Commentary, NC Budget and Tax Center, Raising the Bar 2015

NC needs good jobs, not more tax cuts

Editor’s note: The following post by Jeremy Sprinkle, communications director at the NC State AFL-CIO, is the latest installment in “Raising the Bar” — a new series of essays and blog posts authored by North Carolina leaders highlighting ways in which North Carolina public investments are falling short and where and how they can be improved. 

No one wants North Carolina to have a strong economy more than its workers, who want to be able to work and to earn enough to support their families. Our state budget includes vital investments in supporting our current and future workforce, for example through workforce development, re-employment support and early childhood education, and our K-12 public school system. We know that making investments in these areas ultimately benefits all workers, families and our economy.

Unfortunately, legislative leadership in North Carolina has not pursued a path of investing in our workers and future workforce, but instead implemented a costly tax plan passed in 2013 that bleeds the state of much needed revenue for workforce development and training and innovative, proven initiatives that would create good-paying jobs in our state. The plan they passed gave big tax cuts mostly to profitable corporations and individuals at the very top of the income scale. Legislators based the pursuit of this strategy on a theory that tax cuts lead to higher job creation. However prior experience and research tells us that tax cuts don’t create jobs and they don’t grow the economy.

The 2013 tax cuts haven’t fixed the labor market despite disproportionately going to so-called “job creators” – the wealthiest North Carolinians and profitable major corporations.

As billionaire venture capitalist Nick Hanauer has said, if it was true that tax cuts for the rich created jobs, we would be drowning in jobs — but we’re not.

There are more people looking for work today than before the recession, and many of the jobs out there are low-wage jobs that don’t pay enough to support families or to reverse the decline of our middle class.

In fact, adjusting for inflation, an hour’s work today actually buys less than it did in 2007. Another tax cut isn’t going to fix that.

The way to raise wages and fix the labor market is by investing in our workforce and by empowering more workers to engage in collective bargaining to turn low-wage jobs into good jobs.

Policymakers have for too long asked working families to pay more and settle for less.

The 2013 tax cuts for the wealthy forced the state to slash programs that would have helped workers recover from the recession and rebuild their lives.

Workforce development, reemployment services, child care subsidies, and the Earned Income Tax Credit have all been cut or eliminated. Meanwhile, the cost of job training at community colleges or of pursuing a higher education is more expensive than ever.

Workers are consumers, and that makes us the real job creators in our economy. There aren’t enough wealthy people to make up for the declining buying power of North Carolina’s workers, and another tax cut for the rich won’t change that.

If lawmakers want to create jobs, they need to invest in workers, and investment takes revenue, revenue that is lost by cutting taxes.

And if they want to do something meaningful to put more money into workers’ pockets, they’d be better off encouraging workers to form unions and bargain collectively than by doubling down on the failed ideology that tax cuts are some sort of cure-all that past experience and common sense tell us just isn’t true.

 

Poverty and Policy Matters

Happy Equal Pay Day

If you work, you deserve to get paid. Sadly, in these times, even that statement is controversial (just see all our wage theft work).

So if it’s hard to even get workers paid, period, it shouldn’t be surprising that there are still opponents to the idea that women deserve equal pay for equal work. Maddening, but not surprising.

Today is Equal Pay Day, and new article from WomenAdvanNCe highlights the all-too-trouble wage gap that still exists. The piece reports on some statistics you’ll have heard (nationally, women make 78 percent of the salary earned by men doing the same job) and some you may not have.

As is often the case, the numbers get most tragic and shocking when broken out by race:

For North Carolina women, the statistics are slightly better. We make 82 cents on the dollar on average, but those numbers plummet for minority women: African American women in North Carolina make 64 cents on the dollar, while Latina North Carolinians make less than half of what men make at 48 cents on the dollar.

Sad and angry about this? You have a right to be. Want a good laugh that makes this same, all-too-salient point? Check this out.

 

Poverty and Policy Matters

Like saving money and protecting your health? Expand Medicaid

There are few situations in life that are clearly win-win. When you see one, you have to take advantage of it.

That’s why North Carolina should reverse course and expand Medicaid. When you have the chance to improve health care for hundreds of thousands of people and actually save money, you should jump on it.

In a recent News & Observer editorial, the paper called the decision not to expand Medicaid “wildly irresponsible and hugely expensive.” That’s precisely correct, and let’s explore the first part of the statement a bit more.

Turning down Medicaid expansion turns down $50 billion in federal funding and prevents roughly 400,000 of our neighbors from getting covered. That makes expanding Medicaid an obvious choice.

But also consider that preventative care saves money over the long run. Insuring people means they get to go to the doctor, which means we pay less to prevent disease. This leads to lower costs for taxpayers and better lives for our people. An excerpt from the N&O piece:

Community Care said in a news release: “The medical costs for low-birth-weight babies average $49,000 in a baby’s first year of life, or more than 10 times more than babies born without complications. A low birth weight also increases a child’s risk for long-term medical and developmental complications and the likelihood of incurring additional expenses for social services and educational needs in later years.”

Kate Berrien, manager of Community Care’s pregnancy project, said North Carolina now leads the South in having the fewest births before 39 weeks. That’s a lot of savings and a vast increase in the quality of life for many children born to low-income mothers. And it’s an achievement attributable to innovations in community-level care that were developed in North Carolina and are being adopted across the nation.

It’s a win-win situation. Tom Wroth, CCNC’s chief medical officer, said, “We’ve been able to align improving clinical quality with lower cost.”

Read that last paragraph again. Improving quality care with lower cost is a win-win. So is expanding Medicaid.

Commentary

Two must-read pieces on vouchers

Curious about the real cost of vouchers? Check out these two great op-eds from Rev. Dr. Arnetta Beverly and Margaret Arbuckle in the Greensboro News-Record.

Rev. Beverly focuses on why risky vouchers schemes violate the North Carolina constitution:

Article IX, Section 6 of the North Carolina constitution declares that public funds for education “shall be faithfully appropriated and used exclusively for establishing and maintaining a uniform system of free public schools.”

The language could not be clearer: Under our constitution, funds that must be used “exclusively” for the public schools cannot be used to issue private school vouchers.

That’s not all. The constitution requires that taxpayer funds must be spent “for public purposes only.”

Arbuckle’s piece highlights the very real human consequences of this ill-advised program:

Vouchers have horrible consequences, including misuse of public funds, violating separation of church and state and compromising children’s educational outcomes in unaccountable schools. This is a bad idea, wrong in its concept and implementation. The consequences for our public education system will be dire.

Both are well worth your time in advance of tomorrow’s hearing at the North Carolina Supreme Court.

Commentary

Celebrate Fred Korematsu

Today should be a national holiday.

No, not because of EITC Awareness, although the post below this one highlights that important issue as well. Because of Fred Korematsu, who was born on this day 96 years ago.

Korematsu was born in Oakland, Calif., but his U.S. citizenship didn’t keep him from being arrested for refusing to be relocated to an internment camp in 1942. He challenged his arrest in court, and two years later the case made its way to the Supreme Court. Korematsu challenged the constitutionality of Executive Order 9066, the decree that forced the relocation of people of Japanese descent to internment camps. The court ruled in favor of the government and against Korematsu in what is now widely considered one of its worst decisions. The majority of justices claimed the detentions were not based on racial discrimination but rather on suspicions that Japanese-Americans were acting as spies.

After World War II, Korematsu was released. But the conviction remained on his record for 40 years until it was finally overturned in 1983.

California was the first state to make Jan. 30 a holiday. Four states now honor Fred Korematsu on this day, and we should expand that number. He was a hero who believed in the U.S. Constitution, earned the Presidential Medal of Freedom and continued to advocate for civil rights until his death in 2005.