In NC, our economic fates are intertwined

When our leaders commit to policies that put people first instead of special interests and political agendas, it is possible to drive opportunity to every square mile of our state.

The Great Society, informed of course by North Carolina’s earlier efforts to fight poverty through the North Carolina Fund, was one example of what is possible when we collectively fight poverty and the inequality that holds us back from fulfilling the promise of our country. To suggest it failed is to whitewash the history of what came before — slave labor that amassed wealth for the few and brutalized Black bodies, confiscation of land that robbed generations of wealth building, exclusion from lending that cut off families from homeownership.

Just as J. Peder Zane’s retelling of that historical moment (Oct. 29: “The failure of Democrats’ Great Society approach”) shouldn’t go unchallenged, nor should we allow loyalists to the austerity agenda to retell our state’s recent history and what it has meant for Black, brown and the majority of whites North Carolinians across this state.

The tax breaks for the rich and big corporations lauded by J Peder Zane meant that the economic recovery that ended with COVID-19 saw the consolidation of income by the top 1 percent. In 2019, over half of total the income in North Carolina went to the richest 20 percent of residents. It also didn’t reach every county with nearly half of all counties still not having returned to pre-employment levels before COVID-19 hit.

We know enough about inequality at this point to know that our levels of inequality are not only bad for economic growth in the long-run but hurt the health and well-being of people and destabilize democracies.

The tax cuts in NC meant the state had less and less to invest in the education of every child, the affordability of higher education and the infrastructure of public health systems and broadband—critical tools for this particular crisis and for securing the promise of economic mobility for all.

Legislative leaders’ tax cut agenda and hollowing out of the programs and services that build pathways out of poverty is perhaps the sharpest example of their rejection of the responsibility of governance. Rather than working toward a collective goal that we all enjoy the fruits of our labor and live healthy lives, their policymaking favored narrow interests of the wealthy and powerful.

Tax cuts went overwhelmingly to white taxpayers — 81 percent— greater than the share that white taxpayers represent — 66 percent — of all N.C. taxpayers. At the same time policymakers eliminated a tax credit that provided low-wage workers — more than 1 million families — with a much-needed boost.

The national economic recovery may have delivered modest gains to personal incomes and wages overall but it was not sufficient to close the distance resulting from long-standing inattention to inequities in our economy. Despite growth of median household incomes in the past decade in North Carolina, the median household still had lower incomes than in 2000. Income growth was not sufficient to keep up with the rising cost of housing, child care and a college education.

Taking a deeper look at the Federal Reserve report cited by Zane, “families without a high school diploma, which saw the largest proportional gains in median and mean net worth between 2013 and 2016, saw the largest drops between 2016 and 2019.” Median net worth – the difference between assets and liabilities – for people without a high school diploma decreased by 16 percent from 2016 to 2019.

Comparable data for people of color and people making low wages in North Carolina does exist. Every year, the NC Budget & Tax Center publishes a report on income and poverty. This year, our findings confirm that North Carolina continues to have higher poverty rates than the U.S. as whole. In 2019, North Carolina’s poverty rate of 13.6 percent was 3 percentage points higher than the U.S. rate. One in 4 Native Americans and 1 in 5 Black people in North Carolina lived in poverty.

People are worse off under austerity policies. People are worse off when policymakers make choices that exclude groups from accessing opportunities or build systems that don’t reach every community. We are all worse off for the repudiation it represents of the very core of what it means to be part of a community, a democracy — that the well-being of each of us affects the well-being of us all.

This story was originally published November 1, 2020 at 12:00 AM.