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Below the Line: Why the Official Poverty Numbers Don’t Tell the Truth About North Carolina

Genesis Value Studio by Genesis Value Studio
August 17, 2025
in Aging Policies
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Part I: The Day the Numbers Failed Me

For fifteen years, my world was built on the elegant certainty of numbers.

As a policy analyst, I believed that data was the bedrock of sound governance.

I built models, tracked trends, and presented reports to rooms of serious people in suits, confident that my charts and figures painted an accurate picture of our communities.

I spoke the language of percentages and poverty thresholds, and I believed it was the language of truth.

Then, one Tuesday afternoon in a stuffy county commission chamber, my entire professional worldview crumbled.

I was at the podium, clicking through a presentation that I was particularly proud of.

The data was clear: according to the latest federal figures, the poverty rate in this particular North Carolina county had declined by a modest but statistically significant 0.7 percentage points.1

It was a small victory, the kind of incremental progress that fills reports and justifies budgets.

I spoke of positive trends and effective interventions, my voice echoing with the detached authority of the analyst.

When I finished, a woman in the third row stood up.

She wasn’t a commissioner or a department head.

She was a single mother of two who worked as a certified nursing assistant.

She wasn’t on my charts.

Her income was just enough to place her family above the official poverty line, so in my neat and tidy dataset, she was a success story.

But her story was one of anything but success.

With a quiet, steady voice that cut through the room’s bureaucratic hum, she laid out her monthly budget.

She spoke of a paycheck that evaporated the moment it arrived.

She detailed the impossible calculus she performed every day: pay the electric bill or buy the full week’s groceries? Fill her son’s asthma prescription or put enough gas in the car to get to her second job? She talked about the gnawing stress of knowing that a single flat tire or a sick child meant total financial catastrophe.2

She wasn’t “poor” by our definition, but she was trapped in a state of profound and unrelenting economic hardship.

I stood there, my PowerPoint glowing uselessly behind me, and felt a wave of professional shame.

My numbers hadn’t just missed the nuance of her life; they had actively misrepresented her reality.

My report, which was meant to illuminate, had instead created a shadow in which this woman, and millions like her, were rendered statistically invisible.3

Her testimony shattered my faith in the data and set me on a new path.

It forced me to ask a question that has since defined my work: If the official poverty line doesn’t capture her struggle, then what is it actually measuring, and more importantly, what is it hiding?

The reliance on a single, simplistic metric like the Federal Poverty Level (FPL) by people like me—by policymakers and analysts—creates a dangerous blind spot.

It’s not merely a data problem; it’s a fundamental failure of policy and perspective.

My initial analysis treated the FPL as the definitive measure of hardship, the bright line between struggling and not.

But that mother’s testimony revealed the truth: you can be drowning financially long before you sink below that official line.

This means our entire public conversation about poverty, based on this flawed number, is itself flawed.

We are trying to solve a crisis without being able to see its true size or shape.

The problem isn’t just that the number is wrong; it’s that the number itself shapes a reality where a massive portion of public struggle is officially ignored, preventing the very policy solutions that are desperately needed.5

Part II: The Two Poverty Lines of North Carolina

To understand the depth of this disconnect, we must first acknowledge that there are two profoundly different poverty lines in North Carolina.

One is an official government statistic, a line in the sand drawn decades ago.

The other is the real-world cost of survival, a line that families must confront every single day.

The Official Line: A Relic of the Past

The first is the Federal Poverty Level (FPL), set annually by the U.S. Department of Health and Human Services (HHS).

This is the number that appears in government reports and determines eligibility for a vast array of assistance programs.

It is adjusted for inflation each year, but as we will see, the foundation of the number itself is critically flawed.

North Carolina, like 47 other states, uses these federal guidelines directly.6

For 2024, the FPL for a family of four in North Carolina is an annual income of $31,200.6

The Reality Line: The True Cost of Survival

The second line is what it actually costs a family to meet its basic needs in North Carolina without any public or private assistance.

The NC Budget & Tax Center calculates this figure annually in its Living Income Standard (LIS).

This is not a measure of comfort or luxury; it is a meticulously calculated budget for necessities: housing, food, childcare, healthcare, transportation, taxes, and a tiny amount for savings.9

It represents the bare minimum income required for a safe and decent, yet modest, standard of living.

For 2025, the average Living Income Standard for a family of four (two adults, two children) in North Carolina is an annual income of $97,500.9

The chasm between these two numbers is not a rounding error; it is the defining feature of economic hardship in our state.

It is a gap of more than $66,000 for a family of four.

The table below starkly illustrates this reality gap, translating these annual figures into the hourly wages needed to survive versus the state’s stagnant minimum wage.

Household Size2024 Federal Poverty Line (FPL)2025 Living Income Standard (LIS)Hourly Wage per Adult for LISNC Minimum Wage
1 Adult$15,060~$47,000 (varies)~$22.60$7.25
1 Adult, 1 Child$20,440$75,470$36.30$7.25
2 Adults, 2 Children$31,200$97,550$23.40$7.25

Sources: HHS Poverty Guidelines, NC Budget & Tax Center 6

This table is more than just a set of numbers.

It is a portrait of a structural crisis.

It shows that for a family with two children, both parents would need to earn at least $23.40 per hour, working full-time, just to meet their most basic needs.

At North Carolina’s minimum wage of $7.25 per hour, that same family would earn just $30,160 annually if both adults worked full-time—an income that leaves them below even the woefully inadequate federal poverty line.9

The math makes the conclusion inescapable: for hundreds of thousands of working families in North Carolina, survival is not a matter of better budgeting, but of confronting an impossible economic equation.

Part III: The Epiphany: Our Economic Thermometer is Broken

My journey to understand the chasm between the official poverty line and the reality of survival led me to a startling discovery about the FPL’s origins.

It is not a comprehensive measure of economic well-being.

It is, in fact, a fossil.

The formula was developed in the early 1960s by a Social Security Administration analyst named Mollie Orshansky.

She determined that the average American family at the time spent about one-third of its income on food.

She then took the cost of the U.S. Department of Agriculture’s “economy food plan”—a bare-bones diet for temporary or emergency use—and simply multiplied it by three.2

For over half a century, that has been the formula.

We take a 1960s grocery budget and adjust it for inflation.

That’s it.

This was my epiphany.

The Federal Poverty Line is like a faulty thermometer.

It was designed to measure only one thing—the cost of food in 1963—and then crudely estimate the entire economic climate.

It gives us a single, dangerously misleading number.

It might tell us the “temperature” is a mild 60 degrees Fahrenheit, while completely ignoring the brutal “wind chill” of modern housing costs, which now consume far more than a third of a family’s budget.

It fails to account for the “icy rain” of childcare expenses, a negligible cost for many families in the 1960s that has now become one of the largest budget items.

It ignores the “freezing ground” of healthcare bills, which have skyrocketed at a rate far outpacing inflation.

The “real-feel” economic temperature for millions of North Carolinians is far below freezing, but our primary measurement tool is stuck, hiding the severity of the storm.

While this thermometer is broken as a measure of actual poverty, it remains a critical bureaucratic tool.

Its primary function today is not to describe reality, but to determine eligibility.

Dozens of vital support programs in North Carolina use various multiples of the FPL as a hard cutoff.

To qualify for the full benefits of the Qualified Medicare Beneficiary (QMB) program, an individual’s income must be at or below 100% of the FPL.

For the Specified Low-Income Medicare Beneficiary (SLMB) program, the line is 120%.

For a Qualifying Individual (QI), it’s 135%.8

Medicaid eligibility for adults in North Carolina is set at 138% of the FPL, while the Children’s Health Insurance Program (CHIP) serves children in families up to 211% of the FPL.8

Programs like the Low Income Home Energy Assistance Program (LIHEAP) and the Crisis Intervention Program (CIP) often use 150% of the FPL as their threshold.12

This rigid, numbers-based system creates terrifying “benefits cliffs.” A raise of a dollar an hour at work—a moment that should be a celebration of progress—can push a family’s income from 135% of the FPL to 140%, causing them to lose thousands of dollars in healthcare subsidies or childcare assistance.

They become poorer by earning more.

This reveals a deeper, more troubling truth.

The continued use of the FPL is not simply due to bureaucratic inertia.

It functions as a political and budgetary containment mechanism.

By officially defining poverty at such an artificially low level, it systematically limits the number of people who are counted as “poor” and, therefore, the number of people eligible for aid.

This controls government spending and allows policymakers to report reassuringly low poverty rates, all while the real-feel economic crisis worsens.

To update the thermometer to reflect the true cost of living would be to admit the true scale of the problem, a political and fiscal reckoning that, for decades, our leaders have been unwilling to face.

Part IV: Deconstructing the “Real-Feel” Economy: The True Cost of Surviving in North Carolina

To truly grasp why the Federal Poverty Line fails, we must dissect the real-world costs it ignores.

Using our analogy, we need to analyze the individual weather elements that combine to create the brutal “real-feel” economic temperature for North Carolina families.

The Living Income Standard provides the blueprint for this analysis, showing that survival is not about one cost, but the crushing weight of them all.

Pillar 1: The Wind Chill of Housing

In the 1960s, housing was a manageable part of the family budget.

Today, it is the single greatest financial pressure for most low- and middle-income North Carolinians.

The median monthly mortgage cost in the state is $1,397, and the median gross rent is $1,162.14

For a family of four living at the FPL, their

entire monthly income is just $2,600.6

This means that an average apartment can consume nearly half of their pre-tax income.

This reality forces families into the precarious state of being “rent-burdened,” defined as spending over 30% of income on housing.

For those at or near the poverty line, this isn’t a risk; it’s a certainty.

A staggering 46% of all renter households in North Carolina are rent-burdened, and more than one in five are “severely rent-burdened,” spending over half their income just to keep a roof over their heads.16

The FPL’s implicit allowance for housing is a relic of a bygone era; today, the cost of shelter alone can push a family to the brink, making the FPL less a measure of poverty and more a measure of imminent homelessness risk.

This pressure also varies dramatically across the state.

The annual income needed to afford the basics for a family of four ranges from just over $77,000 in a rural county like Halifax to nearly $113,000 in a suburban county like Union, driven largely by differences in housing costs.9

Pillar 2: The Childcare & Healthcare Blizzard

Two of the most significant costs for modern families—and two that have risen far faster than inflation—are childcare and healthcare.

The FPL’s 1960s formula makes no meaningful provision for either.

The NC Budget & Tax Center’s LIS estimates that a family with two children needs an average of $1,630 per month for childcare and $1,390 per month for healthcare.9

The numbers tell an impossible story.

The combined monthly cost of just childcare and healthcare ($3,020) is more than the total monthly income of a family of four at the poverty line ($2,600).

This isn’t a tight budget; it’s a mathematical impossibility.

This economic blizzard has a disproportionate impact on women, who still bear the majority of caregiving responsibilities.

Faced with childcare costs that can exceed their entire take-home pay, many mothers are forced to reduce their hours or leave the workforce entirely, depressing their lifetime earnings and deepening family poverty.4

Similarly, while healthcare costs in North Carolina are about 4% higher than the national average, they are a crushing burden for low-wage workers whose jobs often lack benefits.18

Pillar 3: The High Price of a Full Plate & Getting to Work

Ironically, the one area the FPL was designed to measure—food—is also an area where its assumptions fall short.

While North Carolina’s grocery prices are around the national average, the cost of a healthy diet far exceeds what a poverty-level budget can sustain.14

This is evidenced by the state’s high rate of food insecurity, which affects 14.6% of the population.20

In many poorer counties in the eastern and western parts of the state, that rate approaches or exceeds 20%.21

Furthermore, the FPL completely ignores transportation, a non-negotiable expense for nearly every working family in a state with limited public transit.

The LIS allocates an average of $720 per month for transportation for a family of four.9

For a family at the poverty line, this single cost would consume over a quarter of their monthly income.

When all these elements of the “real-feel” economy are combined, the picture becomes devastatingly clear.

The following table synthesizes these costs into a simple monthly budget, demonstrating why the official poverty line is not a measure of struggle, but a recipe for failure.

Monthly Budget ItemFamily of 4 at 100% FPLFamily of 4 at Living Income Standard (LIS)
Gross Monthly Income$2,600$8,130
Housing$1,162 (Median Rent)$1,410
ChildcareN/A (Unaffordable)$1,630
Food$920$920
Healthcare$1,390$1,390
Transportation$720$720
Total Monthly Expenses$4,192$6,070
Monthly Surplus / (Deficit)($1,592)$2,060

Sources: HHS, NC Budget & Tax Center, U.S. Census.6

Note: FPL budget shows costs of basic needs, not what is affordable on that income.

LIS budget includes taxes and savings, which are excluded here for direct comparison of core expenses.

This is the impossible budget.

The deficit line for the FPL column is the mathematical proof of this report’s central thesis.

It shows that even before accounting for taxes, clothing, school supplies, or a single unexpected expense, a family of four trying to survive on a poverty-line income in North Carolina faces a monthly shortfall of nearly $1,600.

They begin every month in an inescapable hole.

Part V: The Human Geography of Hardship: Who is Left in the Cold?

The brutal “real-feel” economic temperature does not affect all North Carolinians equally.

The data reveals a human geography of hardship, where the storm of economic insecurity hits certain communities with the force of a hurricane, while others experience only a passing chill.

To understand poverty in our state, we must move from the “what” of high costs to the “who” of disproportionate impact.

The Hidden Population: Asset Limited, Income Constrained, Employed (ALICE)

The most important concept for understanding the true scale of North Carolina’s economic challenge is ALICE: Asset Limited, Income Constrained, Employed.

This framework, developed by the United Way, gives a name to the millions of people like the mother at the commission meeting—people who are working, often in essential jobs, but whose earnings are not enough to cover the basic cost of living in their county.22

The ALICE data is staggering.

In addition to the 13% of North Carolina households living in official poverty, another 29% are ALICE.

When combined, this means a jaw-dropping 42% of all households in North Carolina live below the ALICE Threshold of Financial Survival.22

This single statistic fundamentally reframes the issue.

Economic hardship is not a fringe problem affecting a small minority; it is a mainstream crisis impacting nearly half of our state’s families.

These are our neighbors, the people who stock our grocery shelves, care for our children, and assist our elderly.

They are the engine of our economy, yet they are being left behind.

Disproportionate Impacts: Race, Gender, and Age

Within this vast population of struggling families, the burden is not shared equally.

Systemic barriers and historical inequities have created a reality where a person’s race, gender, or age are powerful predictors of their economic security.

  • Race: The disparities are stark and persistent. While the poverty rate for white North Carolinians is 9.3%, it more than doubles for communities of color: 19.4% for Black residents, 19.1% for Hispanic residents, and a shocking 24.7% for American Indian residents.1 The ALICE data paints an even more dramatic picture: 58% of Black households and 54% of Hispanic households live below the ALICE threshold, compared to 38% of white households.22 This is the modern legacy of historical policies like redlining and ongoing discrimination that have systematically blocked pathways to wealth and opportunity for people of color.5
  • Gender: Women in North Carolina are significantly more likely to experience poverty than men, with a rate of 14.9% compared to 12.2% for men.17 This is directly linked to the gender wage gap and the state’s lack of support for working parents, such as paid family leave and affordable childcare. Women’s labor is systematically undervalued, trapping many in low-wage jobs that offer few benefits and little stability.4
  • Age: The most vulnerable group of all is our children. Nearly 400,000 children in North Carolina—17.4% of all kids—live in poverty. For the youngest and most developmentally critical age group, children under five, the rate climbs to an alarming 22%.24 Growing up in poverty has devastating and lasting consequences, disrupting brain development, harming health, and impairing future economic mobility, effectively fueling an intergenerational cycle of disadvantage.25

This convergence of data reveals a profound truth.

For many communities of color and families with children in North Carolina, economic precarity is not an anomaly—it is the norm.

The “mainstream” economy, which provides stability for some, is a system that produces chronic instability for them.

This shifts the policy imperative from simply “helping the poor” to fixing a system that is failing a huge and vital segment of our population.

Geographic Divides: Urban Pockets and Rural Struggles

Poverty’s footprint is not uniform across the state’s 100 counties.

While major urban centers like Charlotte are engines of immense wealth, they also contain pockets of deep, racialized, and concentrated poverty.27

At the same time, many rural counties, particularly in the eastern coastal plain and the western mountains, consistently post the highest overall poverty rates.

In 2023, Robeson County had a poverty rate of 28.8%, while the affluent coastal county of Camden had a rate of just 5.0%.2

This geographic disparity underscores that solutions must be tailored to local economic realities, addressing the unique challenges of both urban disinvestment and rural decline.

Part VI: A Better Forecast and a Warmer Coat

My journey began in a county commission meeting, armed with data that I believed was true but which failed to capture the lived reality of the people it was meant to describe.

The faulty thermometer of the Federal Poverty Line was giving a dangerously misleading reading.

By understanding its flaws and turning instead to the “real-feel” temperature of the Living Income Standard, we get a much more accurate forecast of North Carolina’s economic health.

We can see the true scale of the storm, and we can see who is being left out in the cold.

But a better forecast is useless if it doesn’t lead to better preparation.

We have the tools to provide a warmer coat for North Carolina’s families.

The solutions are not a mystery; they are a matter of political and moral will.

The Solution Part 1: A Better Forecast (Adopting a New Metric)

The first, most fundamental step is to stop relying exclusively on a broken instrument.

North Carolina’s state and local governments, along with non-profits and philanthropic organizations, should officially adopt the Living Income Standard or the ALICE Threshold as a parallel metric for all policy discussions, needs assessments, and strategic planning.

We cannot solve a problem we refuse to accurately measure.

Using a realistic benchmark for economic self-sufficiency would transform our public discourse, shifting the goal from lifting families to an arbitrarily low poverty line to ensuring they can actually afford to live.

The Solution Part 2: A Warmer Coat (Policy & Programmatic Levers)

With a clearer picture of the need, we can deploy proven strategies that provide immediate relief and build long-term economic security.

  • Strengthening the Safety Net: Programs like the Supplemental Nutrition Assistance Program (SNAP) are among the most effective anti-poverty tools we have. In a single year, SNAP lifts nearly 300,000 North Carolinians, including 130,000 children, out of poverty.28 Protecting this vital lifeline from federal cuts is paramount.29 Furthermore, North Carolina must reform its use of Temporary Assistance for Needy Families (TANF) funds. Currently, the state dedicates a large portion of its TANF block grant to child welfare services rather than the direct cash assistance that is proven to prevent the very crises that lead to child welfare involvement in the first place.31
  • Making Work Pay: The surest path out of poverty is a job that pays a living wage. North Carolina can take two immediate steps to make this a reality for more families. First, it should create a state-level Earned Income Tax Credit (EITC) and a fully refundable Child Tax Credit (CTC). A generous state CTC, modeled on the successful 2021 federal expansion, could reduce child poverty in North Carolina by nearly one-third, representing a cost-effective investment in our future workforce.31 Second, the state must address its minimum wage, which at $7.25 an hour, is a poverty wage.9
  • Community-Led Innovation: The most effective solutions are often built from the ground up. North Carolina is home to a robust network of Community Action Agencies and innovative local programs that are already doing the hard work of building pathways out of poverty.33 Initiatives like the Guilford Success Network are pioneering an “integrated services delivery” model, bundling supports for education, health, and financial coaching to address the needs of the whole family, not just one individual.36 These community-based efforts are the laboratories for our state’s anti-poverty strategy; they require greater investment and a commitment to scaling what works.

I often think back to that Tuesday afternoon, to the woman who so bravely shared her story.

She didn’t come to the meeting to critique my methodology; she came because her life was a testament to its failure.

Her story is no longer an anecdote that complicates my data.

She, and the millions of North Carolinians who share her struggle, are the reality the data must serve.

We have a more accurate forecast of the problem now.

We see the storm clearly.

And we have the tools to build a warmer, more resilient, and more just North Carolina for every family.

We simply need to find the courage to use them.

Works cited

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  2. Poverty Research Project Series Report – myEOL – North Carolina Central University, accessed August 14, 2025, https://myeol.nccu.edu/sites/default/files/2025-04/Poverty-Research-Project-Series-Report.pdf
  3. North Carolina’s ‘Invisible Citizens’ | WUNC, accessed August 14, 2025, https://www.wunc.org/business-economy/2019-02-07/north-carolinas-invisible-citizens
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  6. Annual Update of the HHS Poverty Guidelines – Federal Register, accessed August 14, 2025, https://www.federalregister.gov/documents/2024/01/17/2024-00796/annual-update-of-the-hhs-poverty-guidelines
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  12. Federal Poverty Guidelines for FFY 2025 | The LIHEAP Clearinghouse, accessed August 14, 2025, https://liheapch.acf.gov/profiles/povertytables/FY2025/popstate.htm
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  17. PERSISTENT POVERTY – North Carolina Justice Center, accessed August 14, 2025, https://www.ncjustice.org/wp-content/uploads/2020/10/POVERTY-report-2020.pdf
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  24. New Census poverty data: 1.3 million living in poverty in NC – NC Budget & Tax Center, accessed August 14, 2025, https://ncbudget.org/new-census-poverty-data-1-3-million-living-in-poverty-in-nc/
  25. The Persistent and Pervasive Challenge of Child Poverty and Hunger in North Carolina, accessed August 14, 2025, https://law.unc.edu/wp-content/uploads/2021/12/NC-child-poverty_final-web.pdf
  26. POVERTY report.indd, accessed August 14, 2025, https://www.nccourts.gov/assets/inline-files/civil-justice-BTC-Report_North-Carolinas-Greatest-Challenge.pdf
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Beyond the Bureaucracy: How I Escaped the Health Insurance Maze with a Simple Map

by Genesis Value Studio
September 10, 2025
The Barren Field: How I Learned to See Federal Aid Not as a Maze, but as an Ecosystem in Need of Tending
Aging Policies

The Barren Field: How I Learned to See Federal Aid Not as a Maze, but as an Ecosystem in Need of Tending

by Genesis Value Studio
September 10, 2025
Beyond the Chart: A New Blueprint for a Resilient Back
Healthy Aging

Beyond the Chart: A New Blueprint for a Resilient Back

by Genesis Value Studio
September 10, 2025
Aging Research

The People’s Archives: An Investigation into the Promise and Peril of Federal Open Data

by Genesis Value Studio
September 9, 2025
The Exhaustion Epidemic: A Neuro-Immunological Framework for Understanding and Overcoming Lower Back Pain Fatigue
Chronic Pain

The Exhaustion Epidemic: A Neuro-Immunological Framework for Understanding and Overcoming Lower Back Pain Fatigue

by Genesis Value Studio
September 9, 2025
A Comprehensive Clinical Guide to Managing Lower Back Pain When First-Line NSAIDs Are Ineffective
Chronic Pain

A Comprehensive Clinical Guide to Managing Lower Back Pain When First-Line NSAIDs Are Ineffective

by Genesis Value Studio
September 9, 2025
The Florida Medicaid Labyrinth: How I Escaped the Maze and Found the Map. A Step-by-Step Guide.
Healthcare Reform

The Florida Medicaid Labyrinth: How I Escaped the Maze and Found the Map. A Step-by-Step Guide.

by Genesis Value Studio
September 8, 2025
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