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How big an annual paycheck does a North Carolinian need to be considered among the state’s top 10% of earners?
According to a report by Policygenius, it’s at least $86,970 a year as determined by U.S. Bureau of Labor Statistics data.
Policygenuis is a consumer-oriented research group that specializes in making comparisons on services purchases, such as insurance, and making socio-economic observations from federal data.
To be among the top 25% of N.C. earners required making at least $56,100 annually, which works out to $1,079 a week, or $26.97 an hour.
Taking it a step further, www.howmuch.net, a cost-information website, said a top 1% earner made on average $359,624 in 2018.
Meanwhile, the average annual wage in North Carolina is $43,850.
“As I was reporting out on this article, which specifically looks at state-level income for individuals, it was interesting to see that the top 10% of income earners in North Carolina earn at least 4.7 times more than those in the bottom 10% in the state,” said Derek Silva, a personal-finance expert at Policygenius.
“This is above average across the nation, and this disparity between the top 10% and bottom 10% is the 14th largest in the country,” Silva said.
The national average wage index, another way that annual individual wages are calculated, uses compensation that is subject to federal income taxes as reported on W-2 forms, such as wages, tips, etc. It doesn’t, however, capture entire income throughout the year. For example, dividends and capital gains aren’t included because they’re not wages.
“This is strictly a measure of how much they earn from day jobs,” according to WalletHacks.com.
The top 10% nationally would be at $95,000.
In 23 states, mostly in the Northeast and on the West Coast, it takes a much bigger paycheck than it does in North Carolina to be in the top 10%.
“Where you live can impact how much money you need to be considered ‘rich,’ ” Policygenius said.
For example, being top 10 rich ranges from $69,720 in Mississippi (the lowest amount) to $164,200 in the District of Columbia.
“Many people associate it with a specific dollar amount, like having an annual salary of $100,000,” Policygenius said.
“But an income of $100,000 can take your further in South Dakota than in California.”
Anyone who has moved from the Northeast or Florida to North Carolina can testify to a lower cost of living here, particularly when it comes to buying a house.
“This research emphasizes two points,” said Michael Walden, an economics professor at N.C. State University in Raleigh. “Purchasing power of dollars varies between states, and the income distribution of households varies between states.
“One important policy implication,” Walden said, “is that federal financial assistance programs — like Medicaid and SNAP (commonly known as food stamps) — should have their dollar amounts adjusted for state cost-of-living differences ... in order for the ‘effective’ assistance to be equalized.”
Mark Vitner, a senior economist with Wells Fargo Securities in Charlotte, cautioned that “earning a high income and becoming rich are two different things.”
“Getting rich usually takes time and discipline. Even if you make $250,000 a year, you are not going to be rich unless you save and invest a large portion of your salary over time,” Vitner said.
He said that in North Carolina, a top 10% earner gets more bang for their buck in Winston-Salem than in Charlotte and Raleigh.
“It really goes far if you live in Mount Airy or, better yet, Danbury,” Vitner said.
Mark Price, a labor economist with Economic Policy Institute, a nonprofit research group told 24-7 Wall Street, which conducts socio-economic research, that jobs in the higher-paying finance and insurance sectors tend to cluster in large metropolitan areas with large labor pools, such as Charlotte and the Triangle in North Carolina.
Patrick McHugh, a senior public policy analyst with the liberal-leaning N.C. Justice Center in Raleigh, said the Policygenius report helps to highlight how “radical income inequality was the economic story of 2018.”
“As the fortunate few at the top of the economic heap continued to rake it in, most North Carolinians are seeing little of the benefits of the current economic expansion,” McHugh said.
He cited an as example that the top 20% of wage earners took in 51% of all income in 2018 for North Carolina.
“As striking as that is, this fact alone doesn’t really reflect just how top-heavy our economy has become,” McHugh said.
“The lowest-paid 20% of North Carolinians received only 3% of the income generated by our economy, one-fifteenth of what the highest paid group took home,” he said.
Going up the wage scale even further, McHugh said that income “is even more concentrated at the very top, with the highest-paid 5% making off with nearly 1 in every 4 dollars of income generated in 2018.”
That meant, McHugh said, that 5% of state residents collected nearly the same amount of income as the bottom 60%.
The socio-economic ripple effect from “this level of income inequality threatens the economic and social fabric of our state,” McHugh said.
“Our economy relies on consumer spending, so when working families can’t pay for the necessities of life, the entire economic system falters,” he said.
“In North Carolina, it is likely that our persistently high levels of income inequality are holding the economy back from fully delivering jobs to everyone who wants to work and contributing to our low levels of economic mobility.”
The U.S. adult smoking rate slipped to another historic low — this time 13.7% for 2018 — though it remains the most commonly consumed tobacco product, the U.S. Centers for Disease Control and Prevention said Thursday.
The data comes in the CDC’s 53rd annual National Health Interview survey. It measures adults who smoke every day, some days or have ever smoked.
The rate reflects that about 35 million adult Americans still smoke cigarettes. The rate was 13.9% in 2017, 15.8% in 2016 and 15.1% in 2015.
The national adult smoking rate was 20.9% as recently as 2005 and 24.7% in 1997.
A historic low of 17.2% of North Carolina adults were considered as smokers in 2017, as well as 12.1% of youths, according to anti-tobacco advocates The Truth Initiative.
Altogether, 19.7% of U.S. adults consumed a tobacco product at least once in 2018. The other usage includes: cigars, cigarillos, or filtered little cigars at 3.9%; e-cigarettes at 3.2%; smokeless tobacco at 2.4%; and pipes, water pipes or hookahs at 1%.
“These new findings regarding the decline in cigarette smoking are very encouraging and should be celebrated,” said Dr. John Spangler, a professor of family medicine at Wake Forest Baptist Health.
“Nonetheless, they do not tell the whole story about all smoking or all tobacco use,” saying tobacco products such as cigars, cigarillos or little cigars “are just as unhealthy as cigarettes.”
“Many adults (18.8%) use two or more tobacco products,” Spangler said.
Spangler said that counties with the highest rates of smoking tend to be smaller and poorer, with higher populations of minorities and higher rates of infant mortality.
“Clearly, our state has more work to do,” Spangler said.
The slight increase in U.S. adult consumption of e-cigarettes from 2.8% in 2017 reflects the rise in use among young adults (ages 18 to 24), which went from 5.2% in 2017 to 7.6% in 2018.
“This marked decline in cigarette smoking is the achievement of a consistent and coordinated effort by the public health community and our many partners,” CDC Director Dr. Robert Redfield said in a statement.
“Yet, our work is far from over. The health benefits of quitting smoking are significant, and we are committed to educating Americans about the steps they can take to become tobacco-free.”
As has been the case in recent years with the annual adult and youth smoking rate reports, the key factors contributing to the decline depends on the anti-tobacco or anti-smoking perspective.
Anti-tobacco advocates cite the influence of “evidence-based strategies that have been implemented at the federal, state and local levels.”
The strategies include: tobacco tax increases; comprehensive smoke-free laws; well-funded tobacco prevention and cessation programs; mass media campaigns, health insurance coverage for tobacco cessation treatments; and laws raising the tobacco sale age to 21.
Dr. Brett Giroir, acting commissioner of the Food and Drug Administration, said the “sustained drop in adult smoking is encouraging as we work to reduce tobacco-related disease and death in the U.S. through science-driven policy, compliance and enforcement in addition to public education.”
“We remain dedicated to keeping pace with the evolving tobacco product landscape to ensure strong regulatory oversight in light of the increases in youth use of e-cigarette products in the U.S.”
In 2018, the N.C. General Assembly raised the amount of funds for tobacco prevention programs by $1 million over the 2017-19 budget years for a total of $2.8 million.
The additional funding is going toward “developing strategies to prevent the use of new and emerging tobacco products, including electronic cigarettes, by youth and people of childbearing age.”
An attempt to raise the e-cigarette excise tax rate to the level of traditional cigarettes cleared a House committee on Oct. 30, only for the language to be removed hours later in the House Rules and Operations committee.
Rep. Gale Adcock, D-Wake, said that while her amendment doesn’t address the national vaping illness crisis, “it is a good time for this bill to create a level playing field for electronic cigarettes and vaping products.”
The amendment would have used the net proceeds from the tax to help create the Tobacco Use Prevention Fund, beginning July 1. The fund would evaluate, track usage and make recommendations concerning “emerging tobacco products ... especially among youth and people of childbearing age.”
“This establishes a permanent funding stream for tobacco use prevention with an emphasis on youth and on vaping,” Adcock said.
Anti-smoking advocates point out that the CDC data releases continue to not examine the impact of e-cigs on smoking rates.
“In keeping with the government’s relentless attack on e-cigarettes, the welcome decline in smoking was not linked to National Institutes of Health survey data showing that higher proportions of current vapers are former smokers,” said Brad Rodu, a professor of medicine at the University of Louisville and an anti-smoking advocate.