We make hundreds of decisions every day from the moment we wake up to the time we go to sleep. Some choices, like working or doing chores, feel less like choices and more like obligations. Other choices we make purely for joy and fulfillment, like spending time with loved ones or pursuing hobbies. What matters most is that we get to choose.
However, for the one in six Southerners who live in poverty, this level of autonomy is a dream, not a reality. Economic security makes it possible to take risks like leaving a job, starting a business, going to college, or moving to a new place. Yet many Americans report not having at least three months’ worth of emergency savings in the event of a job loss, let alone enough savings to voluntarily leave a job or invest in a business. For communities of color and rural communities, the barriers are even higher.
Adults who have 3 months emergency savings, by race/ethnicity
Adults who have 3 months emergency savings, by metro/non-metro status
This reality is the result of intentional policy choices that limit opportunity. Take, for example, the historic practice of redlining. Redlining practices restricted homeownership for communities of color in the 1950s and 1960s, but the ripple effects are lasting. Children of color attend poorly-resourced public schools, as property taxes—tied to home values—have long dictated school funding. Redlining limited access to traditional banking and credit, pushing marginalized communities toward predatory lending practices that trap families in cycles of debt. The legacy of redlining has also shaped health care access, with underinvested neighborhoods often lacking adequate medical facilities, leaving residents more vulnerable to medical debt and poorer health outcomes. Together, these barriers strip many Southerners of the autonomy that economic security provides, further compounding poverty in both urban and rural areas.
“Benefits cliff” policies provide a present-day example of how intentional policy choices shape individual opportunity. The term “benefits cliff” refers to the sudden decrease in public benefits that can occur with a small increase in earnings. This creates a tightrope situation for families as they carefully balance between stability and crisis. A small step forward, earning just slightly more income, can cause the rope to snap, plunging families into a financial freefall where they lose vital support before they’ve gained a solid footing. Although working people want to move up the economic ladder, doing so can cut off their benefits and leave them in a gap that’s nearly impossible to escape. In effect, it creates perverse disincentives for increased economic opportunity. Benefits cliffs are not naturally occurring; they are an intentional policy choice. While some Southern states have enacted legislation to help curb benefits cliffs, much more could be done.
As MDC traveled throughout the South from 2022 to 2024, we heard how stable and affordable housing, quality education, access to healthcare, safe lending practices and a manageable level of debt create the conditions for Southerners to thrive. When these ingredients are securely in place, individuals have the chance to imagine different futures, consider new ideas and ventures, and take steps to realize their dreams.
Housing
Housing plays a central role in the cycle of inequity. In communities across the South, housing values have skyrocketed, pricing out longtime residents and displacing families, especially those in low-income communities of color. Take Durham County, N.C., as an example: Median home values increased from $176,100 in 2010 to over $240,000 in 2020; median gross rent increased nearly 40% in that same time period.
Rent and housing values in North Carolina, 2010 and 2020
The South has some of the highest eviction rates in the nation: Greenville S.C. (25% per 100 renters), Richmond, Va. (23%), Charleston, S.C. (18%), and Memphis, Ten. (17%). Evictions disproportionately affect women and Black renters. Although eviction rates are lower in rural areas than in urban areas, some rural areas of the Southeast have high eviction rates. South Carolina ranks as the worst in the country for evictions, with nearly 18% (one-sixth) of rural residents facing eviction each year. Many of the eviction protections that were enacted during the COVID-19 pandemic ended in 2023. As a result, both rural and urban communities saw eviction filings jump to or above normal levels prior to the pandemic.
As MDC traveled to Charleston, Durham, and Atlanta, we heard the same story: long-term residents, particularly those who are low-income and of color, are being pushed out of their communities and disconnected from jobs, transit, and essential services. Between 1990 and 2022, the proportion of Black residents in Charleston dropped from over 40% to under 20%, while the White population increased from under 60% to over 70%.
Over that same time, the proportion of Black residents in North Charleston (a separate municipality) grew, while the proportion of White residents shrank. Together, these charts suggest that Black residents in Charleston are being pushed out to communities like North Charleston where housing is slightly more affordable. Without a sufficient supply of affordable housing and protections for renters, people will continue to be pushed out of their long-term homes and communities.
Affordable housing is not just an issue in urban areas of the South, but in rural areas, too. Rental housing options are declining in rural communities, further exacerbating the affordability crisis, as government investment has slowed in recent years. The federal Low-Income Housing Tax Credit (LIHTC) has long played a critical role in providing access to safe, affordable housing to low-income rural residents, including seniors, veterans, and Native Americans. This is particularly important in the South—home to nearly half of America’s rural population. The LIHTC has also been used to rebuild housing following climate disasters and may become even more important as the South faces more frequent and severe climate events.
Education
Education is a pivotal mobility experience that has a significant impact on lifetime income and can help break the cycle of intergenerational poverty. Yet, a high-quality education is not a guarantee in our country. Structural discrimination has created “educational debts” that lead to race- and class-based disparities in educational attainment.
Outcomes are even worse for students with learning differences who often face inadequate support, under-resourced schools, and lack of access to individualized learning plans. These students are more likely to be overlooked in traditional classroom settings, leading to lower graduation rates, limited access to higher education, and ultimately reduced economic opportunities. To address these disparities, we must tackle root causes of the issue, including how we fund education.
A 2024 report from the Education Law Center found the following:
- All 13 Southern states were below the national average for cost-adjusted per-pupil funding. Six Southern states (AR, FL, MS, NC, TN, TX) spent between $3,000-$5,000 less than the national average per pupil.
- Two Southern states (AL, FL) have a regressive funding distribution, meaning they distribute less funding to high-poverty districts than low-poverty districts. Four Southern states (KY, LA, TX, WV) have a relatively “flat” funding distribution system. Seven Southern states (AR, GA, MS, NC, SC, TN, VA) have a moderately progressive funding distribution system, meaning they distribute more per-pupil funds to high-poverty districts than low-poverty districts.
- Seven Southern states were below the national average for “funding effort,” or PK-12 revenue as a percentage of the state’s economic activity, or gross domestic product (GDP).
School funding in the Southeast, 2022
Two states (FL, TX) rate poorly across all three categories: below-average funding levels; not targeting funding to low-income students; and below-average effort to fund schools. The Education Law Center asserts that “policymakers in these states must do more to improve funding fairness by increasing the effort they make to raise revenue and revising the way in which funding is distributed among districts.” Georgia, North Carolina, Tennessee, and Virginia have moderately progressive funding distribution systems but should leverage fiscal capacity beyond property taxes to generate additional school funding.
Increased funding for K12 education is important, but what gets funded matters, too. Research suggests that investments in teacher salaries, school facilities, and high-poverty schools correlate with improved academic outcomes for students. In short, students are more likely to succeed when they have access to high-quality learning environments.
The same is true for children ages 0-5, before they get to kindergarten. Early education experiences shape lifelong outcomes, yet the U.S. has historically underinvested in early childhood education. Less than half a percent of U.S. Gross Domestic Product (GDP)—or $6,571 per child in 2021-22—goes to early childhood care, though many families cannot even access subsidized care. High-quality child care is expensive to provide, yet child care providers struggle to make ends meet. Policies like the federal Child Care and Development Fund can help close the gap and increase access to high-quality early childhood education for low-income families.
Healthcare
Access to healthcare is essential for a meaningful life, as it supports physical and mental well-being, empowers individuals to pursue their goals, and enables them to contribute fully to their communities. However, without universal healthcare or full Medicaid expansion, thousands of Americans are denied the opportunity to seek preventative care before health concerns escalate into emergencies. As a result, nearly 1.5 million people nationwide remain without access to health insurance, with the coverage gap disproportionately affecting people of color. This issue is particularly pressing in the South, where seven of the 10 states (AL, FL, GA, MS, SC, TN, TX) have yet to expand Medicaid.
Access to care is also difficult for those living in rural areas—101 rural hospitals have been closed or converted across the South since 2005. The result is fewer healthcare providers, including specialists, and a shrinking network of care that leaves communities with few options. Moreover, when hospitals close, distances to health care increase, making timely medical care difficult for emergencies and ongoing treatments.
Maternal mortality outcomes are heavily influenced by women’s ability to access care and health insurance, and women of color in both urban and rural areas currently experience significantly worse health outcomes than White women. Building a healthcare system that enables everyone to access care when needed without incurring substantial debt would free Southerners to build the lives they want for themselves.
Debt and Lending
For many Americans, it is practically impossible to live debt-free in the United States. Debt is often the only way to meet daily needs—sometimes the only means keeping families financially afloat, and a mode of survival that is fraught with risk. The debt crisis is more acute for households in the South:
- Auto loan debt comprises the largest percentage of non-mortgage debt held by Southerners. Five of the top six states with the highest shares of auto-retail loan delinquency rates are in the South (AL, SC, LA, MS, TX), at over seven percent. When a borrower becomes delinquent on an auto loan, their car can be repossessed. Not only does this mean they lose their form of transportation, but it also negatively affects their credit, makes it difficult to get a loan to buy another car in the future, and may result in collection costs that are higher than the original cost of the loan.
- Four of the five states with the highest average student loan debt per borrower (over $38,000) are in the South (GA, VA, FL, SC). While postsecondary education holds the promise of improving lifetime earnings, significant student debt can actually have a net-negative impact on earnings.
- Southern states account for five of the 10 states most burdened by credit card debt and penalties associated with this type of debt. In 2023, Southern states saw the greatest increase in consumer debt; Alabama, Florida, North Carolina, South Carolina and Texas each saw average total debt balances increase by 4 percent or more, versus the national average of 2.3 percent.
Debt disproportionately impacts people of color. Due to inequities baked into our economic systems, people of color are more likely to incur debt to cover basic expenses and pay for higher education. Systemic barriers have limited financial opportunities for people of color, resulting in fewer financial assets, which means they have less cushion when financial challenges arise. Communities of color are also more frequently targeted by predatory lenders offering products like high-interest payday loans or subprime mortgages. These loans often have unfavorable terms and can trap borrowers in cycles of debt. Policy solutions that curb predatory lending and address the debt burden are necessary for all Southerners to thrive.
Voices from the Ground
The stories that follow illustrate how systemic barriers to housing, income, wealth, and health care keep communities of color and low-income communities from achieving the stability they need to pursue their dreams. The authors call for bold leadership and transformative solutions so that all Southerners can build the life they imagine for themselves.
- Craig Logan, Executive Housing Fellow at the Charleston Metro Chamber of Commerce, reflects on how safe, stable, affordable housing can foster a sense of belonging, support personal growth, and cultivate connections within the community, while housing insecurity contributes to economic instability and social inequalities.
- Hope Wollensack and Amit Khanduri of GRO Fund describe how programs like guaranteed income and Baby Bonds provide immediate financial support and long-term wealth-building opportunities vital to addressing income and wealth inequalities in the South.
- Jenny Fine, a visual artist and teacher living and working in New Brockton, Alabama, shares the devastating consequences of inadequate healthcare access and the urgent need for Medicaid expansion in Alabama. Her experience underscores how systemic barriers contribute to preventable suffering and death in our region.
- Reporter Grace Vitaglione looks at research from MDC and others to understand the burden of student loan debt for Black women in North Carolina in a 2023 story published by Carolina Public Press.
Authored by MDC
MDC envisions a South where all people thrive. We work with partners to strengthen community capacity, foster collaboration, and build influence to challenge systemic inequities and build an equitable and inclusive South.
