Commentary

As budget rumors swirl, what’s next for job training?

As rumors continue to swirl on Jones Street about a deal reached Friday night on the FY2015-2017 budget (details to be released Monday), investments in North Carolina’s community colleges and workforce development programs remain an area of critical concern. These programs are essential for improving the skills and competitiveness of our labor force and ensuring that low-income workers have accesses to the training resources they need to achieve long-term upward mobility in their careers and lifetime earnings.

Job training and basic adult education are critical investments that give workers—especially those at the bottom of the income scale—the tools they need to enter higher-wage occupations. For many, these programs can mean the difference between a life trapped in poverty-wage jobs and a life with opportunities to climb the career ladder and enter the middle class. Career pathway programs in particular create avenues for workers to build occupation-specific skills consecutively over the course of a career, creating stepping stones for long-term advancement within that occupation.

As a result, these programs provide a powerful policy-level antidote to income inequality and wage stagnation. As the recent State of Working North Carolina report points out, wages remained largely flat in decade prior to Great Recession and then experienced significant decline in years since the recession. This is largely the result of policies that allowed corporate executives and investors to earn the lion’s share of increased productivity achieved by technological advancements.

Building skills through job training and workforce development is an important tool for returning these productivity gains to workers—both by strengthening the ability of individual workers to bargain for better wages and by improving the overall recognized skills of the state’s workforce, a key competitive advantage that will create more quality jobs in North Carolina.

Given this reality, all eyes are on the emerging final budget deal to see how legislators treat these important programs. Thus far in the budget debate, the Senate has cut more funding for these investments than the House in its proposal. In the House proposal passed earlier this summer, the Community College System received a $52 million cut compared to the $59 million cut served up by the Senate. Similarly, the House provides $15 in new money for instructional equipment at the community colleges, while the Senate provides just $5 million. And while the House provides $1.9 million for job training in economically struggling areas, the Senate does not, instead opting to invest $1.5 million to put community college “coaches” in high schools with the goal of helping high school students transition into vocational training programs upon graduation.

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Commentary

Senate “Competes” bill goes from bad to worse

As the ongoing budget stalemate continues in the General Assembly, the Senate offered up this morning its latest version of the “NC Competes” bill, the mis-named economic development package that will likely do very little to make North Carolina genuinely competitive for private investment and job creation in the global economy. Like previous renditions of the package, today’s proposal just doubles down on tax cuts and corporate subsidy programs that have proven time and again to be ineffective at meaningfully growing our state’s economy. But it largely goes from bad to worse in terms of the state’s discretionary incentive programs.

In general, economic development incentives are not the most effective tool to promote meaningful job creation or widely shared economic prosperity. They tend to influence only a small number of firm location decisions and frequently end up going to the urban, wealthier areas that need incentive dollars the least in order to attract investment. And in North Carolina, the Job Development Investment Grant program—the state’s flagship incentive program—has failed to live up to its promises of job creation and investment in 60 percent of its projects.

The truth is that incentives just don’t play a major role in making our state competitive for business investment. While JDIG may play a role in luring a small number of businesses to the state, the program only accounts for a vanishingly small amount of the total number of businesses, jobs, and investment that come to North Carolina. Since the end of the recession, 95% of the jobs created, 92% of the growth in the number of businesses in the state, and 99% of the state’s GDP growth have occurred *without* investment from JDIG.

So it’s unfortunate that the Senate doubles down on this ineffective approach. Here are few of the most problematic provisions:

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Commentary

The Durham Living Wage Project

As #WageWeek continues to celebrate local and state efforts to improve wages across the country, The Progressive Pulse is highlighting the work of advocates, businesses, and elected officials engaged in innovative efforts to raise wages in local communities across North Carolina. This blog post is the next in this series, and represents a guest post from Carl Rist, board member of Durham Peoples Alliance and convener of the Economic Inequality Action team.

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These are strange times we live in. Recognizing the growing gap between rich and poor, our President has described economic inequality as the defining issue of our time. The presidential candidates from both parties are now talking openly about growing inequality, and yet, it’s now been six years since minimum wage workers got a raise.

In Durham, NC, we’ve launched an innovative effort to recognize employers that pay a “living wage” and raise up the importance of living wages in our community. Durham has long been among the leading cities when it comes to promoting living wages. Durham was the first city in North Carolina and one of the first in the nation to pass a living wage ordinance in the late 1990s. More recently, with new data from the NC Justice Center that shows that Durham has the highest median hourly wage in the state, but the 86th worst income inequality (our of our state’s 100 counties), concern has been growing about the growing gap between rich and poor in the Bull City.

When a local progressive group, the Durham People’s Alliance, began studying the issue and possible solutions, it became clear that finding a local policy solution to this growing problem would be challenging, Two years ago, the General Assembly weakened all living wage ordinances in the state by removing the ability of these ordinances to apply to all city and county contractors. What’s more, a web of state preemption laws related to our state’s constitution keeps us from passing local policies, such as local minimum wage ordinances, that would apply to all private employers.

That’s why members of the Economic Inequality “action team” of the People’s Alliance decided to work with private employers to voluntarily raise wages for workers in Durham.

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Commentary, News

More #WageWeek: Advocates promote quality wages for caregivers, quality care for seniors (video)

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As #WageWeek continues to celebrate local and state efforts to improve wages across the country, a growing campaign for quality wages for home healthcare workers and quality care for seniors launched in Raleigh on Monday at a Crucial Conversation event hosted by NC Policy Watch.

Workers, legislators, and advocates spoke movingly at the event about the crucial link between paying caregivers better wages and providing seniors with the stability in care they need to spend their lives in dignity.

At a time when our growing population of seniors is driving rapid growth in the number of workers providing their care, it is more important than ever to address the harsh reality that workers in caregiving occupations are among the lowest paid in our economy—earning on average $5 less an hour than workers in the overall economy.

Because these caregivers earn so little, they are forced to work second and third jobs just to make ends meet and afford the basics for their families. Balancing so many jobs with different hours often causes dramatic disruptions in their ability to provide continuous, stable care to the seniors who rely on them.

And as became clear over the course of the conversation, a big contributor to this problem involves the state’s Medicaid program, which reimburses seniors for long-term care and disability services. Medicaid largely sets the overall framework for private insurance reimbursements, and after years of budget cuts, North Carolina’s program now reimburses seniors $4 dollars an hour less than the national average.

A lower reimbursement rate for care means less money for the homecare employers arranging senior care, and even lower wages for the workers actually providing the care.

Something must be done to raise caregiver wages, and Monday’s conversation marked a good first step in raising awareness on this important issues.

Commentary

Raising the minimum wage will create jobs and help businesses succeed

Many North Carolina workers are locked in low-wage jobs that don’t pay enough to make ends meet, even though they’re working full-time. Over the long-term, state lawmakers need to implement a comprehensive strategy that creates pathways out of this low-wage economy. But right now, they can provide an immediate boost to working families by increasing the minimum wage from the current level of $7.25 an hour. Raising the wage floor would put more money in the pockets of workers, increase sales for local businesses, and strengthen the state’s overall economic performance, without increasing unemployment, according to a new fact sheet released by the Justice Center yesterday.

Most importantly, raising the minimum wage benefits adult workers and their families, providing a critical antidote to the ongoing boom in low-wage jobs. Almost 6 out of every 10 new jobs created since the end of the recession are in industries that pay poverty-level wages. More than 80 percent of new jobs created since 2009 don’t pay enough to cover life’s necessities, including housing, healthcare, groceries, and gas costs. Raising the minimum wage would make the difference between destitution and self-sufficiency for thousands of workers on the bottom rung of the state’s labor market.

One critical effect of raising the minimum wage for these low-income workers is the boost to the entire economy that comes from putting more money in the pockets of large numbers of those workers most likely to spend it. For example, boosting the wage floor to $10 an hour would affect approximately 1 million workers in North Carolina. And because of the boom in low-wage work, the vast majority of those North Carolinians benefitting from the wage increase are no longer the part-time, teen-aged workers who once filled the bulk of entry-level jobs in past generations. Now, more than 85 percent of those benefitting from a minimum wage increase are workers older than 20 years of age, and more than half work full-time. A half-million children in the state would experience increased security thanks to their parents’ higher wages—a critical support given that North Carolina has the eighth highest percentage of children living in poverty in the nation.

As low-income workers spend their bigger paychecks, local businesses will benefit, growing the economy without hurting overall employment. Economists have repeatedly found that those states that increased their minimum wages have seen better economic performance, lower unemployment, and higher job creation rates than those states that didn’t raise their wages, controlling for regional economic trends. The evidence clearly and repeatedly contradicts critics who claim that increasing the minimum wage forces employers to offset greater payroll costs by reducing the number of employees.

In fact, raising the minimum wage creates more customers, more sales, and bigger profits. For example, recent studies have indicated that raising the minimum wage to $10 an hour would increase paychecks for North Carolina’s workers by $2 billion a year. That’s $2 billion in increased consumer spending at local businesses, boosting business sales, business profits, and creating more than 5,000 new jobs.

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