The Poverty Problem in the Rural Mountain Communities of WNC

The Poverty Problem in the Rural Mountain Communities of WNC

Image Source: Wikimedia/ Ken Thomas

What does poverty in the U.S. look like? For many, the image of poverty is urban. It’s the ghettos, the projects, the subway peddlers and the janitors trying to make ends meet. But in rural Appalachia, poverty has a different face. It’s the farmer losing the land that has been in his family for generations. It’s the parent that works in a factory that will be moving its operations overseas. It’s the reality that a living wage is simply out of reach.

In 2012, the average poverty rate in the rural counties of Western North Carolina was 20.3 percent. This represents an increase of 6.3 percentage points over the past decade. While urban WNC had typically recorded poverty rates similar to statewide rates, the rural communities of the region show elevated poverty levels that are indicative of struggling mountain communities.

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Since 2003, the gap has widened between poverty levels nationwide and those in rural WNC. Within the span of a decade, these rural communities went from 1.5 points above the national average in 2003 to 4.4 points above in 2012.

Mitchell County resident, Kat Gouveia said, “The cost of living keeps climbing. I sometimes have such a feeling of hopelessness.” Gouveia is part of the long-term unemployed population who has been unable to find work due the lack of available opportunities. “Mostly it is degrading to be unemployed; then coupled with the financial stress, [it’s] overwhelming to say the least. Most employers only offer 12-15 hours a week.”

Living in a remote location often means that having a vehicle is an essential expense. “There is also no public transportation in these mountains. Gas is high if you do have transportation.” Gouveia continued, “I can only leave my house once every few weeks; I have to stay local.” The remote location and reliance on transportation can be isolating. “When you are unemployed and do not have much of an income you eventually get disconnected from friends,” said Gouveia. “This happened to me– probably due to depression.”

Geographically, we see roughly a higher poverty rating in counties farther from the metropolitan hub of Buncombe County. This trend correlates to the supposition that isolation and access are infrastructure challenges connected to poverty levels.

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The lowest poverty rates in the region were in Transylvania and Henderson counties, both ranking just below the national level.

Watauga County recorded the highest level in the area with 29.5 percent of the population living in poverty. The county is home to Appalachian State University which may be influencing this high poverty rate due to the impact of a large college population on an otherwise low-populated county. The influence of the college is substantiated by the demographic that nearly 40 percent of those living in poverty in Watauga County have had some college education.

The county in the region with the second highest poverty rate is Cherokee County at a 25.1 percent. This was a significant increase from a 2011 poverty rate of 18.0 percent. In this county, the average annual wage across all sectors of employment was $33,000 or lower in 2011.

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William Morris Log Cabin, Saluda, N.C. (Library of Congress)


Trends in Poverty

Rural poverty in the South is a persistent and systematic problem. The USDA reports that in 2012, the rural south averaged 22.1 percent poverty compared to between 13.6 percent and 16.2 percent in other rural regions of the country.

As the nation celebrates the 50th anniversary of the War on Poverty, it is impetus to look at the historical context.

Patrick Woodie, the Interim President of the N.C. Rural Economic Development Center, explains:

If we went back to the late 1990s, early 2000s, and asked the same question, we would have observed numbers that were very much lower than the mid-60s numbers and we would have then drawn the conclusion that we made a lot of progress… I think at one point the state poverty average came down from I think 20 percent to less than 15 percent, around 14 percent at its lowest point. And then really a lot began to happen with the economy with the recession of 2000 and 2001.

You can look historically at past recessions, the post WWII recessions, and they all looked pretty much alike. You had a dramatic dip for a relatively short duration and the economy bounced back fairly quickly to pre-recession levels and sort of continued to improve and to climb. But beginning with the 2000/2001 recession, that rebound didn’t really occur. And the lack of a rebound is even more pronounced when we look at the 2008 Great Recession.

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Although poverty rates dropped rapidly after the War on Poverty began in 1964, recent years have seen steady increases.

Of note, the federal government does not identify poverty solely by household income. Instead, it is a combination of household income, number of people in a household and the ages of household members. Based on the combination of these factors, in 2012 the poverty threshold ranged between incomes of $11,011 for one individual over 65 years old and $51,095 for a household with nine or more people including one minor.

The Working Poor

Although the poverty figures in our communities are high, they may actually underestimate the population of people living in need.

In the 11th Congressional District of North Carolina, 43 percent of households that participated in the Supplemental Nutrition Assistance Program (SNAP) during fiscal year 2011 were above the poverty line. This equates to more than 15,000 people who are not considered to be in poverty but who are still unable to make ends meet.

Of the 35,257 households in this congressional district who do receive food assistance, only 22.6 percent of households recorded no employment during the previous 12 months. The remaining 77.4 percent of those receiving assistance had some type of employment during the year.

Asheville organization, Just Economics, is addressing the struggles of the working poor by advocating for a living wage. According to their definition, a living wage is “the minimum amount that a worker must earn to afford his or her basic necessities, without public or private assistance.”

Since 2009, the national minimum wage has been $7.25 per hour. Calculating 40 hours per week at 52 weeks a year, this totals an annual wage of $15,080 before taxes. Just Economics identifies a 2013 living wage for a single individual living in Western North Carolina to be several dollars higher at $11.85 per hour without benefits or $10.35 per hour with employer-provided health insurance. Annually, this totals between $21,528 and $24,648, nearly $10,000 higher than minimum wage.

The organization’s Executive Director, Vicki Meath, commented, “We define poverty as being below the federal poverty guidelines. But when we actually looked, people aren’t meeting their basic needs until they were at least somewhere about 200 percent of the guidelines for their family size, we get a much greater understanding of how many people in our communities are struggling.” Meath explained, “100 percent and 200 percent of the federal poverty guidelines are major markers for eligibility for certain programs like food stamps and housing assistance.”

In his book, The Working Poor, David Shipler explains how the poverty thresholds are calculated:

“The federal poverty line cuts far below the amount needed for a decent living, because the Census Bureau still uses the basic formula designed in 1964 by the Social Security Administration, with four modest revisions in subsequent years. That sets the poverty level at approximately three times the cost of a ‘thrifty food basket.’ The calculation was derived from spending patterns in 1955, when the average family used about one-third of its income for food. It is no longer valid today, when the average family spends only one-sixth of its budget for food, but the government continues to multiply the cost of a ‘thrifty food basket’ by three, adjusting for inflation only and overlooking nearly half a century of dramatically changing lifestyles.”

Just Economics states that in Buncombe County, 34 percent of low-wage workers are employed in food service occupations and 22 percent are retail sales workers. “These jobs pay between $8 and $10/hour and typically don’t offer benefits of any kind.”

In the area’s rural counties, wages tend to be lower than those in urban areas, and often, living costs are also lower. However, these remote areas are likely seeing fewer opportunities and stagnant job markets.

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The transportation and utility sector is a high employer across rural WNC counties. The sector averaged 18 percent of employment in these counties at $26,785 in 2011 annual wages. However, transportation and utility was not the lowest average wage for the region. Arts and entertainment averaged $21,144 followed by the retail sector at $21,890.

Mitchell County is the only county with any significant employment in the mining sector. At eight percent of the county’s employment, this sector had negligible impact on the region as a whole, but these mining jobs averaged salaries of $61,979, some of the highest in the region.

Manufacturing remains strong in McDowell County and accounts for 33 percent of the county’s employment with average annual wages of $39,092. This is slightly higher than the regional average of $36,669 in wages for jobs in the manufacturing sector.

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Spruce Pine Railway (Wikimedia/ Ken Thomas)


The Changing Rural Economy

Nationwide, rural economies are shifting. Business trends and changes in the job market are altering how rural populations earn their living.

Patrick Woodie of the N.C. Rural Economic Development Center had insight as to why one sector of the region’s rural economy is of interest to the organization:

Historically, and it comes as no surprise, but rural North Carolina has greater health care needs and less of an ability to recruit health care professionals then our urban counterparts so there is certainly a recognized need to improve access to healthcare in rural communities. And secondly, it was the only sector of the economy from 2008 to 2012 that added jobs in rural communities. And one of the advantages of the health care sector is that there’s a lot of entry points and there’s a lot of career pathways once a worker is in the health care sector. (pause) And I’ll be the first to acknowledge that some of the entry-level jobs certainly would not compare to a manufacturing job and would be a struggle to really provide a living wage for a small family.

Because the rural counties in WNC have more than 25 persons per square mile, the White House uses the classifier of “high density rural.” In their nationwide analysis, the White House reports significant change in several employment categories of high-density rural communities. Since 1970, farming and manufacturing have both decreased significantly. However, the services sector has grown over the same time period.

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Patrick Woodie shared a first-hand experience of how rural economies and job opportunities in WNC are changing:

I graduated High School in the early 1980s. It wasn’t all that long ago, but I can even go back to that time and know that classmates of mine coming out of High School had the choice certainly of higher education, going to a community college or going to a university, but they also, as recent as that, had the option of going to work in one of several factories in town and staying there, like their parent’s did for the next 30 – 40 years. And that really was a common thing that occurred for many of those folks. And it really went away beginning with the 2000-2001 recession and really with the opening up of the entire globe to more competition and freer competition.

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Marshall Milling Company Gristmill and Capitola Manufacturing Company along the French Broad River in 1982 (Library of Congress)

With shrinking employment in manufacturing and very few large corporations in the region, small businesses remain in the majority. They are driving the rural economy both through the number of individual businesses as well as through the number of workers they employ. On average in rural WNC, businesses with more than 100 workers employ only 25.3 percent of job holders. However, businesses with fewer than 19 employees account for 49.7 percent of the workforce.

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There are only a handful of counties where big businesses are the majority. In McDowell County, big business takes the form of manufacturing companies such as Ethan Allen, Baxter Healthcare, Coats American, Rock Tenn Services and Columbia Carolina. And in Mitchell County, mining operations are managed by large corporations who have locations around the globe.

The large number of small businesses is a sign of an entrepreneurial spirit. These small businesses have become a necessity when large corporations have fewer jobs available then the number of job seekers.

Both nationally and regionally, rural unemployment tends to be higher than unemployment in urban areas.

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As seen in the above graph, the unemployment spike of 2008 and 2009 was significant for both rural and urban areas of the region, but the spike was steeper for rural counties. Before the recession, these counties were already tracking higher unemployment, but rates were slowly declining. Following the recession, the gap between rural and urban became significantly wider. With indications of recovery, 2013 saw the lowest unemployment in rural WNC since the 2009 spike.

However, the USDA explains that the nation’s recent drop in rural unemployment is not a result of more people working, but instead, it results from the combination of stagnant job growth and population decreases as people relocate to urban areas. The report states, “In nonmetro areas, the recent decline in unemployment rates is due to a reduction in the rate of labor force participation (the share of the adult population that is working or looking for work), rather than an increase in employment.”

Analysts have commented that since the recession, rural areas have been slower to recover then urban locations. According to Todd Cherry at the Center for Economic Research and Policy Analysis at Appalachian State University, a slow recovery was also the case following the 2001 recession. In a 2009 report, Cherry states, “During the [2001] recession, the WNC [region] experienced job losses that were three times greater in percentage terms than the state and nation. The brunt of the regional job losses was felt in the rural counties and the foothills—particularly the Hickory area.” The report continues, “WNC and many rural areas of the state are not experiencing the same economic prosperity as NC’s urban centers.”


The Effects of Poverty on Daily Life

Combining the economic depression of the rural WNC counties with isolation and infrastructure challenges can result in a difficult situation for residents of these communities. Across areas of healthcare, education, food security and other basic needs, many remote locations fall short compared to their urban counterparts.

Even a basic need such as access to healthcare can be a challenge. Whereas Buncombe County has more than 35 physicians per 10,000 people, both Graham and Clay counties have less than 5 physicians per 10,000 people.

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Education
Reports show that High School dropout rates are higher for those living in poverty. The North Carolina Department of Public Instruction states that 22.7 percent of students from economically disadvantaged households drop out as compared to 10.1 percent of wealthier households.

Additionally, educational attainment is a demographic trend for area residents living in poverty. The graphic below shows that in most counties, those below the poverty line have a larger percentage of lower education attainment. When compared to the demographics of those living above the poverty line, we see a greater percentage of the population at a higher education level.

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For regional residents below the poverty line, most counties show that more than half of residents have High School education levels or less. The anomaly to this pattern is Watauga and Polk counties. Watauga is the home to Appalachian State University, and in this county we see a large portion of those living in poverty to have some college education.

Rural Neighbors
Living in a small community, one’s personal financial struggles can become very public. While in some situations, the community can be a source of support for those who are in need, this is not always the case. In a recent presentation at the Yancey County library, Food not Bombs co-founder Keith McHenry spoke to the embarrassment of being hungry in a rural community. In McHenry’s work feeding the hungry, he has found that it is important in rural settings to create a festive atmosphere that blurs the lines between those who are eating the meals because they are hungry and those who are attending the event to socialize.

Following up by phone, McHenry shared that while working to feed the hungry, he sees how poverty in rural communities take a different shape then in urban areas. “In rural areas, people can mostly keep their houses going, but there were three or four people who eat with us, their hands were frostbitten in the winter because they couldn’t afford heat. Their fingers would be blackened from that. I started to notice people holding the bowls, and they all had frostbitten hands. It’s a different phenomenon then it is when you’re in a city, where there are homeless services and soup kitchens.”

What rural WNC lacks in infrastructure, public support and assistance, it makes up for in its beautiful mountain landscape that draws millions of tourists every year. The Great Smoky Mountains National Park on the border of N.C. and T.N reported the highest visitation of any national park with 9.4 million visits in 2010, more than double the number of visitors to the Grand Canyon.

The area’s mountains are home to the highest peak east of the Mississippi and many wonderful folk who are making a life despite how challenging it is to make a living.

As economist Todd Cherry explains in his 2009 report, “The divide between rural and urban areas in N.C. deserves attention from policymakers because the degree that we effectively use the resources in rural N.C. will significantly impact the future of N.C.’s economy.”

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Saluda, N.C. Cabin in 1939 (Wikimedia/ U.S. Farm Security Administration)

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