Commentary

Preemption bill reduces freedom, hurts the economy

Now that we’ve had a few hours to digest the General Assembly’s newly proposed preemption bill, it looks even worse than we originally thought, representing a full-frontal assault on anti-discrimination protections in North Carolina. Not only does the bill ban local governments from prohibiting discrimination by private businesses, it sharply reduces their ability to raise wages and—shockingly—eliminates the rights of workers to sue their employer if they’re fired for a discriminatory reason.

The bill takes crucial freedoms away from our local communities and will almost certainly damage the state’s economy.

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Commentary

Some uncomfortable questions about Eden’s looming brewery closure

State Senate Leader Phil Berger has some questions about the news that MillerCoors is going to close its long-time facility in Eden, Rockingham County, laying off 520 people in the process. Last night, he and fellow Rockingham legislator Bert Jones sent a letter to the U.S. Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights with a list of questions they urged the panel to pursue in an effort to determine whether the Eden brewery closure falls afoul of federal anti-monopoly regulations.

The Senator’s efforts are admirable given the enormously negative impact the plant’s closure would have on the rural community, which already has one of the state’s highest unemployment rates. And we sincerely hope that the brewery remains open, staving off the kind of mass layoffs that proved so disastrous to the human and economic fabric in rural communities like Kannapolis.

But after years of watching the legislature systematically dismantle the very state investments that protect jobless workers and promote community resiliency in times of high unemployment, workers in Rockingham and across North Carolina have some questions for Senator Berger as well:

  1. Why should Rockingham workers lose their unemployment benefits if they can’t find a job after 12 weeks ? If the brewery closes, 520 workers will lose their jobs through no fault of their own. Given that there are already twice as many unemployed workers as available job openings in Rockingham County (according to NCWorks), it will be mathematically very difficult for most these laid off workers to find new jobs. Thanks to the policies enacted by the General Assembly in 2013, Rockingham County workers will only have 12 weeks to find a job before they lose their unemployment benefits—the lowest duration offered for temporary wage replacement in the nation.
  1. Why should these laid off workers in Rockingham County lose food assistance after just three months if they can’t find employment in a job market without enough jobs? Since welfare reform in 1990s, the federal government has required able-bodied adults with no dependents to find a job, be engaged in skills training, or participate in other qualifying activities after three months of receiving food assistance or lose this assistance altogether. At the same time, federal law allows states to request waivers from this time limit in economically distressed counties where jobs are not available. Unfortunately, the General Assembly banned the state from offering this waiver in 2015, despite the 77 counties that qualified due to weak labor markets. In effect this move will significantly reduce access to food assistance for workers living in those counties, including Rockingham, after July 1 when the prohibition goes into effect.

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Commentary

Growth of low-wage contingent work, temporary jobs bad news for workers, report finds

The American economy has witnessed the explosive growth of contingent employment—any job in which an individual does not have an explicit or implicit contract for long-term employment—over the past 30 years. In a new report from the Workers’ Rights Project entitled The Age of Contingent Employment: How changes in employment relationships are impacting worker wages, power, and prospects, authors Clermont Ripley and Allan Freyer examine several key trends related to the growth of contingent work, including a special focus on temporary work and charts the impacts on workers, the overall economy, and the fundamental relationship between employer and employee. Key findings include:

  • Contingent employment takes many forms. It includes using labor contractors, temporary help agencies, employee leasing companies or other labor intermediaries, misclassification of employees as independent contractors, franchising, and contracting out services and the production of goods. Employers use contingent workers for the core business functions of the firm (e.g., manufacturing), and not just for peripheral activities like facilities maintenance or clerical support.
  • About one-third of the entire American workforce can be classified as contingent workers. This includes part-time workers (13.2 percent of the total workforce), independent contractors (7.4 percent), self-employed workers (4.4 percent), and a combination of temporary workers hired through agencies, temps hired directly by an employer, and temps hired as contractors (5.6 percent).
  • Employers have increasingly relied on contingent workers as a strategy for keeping down labor costs, a strategy that has cushioned corporate bottom lines and contributed to middle class wage stagnation. Despite historic productivity gains boosting record levels of corporate profitability, employers have sought to keep labor costs low. Instead, they spent these productivity gains on executive compensation and income distributions to shareholders — benefitting wealthy investors at the expense of workers and their wages. That’s why North Carolina’s workers saw their productivity increase by 86 percent, while their hourly compensation increase by just 22 percent.
  • Although some workers may benefit from the flexibility afforded by voluntary nonstandard work, many workers are stuck in contingent work relationships involuntarily—a trend that increases the distance between employers and their employees, reduces wages, weakens worker bargaining power, and presents challenges that our nation’s outdated, employment-related regulatory structure is unable to adequately address.
  • An important form of contingent employment involves temporary work, nonpermanent jobs provided through staffing agencies that supply labor to client companies on a short-term basis.
  • Temp work is growing much faster in North Carolina than in the nation as a whole, a troubling trend since temp work pays a lot less the state’s average wage. Between 2009 and 2014, the number of temp workers grew by 52 percent in North Carolina, compared to 39 percent in the national economy as a whole. North Carolina temp workers earned just $30,627, far less than $45,022 average wage.
  • Temp work in North Carolina has grown as a share of the economy over the past five years, from 2.4 percent in 2009 to 3.4 percent in 2014. This trend matters for workers because it suggests that temporary work is growing at the expense of more permanent and stable work—and that there’s proportionally less stable work available in North Carolina than in the nation as a whole.
  • North Carolina needs more permanent work, not less, in order to provide workers with the stable, regular incomes they need to make ends meet, ensure financial security for themselves and their families, and ensure long-term upward mobility.

For how policymakers can address the growing challenges related to contingent work, follow us below the fold.

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Commentary

McCrory signs misnamed “NC Competes” bill

After months of controversy, Governor McCrory yesterday signed a controversial economic development package ostensibly aimed at giving the state the tools it needs to compete for business investment in the global economy. Unfortunately, the latest version of the bill—HB 117, the misnamed NC Competes Act—doubles down on an outdated vision for economic competitiveness that relies on lowering business tax costs rather than investing in strategic development that boosts business productivity and encourages growth in those industry sectors most likely to thrive.

Although there are some positive steps taken in the legislation—notably requiring wealthier communities to pitch in more for certain incentive projects—on balance, it is unlikely to deliver on the promises that “competitiveness” is supposed to provide, namely jobs and economic prosperity that benefits everyone.

The final legislation contains many of the problematic provisions seen in earlier versions. Here are just five issues that make this a bad deal for North Carolina: Read more

Commentary

Local preemption bill even worse than we first thought

As we reported earlier this morning, the General Assembly is on the cusp of dramatically scaling back the authority of local governments to protect housing consumers and promote better wages, after a late night conference committee added pages of new—and highly controversial—local government restrictions to SB 279, an essentially noncontroversial bill originally written to update the state’s occupational licensing requirements for teaching sex education. And after a closer look, the bill looks even worse than originally reported.

Many of the new restrictions are highly charged, including provisions that could allow local landlords to deny housing to veterans and seniors, permit local businesses to discriminate against their customers based on their sexual orientation, and prohibit city and county governments from passing living wage and paid sick ordinances to boost their local economies. One shocking provision may even stop local governments from requiring landlords to provide heating, air, and ventilation in their properties.

For a full list of the problematic provisions contained in the bill, follow us below the fold.

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