In case you missed it, economist Patrick McHugh at the Budget and Tax Center, poked some new and truck-sized holes yesterday in the glowing tale of a “Carolina Comeback” that continues to be spun by state leaders. As McHugh reports, worker wages remain stuck in the mud even as corporate profits soar:
A strong recovery should mean bigger paychecks. And yet, wage growth has been decidedly lackluster in the last several years, a sure sign that North Carolina’s comeback is far from complete. Despite corporate profits being at an all-time high and productivity increasing, the recovery has not translated into improved earnings for the average worker….
The latest data from December 2014 shows that across the state average wages have remained flat year over year and in eight of the state’s fourteen metro areas average wages have fallen. Economists generally say that wage growth needs to be at least 3.5 to 4 percent to deliver returns to worker’s paychecks or at least to ensure that labor is enjoying a stable share of the benefits of a recovering economy….
While average nominal wage growth was stronger from 2009 to 2011 in North Carolina, since 2012 nominal wage growth has been negative or flat year over year. Indeed for North Carolina workers, wage growth of 4 percent year over year since 2009 would have meant that the median worker would have been earning $3.00 more each hour in 2014.
The failure to achieve strong wage growth means that many North Carolina workers continue to struggle to keep up with rising costs and basic family needs….Until earnings growth improves, the strength of the economic recovery remains in question and the share of benefits that are going to workers limited.
Read the entire brief by clicking here.