy change at all levels of government. We support the efforts of community leaders across the country to advance economic opportunity for all. Established in 1979 as the Corporation for Enterprise Development.