STATEMENT: North Carolina's Young Adults Face Narrowing Path To Middle Class

Release Date: 
September 27, 2010

Raleigh — North Carolina's young adults will continue to face a tough economy--one ravaged not only by recession but also by 30 years of declining opportunity and security for all but the most highly educated and affluent, according to a new report by Demos and the North Carolina Justice Center.

The report, Building North Carolina's Future Middle Class: Addressing the Challenges Facing Young Adults, demonstrates that opportunity for young North Carolinians has expanded in some important areas, such as college enrollment and women's income. At the same time, the overall trends are worrisome: rising costs make it difficult for students to stay in school and graduate, employment has become less stable, earnings have declined for workers without a four-year college degree, and young adults are increasingly saddled with debt.

"Today's young adults face steeper financial challenges than their parents did," said Lucy Mayo, an author of the report and Director of the Economic Opportunity Program at Demos, "But it's not just the economy—our public policies have failed to cushion the blow. A previous generation had the G.I. bill and access to an affordable college education—what are we doing for this generation?"

The report discusses how the earnings of North Carolina's young workers have been consistently below the national average over the last thirty years, even as the median earnings for young workers nationwide declined. North Carolina workers in their mid 20s in North Carolina have actually experienced significant declines in earnings over this time period, exacerbating the gap between North Carolina and the nation.

Other key findings from the report, Building North Carolina's Future Middle Class, include:

Postsecondary Education:

  • Just over half (58 percent) of North Carolina students at four-year institutions graduate within six years, and only a fifth of two-year students graduate within three years. Many four-year students who leave college without a degree have student loan debt.
  • Young adults from high-income families in North Carolina are twice as likely to enroll in college than low-income young people. There is a 29 percentage point gap between enrollment rates for young whites and young Latinos and a 6 percentage point gap between young whites and young African Americans.

Employment and Earnings:

  • Earnings of full-time workers in their mid to late twenties have not experienced gains in earnings over the last thirty years.
  • Young women, with the exception of women in their early twenties, experienced some of the largest gains in median earnings from 1969 to 2008, ranging from 24 percent among those in their late twenties and 43 percent for women in their early thirties.
  • Young African Americans, while still earning less on average than young whites, experienced considerable increases in median earnings between 1969 and 2008.
  • Young Latinos experienced some of the largest declines in median earnings from 1969 to 2008, ranging from 40 percent for workers in their early thirties to 47 percent among workers in their late twenties.
  • Among workers under age 35, the unionization rate in North Carolina declined fifty percent over the last 25 years.

Debt and Assets:

  • Over half (55 percent) of North Carolina college graduates carried student loan debt averaging $18,400.
  • About a quarter (26 percent) of young adults in North Carolina lack health insurance.

Raising a Family:

  • The average annual price of full-time center-based child care for an infant in North Carolina is $8,148.
  • Nearly half (46 percent) of children under age 6 in North Carolina are growing up in a low- income family, defined as having income below twice the federal poverty level.

Alexandra Forter Sirota, Public Policy Analyst and report co-author said, "The right policies can restore opportunity for North Carolina's young adults and rebuild entryways to the middle class. We need a bold state and federal policy agenda, including creating good jobs through the public sector, better regulating exploitative lending of all kinds, and making higher education affordable."

Policy recommendations offered in the report include increasing federal and state funding for community colleges; creating career ladders in high demand occupations to enhance job mobility; index the states' and federal's minimum wage to inflation, increasing North Carolina's Earned Income Tax Credit; ensuring the newly established Consumer Financial Protection Bureau protects consumers from toxic financial products; and ensuring adequate state revenue through a progressive, well-funded tax system.

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