North Carolina is widely recognized as a hub of international commerce and “transnational population movements” (movements of people from other countries, especially Mexico and other parts of Latin America). Emblematic of its enlarged role in the world economy, the state’s aggressive efforts to recruit U.S.–based multinational corporations and to attract direct investment from foreign companies reportedly harnessed $41 billion in new investment during the 1990s, including $6.1 billion from foreign companies. Moreover, during the same decade, large numbers of native- and foreign-born migrants flocked to the state to take advantage of the burgeoning employment opportunities. The state’s jobless rate hovered around 4 percent for most of the 1990s. That rate was indicative of a full-employment economy, one that was creating far more jobs than there were people to fill them. Under such tight labor-market conditions, wage rates typically rise as employers compete for available workers. That appears to have happened in North Carolina in the 1990s. Real personal income per capita (in 2001 dollars) grew from $23,600 at the beginning of the decade to $27,935 at the end, an 18 percent increase.

However, the 2000 Census revealed that the incidence of poverty in North Carolina also increased during the 1990s, by 15.5 percent (compared with a 6.8 percent increase nationally), creating
what some have called a “poverty paradox.” How could poverty increase so sharply amid such prosperity?

This article answers that question by analyzing post-1990 changes in the incidence of poverty and describing current manifestations of poverty in North Carolina. In this article, “poverty” is defined as insufficient family income to cover basic needs. The article assesses North Carolina’s contemporary poverty problem on three geographic scales (state, region, and place of residence) and on three demographic dimensions (age, family type, and race or ethnicity), using data compiled by the U.S. Census Bureau. As background, it begins with a brief review of the recent history of the poor in America.