Budget and Tax Center economist Patrick McHugh is out with a powerful new report entitled “Growth Without Prosperity: Seven years After the Great Recession Started, Recovery Still Eludes North Carolina.” This is from the release that accompanied the report:
The worst of the Great Recession is behind us, but the damage lingers, weighing down communities and families across North Carolina. We are now seven years removed from the financial crisis of 2008, but in North Carolina wages are down, job creation is lagging, and many communities are still stuck in recession.
Given all of the positive headlines lately, it’s easy to get the impression that the recovery is in full swing. Last year was the best since the financial crisis, with North Carolina and the nation finally getting back to the number of jobs that existed before the recession. The unemployment rate has also been dropping since the bottom of the Great Recession in 2009. However, these positive trends do not tell the whole story, particularly in North Carolina.
There are still not enough jobs for everyone who wants to work in North Carolina, but that’s far from the only problem. Simply put, North Carolina’s economy is not working for everyone:
Growth without prosperity: Economic output has rebounded nicely since the worst days of the recession, but it is not translating into larger paychecks for many North Carolinians. Adjusting for inflation, gross state product—which measures the value of all goods and services sold—is up 18.5% compared to 2007, but wages are actually down slightly.
North Carolinians still looking for work: North Carolina has not created enough jobs over the last seven years to keep pace with its growing population. The percentage of North Carolinians who are employed is still well below prerecession levels. North Carolina has also fallen below the national average for employment, where it had been consistently ahead of the nation in the years before the recession.
North Carolina needs a raise: Paychecks in North Carolina are not keeping pace with inflation, and have fallen further behind the national average since 2007. Employment has declined in many industries that had been the foundation for middle-class North Carolina families while many of the new jobs that have been created in the last seven years have been in extremely low-wage positions.
Recovery bypassing many communities: Looking at statewide data hides startling disparities between different communities in North Carolina. Most of the job growth in the last seven years has been clustered around North Carolina’s metropolitan areas, leaving vast swaths of the state largely untouched by the recovery. Ethnic disparities also persist and the recovery has not brought down the level of poverty in the state. While we should be encouraged that some parts of the state are doing quite well, we should not allow communities that are still suffering to fall into the shadows.