View from Moratoc Park in Williamson, NC, overlooking the Roanoke River
For communities across the U.S., the wrap-up of summer means the start of school, crisper and cooler air, and college football season. For Southern and East Coast states, this time of year is also marked by the looming threats of hurricane season. Already this season, we’ve seen two significant hurricanes, Harvey and Irma, bring destruction to coastal islands and Southern communities. A natural disaster that damages homes, businesses, and local infrastructure can be an inconvenience at best and a devastating set-back at worst for communities that are working hard to improve outcomes for their residents. When we consider what it takes to create Southern places characterized by belonging, thriving, and contributing, we know it’s important for communities to be forward-thinking about equitable growth and bright spots of opportunity—and we’re reminded that environmental resiliency is crucial to these efforts. We’ll be exploring the need for this kind of resilience in Southern communities. We’ll talk about the risks posed by climate change, who is particularly vulnerable to these risks, and why this matters for communities that seek to propel their residents toward higher levels of upward economic mobility.
Today, we begin with an examination of 17 northeastern North Carolina counties that know all too well the frustrations and obstacles brought on by environmental vulnerability. These counties—Beaufort, Bertie, Camden, Carteret, Chowan, Craven, Currituck, Dare, Gates, Hertford, Hyde, Martin, Pamlico, Pasquotank, Perquimans, Tyrrell, and Washington—comprise North Carolina’s “Inner Banks,” part of the focus region of North Carolina Land of Water (NC LOW). NC LOW is a nonprofit organization supporting sustainable development of northeastern North Carolina’s natural resources and cultural history. While they focus on eastern parts of the state including the Outer Banks, NC LOW recently commissioned MDC to conduct a data scan of the state’s Inner Banks to examine educational attainment, poverty, upward economic mobility, availability of living-wage employment, and emerging industries. MDC visited some of these counties’ lovely natural spaces and spoke with local business owners who are dependent on the tourist economy driven by the region’s natural assets.
Pettigrew State Park Trail, by Somerset Place (formerly Plantation) in Creswell, NC
It’s not surprising that many entrepreneurs in the Northeastern part of the state have invested in the tourism industry, hunting and fishing services, and restaurants that welcome tourists. For rural communities close to the water and characterized by unique ecosystems, tourism can revitalize towns and turn communities into centers of celebration and festivities, as Chowan County has seen in the small town of Edenton. In fact, NC LOW would like to see local leaders in government and economic development place their bets even more on the ecotourism industry, rather than recruit industries that have the potential to harm the area’s natural resources.
According to Dr. Stanley Riggs, the Chair of the Board of Directors for NC LOW, in the past few years a new generation of young people returned to these counties with aspirations of starting guide services in the unique swamps and waters of the Roanoke River and Albemarle-Pamlico sounds. However, the localities hadn’t yet invested in the infrastructure needed to make this sector robust. Since then, some municipalities have built camping platforms, boat ramps, new parks, and other features that undergird the ecotourism industry.
For this economic development strategy to work, however, communities in Northeastern NC need to have environmental resiliency: decreased vulnerability to natural disasters and other forces that could harm the area’s natural resources. Last year’s hurricane season provides a case study of the damaging effects natural disasters can bring to local economies. In 2016 alone, Windsor, a small town in Bertie County, saw 10 to 20 feet of flooding in some areas three times over the course of the hurricane season, with Hurricane Matthew doling out particularly devastating effects on the heels of previous floods. Local business owners we surveyed referenced the area’s vulnerability to natural disasters as they discussed the challenges of having a brick-and-mortar business. One Windsor restaurant transitioned to a food truck after repeated flooding; the state’s FEMA policy covers homes, but not businesses. While this adaptation has been an exciting new experience and challenge for the business owners, closing their restaurant meant laying off many employees whom they valued and who, in turn, surely valued that source of income.
These effects are particularly troubling considering the high rates of poverty, low rates of educational attainment, and low chances for upward economic mobility in the Inner Banks counties. In Bertie County, for example, where the Windsor business is located:
- 22 percent of the population lives in poverty (nine percent of the white population and 30 percent of the black population) (U.S. Census Bureau American FactFinder)
- Only three percent of those born into the lowest income quintile in the area will make it to the top earnings bracket as adults, according to the Equality of Opportunity Project. Conversely, 72 percent of these individuals will stay in either the lowest or second-lowest earnings bracket as adults.
- Only 47 percent of the white population and 27 percent of the black population have at least some education beyond high school.
- In 2016, only 17 percent of jobs paying between $20-30/hour were occupied by workers with just a high school degree. Meanwhile, a single adult supporting one child must make an average of $20.98/hour to meet basic living expenses in Bertie County. (MDC analysis of EMSI data and the MIT Living Wage Calculator)
These factors alone create a discouraging situation for economic resilience—add recurring natural disasters to the mix, and it’s clear that communities like Bertie County, in which 62 percent of the population is black and 35 percent is white, are particularly at risk for the crippling effects of natural disasters, especially as those events are projected to occur with increasing frequency and strength.
Source: Equality of Opportunity Project
We sometimes think about climate change affecting endangered species or making snow a little less likely here in the South. While scientists warn of the likelihood of both scenarios, it’s worth considering the economic dangers of climate change. Current global practices, such as relying heavily on fossil fuels, contribute to increasing atmospheric temperature, which may explain in part why we’re seeing such intense storms that relentlessly hit communities in the South. As we know, many of these communities are vulnerable due to proximity to water, low-lying lands, higher rates of poverty, lower levels of educational attainment, and policies that don’t adequately support recovery.
So what can communities like Bertie County—and its neighboring Inner Banks counties—do to increase environmental resiliency in its area, particularly when ecotourism seems like a promising economic development strategy? “Resiliency” doesn’t mean that a community is utterly invincible; it’s about being prepared so that recovery from unexpected set-backs like natural disasters or economic recessions can be as smooth and strong as possible. Resiliency can be built at local or state levels, for example, by creating recovery policies that more accurately reflect the realities of flooding or by ensuring that local manufacturers and other industries don’t contribute to the degradation of natural resources. Forward-thinking leaders in education and employment also can help build community resiliency by providing education and employment opportunities that lead to credentials and living-wage employment, so that residents can acquire the savings and safety net needed to literally “weather” life’s storms.
In our next State of the South blog on climate change in the South, we’ll examine an effect of natural disasters that doesn’t discriminate between rural and metro areas: the threats to healthcare centers and the patients they serve. Stay tuned, and from all of us here at MDC and State of the South, we extend our sincere condolences and hopes for recovery to those affected by Hurricanes Harvey and Irma. To support local and national recovery efforts, you can donate to one or more of the many organizations assisting victims and their families in Houston and areas affected by Irma and Maria.
Today is the first post from our 2017-18 Autry Fellow, Rishi Jaswaney. We’re happy to have him at MDC and writing for the State of the South blog!
We’ve all felt it before. That sinking feeling before a big exam, an interview, or when your favorite character on Game of Thrones is “removed from casting” in the throes of battle.
Stress. Side-effects may include: nausea, indigestion, headaches and excessive perspiration.
In limited amounts, stress can motivate us to pursue our personal and professional goals. As stressors pass in and out of our lives, the stress hormone, cortisol, naturally fluctuates, but as challenges persist, cortisol levels remain elevated. When stress is a chronic condition, it can be linked to anxiety, depression, and other developmental and psychological issues. Research documenting income-based patterns in health outcomes—including disparities in who is more likely to experience chronic stress—raises new questions regarding the state of health equity in our nation.
As seen in the Centers for Disease Control and Prevention (CDC) chart below, serious psychological distress is associated with severe health problems, including chronic obstructive pulmonary disease (COPD), heart disease, and diabetes. Even more concerning is the disproportionate clustering of these conditions in high-poverty communities, as reported by the CDC: “A total of 8.7 percent of adults with income below the federal poverty level had serious psychological distress, compared with 1.2 percent of adults with incomes at or above 400 percent of the poverty level.”
The daily economic, educational, and social challenges facing those in poverty can create barriers to health services and lead to poorer health outcomes. This idea is captured in the Social Determinants of Health framework, which The World Health Organization (WHO) has defined as the “the conditions in which people are born, grow, live, work and age.” The general argument is that people in high poverty communities are more susceptible to certain illnesses, have less access to health care providers, and are frequently forced to delay care or medicine for financial reasons. The proximity of clinics, public transportation options, and the quality of food vendors, all affect one’s ability to address health concerns and seek care. As the social determinants of health concept has taken hold, organizations like Kaiser Family Foundation have adopted more nuanced definitions, incorporating more detailed categories, as shown below.
The WHO and others have emphasized how money, power, and the distribution of resources (through institutional decisions and policy implementation) shape community conditions and drive health outcomes. In places where education, employment, and accessibility are falling behind national averages, health outcomes are trailing along with them. For example, in North Carolina, counties with the lowest rates of postsecondary attainment and employment (Robeson and Warren counties) also rank poorly on measures of low birthweight, obesity, and diabetes prevalence. Counties with the highest rates of postsecondary attainment and employment (Wake and Orange counties) have the lowest rates of these indicators.
Source: National County Health Rankings
If education and employment are key drivers of upward economic mobility, then people must be healthy enough to take advantage of these opportunities. There are many narratives about educational attainment as a predictor of health outcomes. Formal education often provides foundational principles of nutrition, healthy behaviors, and general health literacy. Education is also an avenue for insurance benefits through school plans or future employment opportunities. Lastly, education provides individuals with an intangible set of resources such as social networks, norms, and relationships that can cultivate healthy practices.
It is important to recognize that poorer health outcomes in high poverty areas have been driven by policy that marginalizes low-income communities. The provisions of the Affordable Care Act made strides in addressing issues of healthcare access, but in order to holistically address health equity, we must also consider the underlying environmental, social, and economic factors that enable good health. Improving preventative initiatives, health education, and access to nutritious foods are a few measures that could begin to eliminate these disparities, improve public health, and encourage, rather than hinder, economic mobility. Throughout my Autry year with MDC, I hope to continue shedding light on the social determinants of health that persistently marginalize low-income communities. Stay tuned for more posts on how these issues play out in Southern communities!
As an organization that has worked for nearly 50 years to build a South that is inclusive, thriving, and just, MDC is saddened and alarmed at the events in Charlottesville and a resurgence of the hatred and violent expressions of white supremacy that poisoned our region for too much of its history. We stand with our fellow Southerners and all Americans who wish to make our home a place that honors the dignity and talents of all its people, and that is guided by the conviction that society benefits when everyone succeeds. Only through recognizing our common humanity and grounding our actions and policies in a commitment to equity and inclusion can we make the South and the nation live up to our highest ideals.
You have made an informed decision, assessed all of your options, and are going to be a mom! Congratulations! You have guaranteed yourself a lifetime of macaroni art, tiny hand prints, misspelled poems, and eventually some flowers, or even a nice handbag. As Mother’s Day approaches I am left contemplating what I could possibly give the woman who sacrificed it all for me. She gave me her time, her attention, and perhaps her economic mobility as well?
We can’t talk about mothers and the economy without discussing the history of women in the workforce. World Wars I and II brought more women into industry and public service jobs, filling vacancies left by servicemen. These vacancies broadened the scope of both the type of jobs and the types of women in the workforce. (Before World War I, many employers refused to hire married women.) By 1963, Congress passed the Equal Pay Act, which mandated equal pay for both genders. Adding another layer of protection, the Pregnancy Discrimination Act of 1978, banned discrimination against pregnant women in the workplace.
Currently there are over 72 million women in the labor force, 47 percent of all workers. These women, however, are not paid the equal wage guaranteed to them by the Equal Pay Act, instead making 77 cents to every dollar made by their male counterparts. The wage disparities are even greater for women of color. African-American women earn only 64 cents, while Hispanic/Latinas are even worse off, with a mere 56 cents to the dollar.
Both dual income and single mothers face similar challenges at work and with economic mobility. In a Cornell University study entitled “Getting a Job: Is There a Motherhood Penalty?” researchers found that employed mothers face discrimination that could significantly interfere with their economic mobility, in both wages and perceptions of competence and commitment. Using job applications for a pair of same-gendered and equally qualified applicants who differed on parental status, researchers compared hiring outcomes in both a laboratory study and with actual employers. They found that in addition to the gender wage gap women face, mothers experienced a per-child penalty of 5 percent. Researchers also found that mothers are perceived as less competent and committed to their work. (The opposite was found to be true for fathers in the workforce. They were seen as more committed and even offered higher starting salaries.) Women without children were seen as more competent than men without children. The study was unable to determine the causal mechanism for this bias. The fact that evaluators offered higher salaries to fathers suggests a gendered mentality as to who the bread winner should be. (And let’s not forget the unpaid labor of mothers working in the home as primary caregivers. It is estimated that these moms should be paid about $59,862 for all of the work they do managing households and caring for children.)
These biases have even more devastating implications for single mothers, who do not have a supplemental income from a partner. According to the U.S. Census Bureau, out of about 12 million single-parent families in 2016, more than 80 percent were headed by single mothers. Of those single mothers, about 49 percent have never married and 51 percent are divorced, separated, or widowed. Single mothers earn well below married mothers on the income ladder: in 2013, single mothers had a median income of $26,000 compared to married mothers’ median income of $84,000. All in all, single mothers fare worse on almost all accounts when compared to married mothers. Making ends meet is especially challenging for single mothers with poverty rates five times higher than that of married mothers. This leads to a higher incidence of homelessness and subpar access to health care (75 percent of homeless families are headed by single mothers and over 20 percent lack healthcare).
As mentioned earlier, women of color face an even larger wage gap compared to men and white women. The challenges facing mothers of color—single and married, working and non-working—are notable. The proportion of female-headed working families is higher among African Americans (65 percent), compared with whites (36 percent), Asians (20 percent), Latinos (31 percent), and those in other racial groups (45 percent). Mothers of color must also manage the disparities in education, obtaining culturally relevant child care, and fear of violence that their children may face due to discrimination.
While there is no holiday where more money is spent to celebrate any one individual more than Mother’s Day, I wonder if mothers have the same place of high esteem in our policies or practices. Perhaps the best way to appreciate a mother’s role in society this year would be to offer equitable wages, flexible employment opportunities, and supportive services, like quality, affordable dependent care. (But you could send the flowers, too, I guess.)
Completion of a college degree has long been associated with higher lifetime earnings, and many prospective students expect that their best chance for upward economic mobility lies in the classrooms of the most elite institutions of higher education. Much of our media and messaging reinforce the idea that the smartest, most successful people are those who attend or have graduated from such institutions. The message sent to prospective students is that, if you can gain access to these institutions (not easy for many), success is guaranteed.
The results of a new study by the Equality of Opportunity Project, however, suggest that while elite institutions provide increased chances of becoming rich as an adult, the largest share of students who move from the bottom to the top of the income bracket actually attended mid-tier, public institutions. The research explores links between college attendance and intergenerational mobility and finds that colleges rarely have both high rates of access to low-income students and high rates of postsecondary earnings success.
Using income (converted to 2015 dollars) from tax records of people born between 1980-82, Equality of Opportunity researchers calculated “access,” “success,” and “mobility” rates for each college in the U.S. that enrolled at least 100 students per incoming cohort. Here’s how they define each indicator:
- Access rate: Percent of students who were born to parents in the bottom income quintile (household earnings of about $25,000 or less)
- Success rate: Percent of students, among those born to parents in the bottom income quintile, who had earnings in the top quintile as adults (household earnings of about $88,600 or more at age 32-34).
- Mobility rate: Percent of students, among all students at an institution, who were born to parents in the bottom income quintile and had earnings in the top quintile as adults.
The pattern in North Carolina is consistent with these broader findings across U.S. colleges:
- Elizabeth City State University enrolled the largest percentage of low-income students (32.1 percent), but had only a small share of such students rise to the top of the income distribution as adults (12.5 percent)
- Duke University enrolled the smallest percentage of low-income students (3.2 percent), but had the largest share of low-income students rise to the top as adults (50.4 percent).
If we look beyond mobility into the topmost quintile of income earners, we see that Elizabeth City State University students had a 34 percent chance and Duke University students had a 61 percent chance of rising to the top 40 percent (household income of approximately $52,000 or higher). If we look even broader at those who make it from the bottom into the top 60 percent (household income approximately $29,000 or more), the chances even out to 71 percent and 74 percent, respectively.
Click on the images to enlarge
While it’s clear that the chances of becoming rich are higher at an elite university, if we look at odds of moving from the bottom into the top three quintiles, it is not necessarily the case that elite universities are the best vehicles for upward economic mobility or that they move the largest share of low-income students out of poverty. In fact, students who attended more elite institutions comprise a smaller share of those who made it out of the bottom than those who attended less selective colleges.
Duke University enrolled 48 low-income students with:
- 24 moving to the top 20 percent
- 29 to the top 40 percent
- 34 to the top 60 percent
Elizabeth City State University enrolled 107 low-income students with:
- 13 moving to the top 20 percent
- 36 to the top 40 percent
- 79 (more than double that of Duke!) to the top 60 percent
Despite the fact that Elizabeth City State University enrolled far fewer students, they enrolled more low-income students and more of these students rose to the upper 40 percent and 60 percent than Duke University. But, in looking at the extremes of access and success among low-income students, we are still missing an even larger point: low-income students who attended less selective, public institutions comprise a larger share of upwardly mobile adults. North Carolina Agricultural & Technical State University had more than double the number of low-income students rise to the top 60 percent as adults (188 students) than Elizabeth City State University, as did Fayetteville Technical Community College (160 students).
Click on the images to enlarge
So, if you are able to get into an elite institution (and that’s a very big “if” for low-income students), they will likely offer you the best chance of reaching the very top. However, since postsecondary education is one of the primary vehicles for upward mobility, we need to be clear about which schools are facilitating these opportunities for more than just a select few. It’s tempting to see the success of low-income students at elite universities and look to them as models of mobility, but this outcome should come as no surprise given institutional and student-body access to relatively larger amounts of financial, social, and cultural capital. Instead, we should be taking a closer look at the mid-tier, public colleges that send the largest share of low-income students to the middle and upper income brackets, providing broader access to economic mobility–and with significantly fewer resources.
Considering the decline in public funding for higher education in recent years, we likely can’t rely on additional federal and state dollars to compensate for the resource divide between elite universities and mid-tier public colleges, but we can investigate what is unique to those institutions that are able to maintain both high levels of access and postsecondary success.
If you’ve watched TV (or been exposed to any online advertising) in the last couple of months, you’ve almost certainly seen one of my favorite actors (and fellow Mizzou alumnus) John Hamm serve as the pitchman for a series of commercial spots promoting the tax services of H&R Block. April 15th is just around the corner!
Using slick advertising (explosions, zombies, and period-costumes) that will remind viewers of the hit TV show he is best known for, Mad Men, Hamm urges the viewer: “Don’t just get your taxes done, get your taxes won!”
Normally, I would give Hamm a pass on his role as a product pitchman; after all what celebrity hasn’t tried to benefit from their status? However, my years on MDC’s economic security team have brought me face-to-face with tax preparation business practices that prey on low-income working families by charging exorbitant fees. Those questionable fees and practices have taken a large bite out of one of our country’s largest anti-poverty programs: the Earned Income Tax Credit (EITC).
Quick primer on the Earned Income Tax Credit
The EITC is one of the few federal programs that have received bi-partisan support since its initial passage. Signed into law under President Ford, and expanded by Presidents Reagan, Clinton, Bush, and Obama, the EITC has had a significant impact on reducing poverty. In fact, President Reagan referred to the EITC as “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.” Analysis by The Brookings Institution found that from 2009 to 2011, 2.2 million Southerners were kept out of poverty by the EITC alone.
For the 2016 tax year, as shown in the chart below from the Center on Budget and Policy Priorities, a single parent with two children that has gross household income between roughly $14,000 and $18,000 may be eligible for the maximum credit of $5,572. Similarly, a married couple with two children and income between roughly $14,000 and $24,000 may be eligible for that same maximum credit. For families living paycheck-to-paycheck, the promise of a significant cash infusion from the EITC each year too often masks the effect of the cut that paid preparers take for their services. The magnitude of the tax refund dollars (driven primarily by the refundable EITC) that are diverted from our country’s low-income tax filers is astounding.
Source: Center for Budget and Policy Priorities
In tax year 2014, 49 percent of North Carolina’s tax filers claiming the Earned Income Tax Credit used paid preparers. Using a conservative estimate for the average tax preparation fee of $200, over $91 million dollars were diverted from low-income households. Does $200 for tax preparation assistance sound egregious to you? Well, keep in mind that 60 percent of EITC-claiming tax households make less than $20,000 in adjusted gross income for the year. According to the NC Justice Center, the value of tax refunds diverted to paid preparers is equal to 85 percent of what the state of North Carolina spent on a state-based version of the EITC in 2014 before the General Assembly ended the program ($107 million).
While the tax preparation industry has shifted a good chunk of its advertising to its online products (which typically offer lower prices with fine-print caveats), brick and mortar stores are still where a large proportion of low-income households file their taxes. Most of the largest tax preparation firms operate a franchise model lending the weight of their corporate name to independent operators in communities across the country. These in-person locations typically charge consumers much higher rates to file their state and federal returns – and often charge extra for consumers claiming the EITC or to complete the necessary forms that to reconcile tax credits (financial assistance) received through the Affordable Care Act.
The high rates low-income households pay to meet their tax filing obligation isn’t the whole story. Consumer advocates have raised concerns about the lack of oversight and standards for the paid-preparer industry, but have not succeeded in securing protections against predatory practice. In testimony to the U.S. Senate Committee on Finance in 2014, Chi Chi Wu from the National Consumer Law Center noted that while CPAs, enrolled agents, and volunteers with the Volunteer Income Tax Assistance Program must complete testing and operate under strict regulatory oversight, private preparers can open businesses and operate without licensing or regulation.
Liberty Tax Service, recognized by the chain’s prominent use of contractors dressed up like the Statue of Liberty roaming strip mall parking lots and busy street corners, promises prospective business owners that with a $40,000 franchise fee (and other associated start-up and operations costs) in as little as 60-90 days anyone can begin helping consumers file their most sensitive and important financial documents. Last year, an article by The Virginian-Pilot highlighted dozens of lawsuits and forced closures of franchise locations between 2014 and 2016. In at least one these cases, a franchise owner with 50 locations had his e-filing privileges suspended in connection to reports of widespread fraudulent returns.
Another prominent national chain, Jackson Hewitt, was the focus of a recent local news story out of Knoxville, TN where a local independent contractor purportedly charged a mother of two who only earns a little over $25,000 roughly $600 to prepare a simple two-page return. According to the statement from the corporate office, the error was simply a lack of communication with its franchise operators about the fee caps on preparation services.
Strengthening our civic infrastructure for the low-income tax-filer
While the tax filing season is winding down, Southern communities should take the time to reflect on the important role that free tax preparation programs (both in-person and online) play in ensuring upward economic mobility for hard-working, low-income families. While large corporate tax-filing companies like H&R Block may have the most effective and beautifully crafted commercials (and John Hamm), they clearly don’t provide the best service for our region’s working poor. Instead, we should be looking to leaders in the South, like MDC’s Board Member Stephen Black of Impact America, that refuse to accept the current realities of the massive redistribution of the EITC to the paid preparer industry. In 2016, Mr. Black’s SaveFirst initiative supported a cadre of 675 IRS-certified student volunteers from universities across the South in completing nearly 16,000 tax returns and assisting clients in securing more than $20.4 million in tax refunds. Similar models of free tax preparation are offered by local volunteers (the majority of whom are retired CPAs) at VITA locations (the IRS Volunteer Income Tax Assistance Program). For consumers that prefer the independence of filing their return online, there are free tax-filing programs like The Benefit Bank or free programs that are verified by your state’s department of revenue. While programs like VITA and The Benefit Bank may be lesser known, and have much smaller marketing budgets than their commercial counterparts, they are providing valuable high-quality assistance to the working households in your community striving to achieve economic mobility.