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Poverty and concentrated poverty are important economic indicators for any community. The U.S. Census Bureau sets the thresholds for who is considered to be experiencing poverty; these thresholds are based on income prior to taxes or tax credits [1]. Poverty thresholds vary by family size and by ages of family members; thresholds are adjusted annually to reflect changes in the consumer price index. For example, a family of four with two children under the age of 18 has a poverty threshold of $25,465. If the total household income was $25,500, then that family would not be considered to be experiencing poverty.
Those experiencing poverty tend to be clustered in groups instead of distributed evenly across a given geographic area. Concentrated poverty captures these clusters at a neighborhood level [2]. The following analyses define concentrated poverty as a neighborhood in which 40% or more of residents experience poverty. Residents living in areas of concentrated poverty may or may not be experiencing poverty themselves; regardless, they are relatively more likely to experience poverty in the future [3][4][5][6]. This effect is particularly pronounced for children; one study found that children were 50% more likely to have significantly less income than their parents when growing up in neighborhoods with high poverty rates [6].
Glossary terms used in this section: Margin of Error, Household, and Householder
The national poverty rate for the United States was 12.4% in 1969 and 11.8% in 2018 [1][7]. While living conditions have improved over time, poverty rates have remained stable. Additionally, racial and ethnic differences in poverty (those living below the federal poverty threshold) and in concentrated poverty (neighborhoods with higher levels of poverty) have persisted [2]. These differences are rooted in various historical policies from Jim Crow segregation to the practice of redlining in which red lines were drawn primarily around non-White neighborhoods to show that the areas were high-risk for mortgage lenders and financial investment [8]. Even the physical construction of U.S. 52 that cuts through East Winston-Salem disproportionately uprooted Black residents, businesses, and therefore, employment opportunities [9]. Today, residents who live in areas of concentrated poverty are economically and racially segregated, and have less access to sufficiently-funded public education and other community resources such as family planning clinics and public libraries [10][11].
On an individual level, poverty results in disadvantages that are far reaching. This is especially true for children who experience poverty early in life since they are also likely to experience adverse outcomes in adulthood, making social and economic mobility difficult [6][12][13]. Further, systemic racism affects social and economic mobility for Black and Latnix Americans even more as educational and employment opportunities, including racial biases in hiring practices, are limited [14][15][16].
Access to financial resources is critical to financial security. A group’s median income can indicate how that group’s income has changed over time and how it compares to other groups. Median income describes the level of income that half a group is above and the other half is below. For example, from 2014-2018, the median income for adult females working full time was $34,148. This means that half of adult females in Forsyth County earned less than $34,148 and half earned more.
Glossary terms used in this section: Median, Full-Time Work, Disparity, Household, Household Type, Householder
While poverty is an important economic indicator for a community, there is some evidence that poverty rates rely on outdated assumptions and do not take into account household expenses such as health or childcare costs [17]. Alternatively, the concept of income insufficiency describes those who earn less than their estimated essential expenses, including childcare, food, housing, transportation, healthcare, health insurance, other expenses (such as clothing, household cleaning products, and taxes, etc.).
Forsyth Futures developed a local income insufficiency calculation to address shortcomings associated with poverty measures. This calculation represents a more detailed consideration of family expenses and circumstances. This measure was informed by similar analyses in the Self-Sufficiency Standard created by the Center for Women’s Welfare at the University of Washington for the United Way and the Living Wage Calculator developed by Dr. Amy Glasmeier at the Massachusetts Institute of Technology (MIT). In Forsyth Futures’ income insufficiency analyses, each household is broken down into economic units. The primary economic unit represents a reference person and all people related to them, their spouse or partner, and any non-related children. Households that are composed of unrelated individuals such as roommates are assigned to their own individual economic units. Expenses are then calculated at either at an individual level and summarized at the economic unit or they are calculated by the size of economic units. Tax groups are identified and broken down into one or more tax groups depending on the composition of the economic unit where taxes on income are calculated. Then all expenses are summarized for all economic units and compared their income to determine income insufficiency. Thus, income insufficiency estimates are based on average expenses across all households and do not account for actual annual required estimates. It is possible that expenses estimated are greater for some families and less for others. For example, healthcare expenses can vary drastically for a family that needs specialized and consistent medical care versus a family that sparingly accesses the healthcare system. For more information or any questions on the methodology of income insufficiency please email info@forsythfutures.org.
Glossary terms used in this section: Income Insufficiency
Several federal and state programs exist to help fill the gaps between low-income households’ cost of living and income. However, many residents who need such support may not meet the income or other requirements for these programs. Additionally, as residents increase their income, they may abruptly lose access to these supports once they no longer meet the income qualifications. If residents lose more supports than they gained in income, this increase in income could end up being financially detrimental, in a phenomenon known as the benefits cliff [18]. The table below lists some of the federal and state programs available and the income requirements for participation.
Health insurance is crucial to economic stability. Healthcare costs are high and the United States spends more on healthcare than any other high-income country [19]. In addition to the associated health benefits of having health insurance, coverage also helps reduce the financial strain on individuals, families, and communities [20]. People without health insurance face more out-of-pocket expenses if they do utilize the healthcare system and can have negative health outcomes if they do not access healthcare when they are sick, which then can affect their economic security (e.g., having to miss work). Lack of health insurance also affects the broader healthcare system as hospitals and other healthcare networks provide uncompensated labor to meet health needs which can affect their allocation of resources [20].
Nearly 18% of North Carolinians are covered by Medicaid [21]. The passing of The Affordable Care Act (ACA) and the subsequent Supreme Court ruling gave states the option to expand Medicaid eligibility requirements. Such expansion provides more coverage to low-income individuals without employer-based health insurance or affordable access. North Carolina is in the minority of states that has still not expanded their Medicaid eligibility requirements [21]. An estimated 194,000 uninsured adults below the federal poverty threshold would be eligible if Medicaid were expanded [22].
The disparities in healthcare coverage between Latinx populations and non-Latinx populations are due to a variety of both economic and non-economic factors. Employer-based health insurance is the most common form of health insurance for working-age adults and Latinx populations are less likely to receive that benefit from an employer compared to White populations [23]. Additionally, immigration status affects one’s ability to qualify for Medicaid and North Carolina Health Choice (CHIP). Often immigrants that are ‘lawfully present’ must wait five years to become eligible for those programs. For example, Lawful Permanent Residents (LPR/Green Card Holders) must wait five years, although there are exceptions for “lawfully residing” children and/or pregnant women [24].
Even compared to other single parents, having a first baby during one’s teenage years puts young women at particular risk of negative economic outcomes [25]. Teenage mothers are less likely to complete high school in adolescence [25][26] and they have higher poverty rates in adulthood than women who delay having children [25]. This measure looks at the rate of pregnancies among Forsyth County girls ages 15-19. Teen pregnancy rates represent the rate of pregnancy for females between the ages of 15 and 19 for any identified racial and/or ethnic group per 1,000 of that same racial/ethnic group in a given year.
