Recent Census numbers suggest ‘catastrophic’ jump in poverty

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The sell-off of Lorillard Tobacco and reduction of hours at the plant is emblematic of the precarity of employment in Greensboro. (photo by Jordan Green)

Some question whether poverty actually jumped 6.6 points from 2015 to 2016, but no one doubts that poverty is a stubborn challenge for Greensboro. And there are troubling signs that part-time work and depressed wages are holding workers back.

When Planning Director Sue Schwartz saw the most recent 1-year estimate released by the Census for the city of Greensboro last month, she was astonished. The latest numbers show the poverty rate jumping by 6.6 points from 2015 to 2016, from 16.2 percent to 22.8 percent.

“This looks like something catastrophic,” she said. “It’s like something you would expect to see in a city where there had been multiple plant closings. You would expect to see this in New Orleans after Hurricane Katrina, or some towns in Florida. We haven’t gone through anything like that.”

As Schwartz reported to City Manager Jim Westmoreland and Assistant City Manager Barbara Harris in a Sept. 29 memo, city planners consulted the American Planning Association and the Urban Institute at UNC Charlotte for help understanding the numbers. Schwartz’s memo pointed to other data that she said “paint a different picture.” The city’s unemployment rate hovered around 5 percent for the past few years, she said, adding that Greensboro’s labor force of 146,267 is the largest it’s been since the Bureau of Labor Statistics started keeping numbers in 1990. And the same numbers that indicated a significant jump in poverty provide “contradictory” information on growth, with population rising slightly while the number of households, housing units and families went down.

“While it is probable the poverty rate for the city of Greensboro has increased in 2016, it is the magnitude of this increase that is in question given the other economic indicators for the same time period,” Schwartz wrote. “Contacts at both APA and the Urban Institute speculated this could be a sampling anomaly given the other economic data.”

The new poverty rate comes at an inopportune time for Mayor Nancy Vaughan, who is up for re-election on Nov. 7, with early voting already underway. Further compounding the perception of economic distress, Vaughan received the unwelcome news last week that International Textile Group is shuttering its flagship White Oak Cone Denim plant in Greensboro, eliminating about 200 jobs. Among North Carolina’s five largest cities, Greensboro is the only one that charted an increase in poverty.

“We are extremely concerned about such a large jump,” Vaughan said. “We’ve never had such a large jump, even during the recession.

“We’re going to continue an aggressive program to make sure everyone prospers,” the mayor added. “We’re focusing on workforce development, and developing a favorable climate for small business and medium-sized businesses. This is something that has our full attention. We know it’s really increasing wages that’s going to make a difference.”

Andrew Brod, senior research fellow in UNCG’s Center for Business and Economic Research who reviewed the new Census numbers for Triad City Beat, said the reported 6.2 percent jump in poverty appears to be a function of “sampling error.” He noted that the 2015 estimate of 16.2 percent seems abnormally low, following the previous five years at which it hovered around 20 percent. Brod said the 3- to 5-year averages released by the Census Bureau are typically more reliable. Based on the 5-year average from 2011 through 2015, the poverty rate appears to be stuck at a stubborn 20 percent, comparable to Durham, favorable to Winston-Salem’s 24.8 percent rate, and worse than Raleigh and Charlotte, with 16.0 percent and 16.8 percent respectively.

“My overall take is that things are not going well in the Greensboro economy, and it’s fair to wonder why the poverty rate hasn’t fallen as the national expansion passes the 8-year mark,” Brod said in a Facebook message. “But I don’t think it’s fair to conclude that things suddenly got worse, based on 1-year city-level Census data. I don’t believe that Greensboro’s poverty rate fell sharply in 2015, and I don’t believe it shot up again in 2016. The usual approach would get around this problem.”

In a column published in the Triad Business Journal in July, Brod wrote that the Greensboro-High Point and Winston-Salem metro areas are more like rural North Carolina in terms of job growth than “high flyers” Raleigh and Charlotte, adding that the Triad cities “face long-term structural challenges related to declining manufacturing industries.”

While Brod is skeptical of the lurch represented by the 1-year estimates in 2015 -16, John Quinterno, a Chapel Hill-based economic research consultant and visiting lecturer at the Sanford School of Public Policy at Duke University, said the 2016 data is “highly reliable.” He noted that the Census reports a margin of error of 2.4 points, meaning that “there is a 90 percent chance that the true value lies somewhere between 20.8 percent and 25.2 percent.” He added that the “the increase from 2015 was indeed statistically significant. You can be 90 percent certain, then, that the observed difference is due to something other than chance.”

Quinterno pointed to an increase in the number of part-time workers in Greensboro as a possible explanation for the 1-year lurch in the poverty rate. While the Census reported that the number of people 16 years and older who worked part-time or part-year in the past 12 months increased from 47,677 in 2015 to 54,097 in 2016, the percentage of part-timers in poverty increased from 21.7 percent to 31.8 percent over the same period. While the part-time workers increased, the number of full-time workers and people who didn’t work at all each went down.

“You have a movement of people from full-time to part-time and people who have been out of the workforce coming into it,” Quinterno said. “There are some people coming on to the ladder and some people moving down the ladder.”

Sarah Glover, manager of community impact for the United Way of Greater Greensboro, said the part-time work explanation makes sense. In 2014, the agency realigned its mission to make reducing poverty its sole focus.

“The shift from full-time to part-time work rings true based on what I’ve heard in the community,” Glover said. “I’m hearing a lot of people who want to work saying they’re not seeing enough hours.”

Ed Whitfield, a co-managing director of the Fund for Democratic Communities — a private foundation that helped establish the Renaissance Community Cooperative — says there’s a name for people who are stuck in part-time work: “the precariat,” or members of the proletariat class who find themselves in precarious circumstances.

“There are a lot of people working two and three jobs trying to piece together the compensation that someone would expect from one job,” Whitfield said. “It’s weird how well the stock market is doing, but the actual situation for a lot of people in the workforce is pretty dire. There’s very little unemployment; under-employment is more the issue. A lot of people have given up on working, or they’re working two or three jobs.”

Whitfield said Lorillard Tobacco, which was bought by Reynolds American in 2014 and then broken up and re-sold to Imperial Brands, is emblematic of the challenges experienced by manufacturing workers in Greensboro.

“That was once the paragon of a good job,” Whitfield said. “The union there feels under attack. They cut back on production, and folks are not comfortable with the hours they’re getting.”

He added that the biggest employers in Greensboro are universities, hospitals and local government.

“Once you get out of that,” Whitfield said, “it’s a very precarious environment.”

Mayor Nancy Vaughan said regardless of the reliability of the 2016 Census numbers, “We’re not just saying it’s a mistake. We’re looking at them and taking them seriously.”

For one city council contender, at-large candidate Michelle Kennedy, poverty is a familiar subject. As executive director of the Interactive Resource Center, which serves people experiencing homelessness or who are at risk of becoming homeless, Kennedy said her agency’s numbers are not going down and staff are continuously seeing new guests.

“This is not a surprise when you’ve been in this work,” Kennedy said. “We know that we have an issue with affordable housing. We have an issue with living-wage employment. We have an issue with trying to connect workers to jobs.”

Vaughan and other candidates for city council advocate similar ideas for promoting job growth to curb poverty — “a multi-pronged approach” in Vaughan’s parlance; “all hands on deck,” as District 4 candidate Gary Kenton puts it; and a “both-and approach,” according to at-large candidate Dave Wils.

“We are looking at healthcare, aviation and advance manufacturing,” Vaughan said. “Those are the type of jobs that will rival the jobs of old. We also learned a lesson that we can’t put all our eggs in one basket. Just last week, we saw another result of NAFTA with the White Oak plant closing. We need to focus on small business and homegrown business.”

The Rev. Diane Moffett, Vaughan’s opponent in the mayoral race, said the primary focus of her campaign is poverty, and how it relates to crime and hopelessness. As mayor, she said her first order of business would be to assess what programs are working well to address poverty, and that she would strengthen the city’s relationship with United Way.

“We need to encourage people to help,” Moffett said. “There are people who would love to. They just don’t know what they can do, and they’re isolated. The leadership is important.”

Marikay Abuzuaiter, who is running for her fourth term at-large on council, highlighted the city’s 20 percent poverty rate during an unsuccessful campaign in 2009. And in a recent campaign questionnaire, she cited poverty as the city’s biggest challenge.

“One in five people [being poor] — that’s much more than what we want to be,” Abuzuaiter said. She added, “I think we’re doing everything in our current power to reduce poverty. I just worry about what can we be doing more to see if there is some out-of-the-box thinking.”

Some of the city’s current efforts to reduce poverty include providing tax incentives to companies that pay good wages, realigning public transit to connect people with jobs, and promoting retraining so that residents are eligible for available jobs, Abuzuaiter said.

Kenton said the three issues that compelled him to run for council were poverty, race and jobs, which he considers to be interconnected.

“Inequality is on the rise, and poverty is not being alleviated,” he said. “This should be the No. 1 topic of discussion for city council every day.”

Kenton and Sharon Hightower, who is seeking her third term as representative of District 1, both cited the importance of increasing contracting opportunities for people of color through the city’s Minority & Women Business Enterprise program.

“We need to have open dialogue among all, including making sure when developers come in they know what our primary focus is — to provide them a good workforce and a place for people to live in affordable housing,” Hightower said. “Good schools for our kids. Healthy people so our people aren’t laying out of work. We have to make sure we set the right tone.”

  • Al McMullin Walle

    I thought the Greensboro Police Department turning calls against me here and there for the rich and white was rather unequal although I guess everyone paid equally through the nose for it.

  • Billy Jones

    But TCB fails to mention the one candidate who has been talking about this very problem for years, the one candidate who has offered real solutions to these problems– Why? Write-in Billy Jones for Mayor, write-in Thessa Pickett for District 2, vote the incumbents out of office and watch Greensboro come back to life again.

  • Nancy Lenk

    i would like to see the City use economic development money to help worker owned co-ops develop their businesses instead of trying to attract already wealthy corporations with huge tax breaks as incentives. If we have to bribe companies to come here, what loyalty will they have to our area? (Remember Dell) Greensboro needs to grow it’s own businesses that pay wages people can live on. Developing more hotels is not the answer since jobs generated after construction are low wage service jobs. Why not transform the White Oak Plant into something else like building solar panels, or windmills? We also need more affordable housing. There are many condemned boarded up homes in Southeast Greensboro. It is such a waste. We should offer incentives to the owners to sell them or fix them up to make affordable housing. We need to use the resources we have.

  • Frank Swanson

    Things were tough for a lot of people during the Obama years. The Affordable Care Act removed a great deal of disposable income from the average family. Plus, we need to remember that the definition of “poverty” changes every few years with an arbitrary number set to indicate a new poverty level. Most middle class families in the 1960’s and 1970’s, with the same lifestyle today, and even adjusting for inflation and higher wages, would be considered to have lived in abject poverty when seen against the current poverty level number.

  • Gunnar5

    The New York Times reported on Friday afternoon, October 27, that the U.S. economy grew at a 3% rate in the third quarter. “There are no real headwinds to growth for the first time since the expansion began,” said Mark Zandi, the chief economist of Moody’s Analytics. “We are at full employment and we are in full swing; let the good times roll.” There are reasons why the Triad is not participating in the national economic expansion. What are they? And why should poverty be UP in the Triad during an economic expansion?