Business Columns & Blogs

Born poor in NC? You’re like to stay that way – unless state makes changes

Of the many messages emerging from the recent elections, one theme stands out: unrest stemming from economic insecurity.

Across the country and North Carolina, our citizens are feeling extremely uneasy about their current and future economic prospects. This is true across geographic regions and demographic backgrounds, but is felt strongest within communities in the lowest socio-economic strata.

Addressing economic mobility is going to be one of the greatest challenges facing our state and nation.

According to a report from the Durham nonprofit MDC, North Carolina has one of the lowest economic mobility rates in the country. Specifically, if you are born into the lowest income level in our state, it is very unlikely that you will be able to earn your way into the middle class.

If you live in Raleigh, for example, and have a household income of less than $20,000 (which puts you in the lowest economic quintile in the state), there is a 5 percent chance that your children will be able to ascend to the highest quintile of $93,419 or more. In Charlotte, it’s even harder, with a 4.4 percent chance, and in Wilson, the lowest in the state, you have a 3 percent chance. To get to the middle quintile of $36,000 to $58,000 you have about a 25 percent chance. By contrast, there is a 40 percent chance of staying in your same quintile.

In short, for the majority of people in our state, your financial status when you are born often dictates where you will stay. Even more troubling: 60 percent of our citizens are barely making ends meet, according to minimum household income standards. No wonder there is discontent.

To get out of this mess, we need to connect more people to stable employment with livable wages. This requires education-to-career pathways that are rigorous, coherent, and well aligned to the shifting landscape of our future economy.

The report, “North Carolina’s Economic Imperative: Building an Infrastructure of Opportunity,” was commissioned by the John M. Belk Endowment and it recommends three steps for communities: creation and adoption of a guiding framework and common vision of inclusive economic productivity and advancement; design and implementation of a data-driven approach that realizes this vision through action that engages educators, employers, and the workforce and stresses rigorous evaluation; and commitment of resources necessary to achieve this vision.

While easy to describe, this approach is much harder to execute. Globalization, automation and the subsequent demand for a higher skilled workforce mean that our emerging workforce needs more training for fewer jobs. At one point, North Carolina had the most manufacturing jobs in the country. Now, communities can no longer rely on stand-by strategies to recruit new factories or companies to their town – especially if you are in a smaller city or rural area, rather than a large metro.

Part of this puzzle is addressed by helping communities foster more entrepreneurial activity and small business growth across all socio-economic and demographic strata. Done well, this can produce more opportunities for income generation and job creation.

Another strategy is to create stronger inroads into existing employers and ensure that the workforce (emerging, transitioning and displaced) is prepared to succeed in these jobs. This requires that our K-12 schools, community colleges and universities work in lock-step with employers to create a seamless pipeline so that our communities are considered talent developers.

The good news is that our high school graduation rates are going up. Additionally, a growing number of students are in dual-enrollment programs where they earn a high-school and associate’s degree upon graduation – a proven strategy for increasing employment readiness. Furthermore, 99 percent of North Carolinians live within a 30-minute drive of one of our state’s 58 community colleges (a critical partner in this effort).

Unfortunately, even with a high school degree, only 11 percent of our state’s students passed all of the subtests and the writing essay on the ACT College Admission Exam – a key indicator of students’ preparation to succeed in college. Passing rates are even lower for students of color. And a mere 21 percent of entry-level jobs requiring a high school degree or higher have a median hourly wage above the wage needed to support an adult and a child ($21.63).

In future columns, we will showcase promising efforts under way across the state to take on these challenges. But as the elections made clear, we clearly have our work cut out for us.

Christopher Gergen is a founding partner of HQ Community, a fellow in Innovation and Entrepreneurship at Duke University, and author of “Life Entrepreneurs: Ordinary People Creating Extraordinary Lives.” Stephen Martin is deputy chief of staff at the nonprofit Center for Creative Leadership in Greensboro. They can be reached at and followed on Twitter through @cgergen.