The State of Working North Carolina

Today is EITC Awareness Day – also referred to as the Earned Income Tax Credit (EITC). The EITC is a federal tax credit that encourages work by boosting the income of low- and moderate- income working people and offsets federal payroll and income taxes. The EITC has proven to be a powerful tool in helping lift families out of poverty and improving the well-being of young children.

In 2007, a state EITC was established to help further boost the wages of low- and moderate-income workers in North Carolina and offset the higher share of state and local taxes they pay as a percent of their income compared to high-income workers. More than 900,000 North Carolinians claimed this tax credit in 2011, according to the most current tax information provided by the NC Department of Revenue. The impact of the EITC spans across the state, with taxpayers in each of the state’s 100 counties claiming the tax credit (see this interactive map).

Unfortunately, this tax filing season will mark the last year that low- and moderate-income North Carolina workers will benefit from the state EITC. State leaders allowed the state EITC to expire at the end of last year and chose not to extend the tax credit as part of the tax plan passed last year. As a result, the expiration of the state EITC represents a tax increase for more than 900,000 hardworking low- and moderate-income North Carolina taxpayers, for which every dollar counts in their efforts to make ends meet.

state of working NC - NC BLUE cropped (3)Labor day – a holiday created by the labor movement and dedicated to the social and economic achievements of American workers – provided little reason for North Carolina workers to celebrate this year. The State of Working North Carolina, an annual report assessing how workers in the state are faring, shows what many North Carolina workers already know: unemployment continues to plague the state and many workers – despite working full time – are just not getting by.

Nearly 1 in 4 workers in the state are in occupations that pay less than  $22,811 – the 2011 poverty threshold for a family of four. Roughly half a million workers in North Carolina are supporting themselves, and often their families, on the minimum wage of $7.25 per hour.

The minimum wage has received some long-overdue attention as of late with increasing attention to growing income inequality and national proposals based on the premise that those who work full time should not be living in poverty. Pre-labor day protests all across the country, and in North Carolina, highlighted the extreme disparity between workers struggling to make ends meet with soaring corporate profits in one of the few industries growing in the state. Read More

The State of Working North Carolina was released this week, and the numbers reemphasize that North Carolina’s working families have  experienced declines in financial stability and economic opportunity over the last decade.  One take away from this grim story is that North Carolina needs not only jobs, but good jobs. As a recent report by the Center for Economic and Policy Research highlights, however, good jobs are in short supply.

Good jobs pay a living wage. Read More

Significant job loss during the Great Recession has resulted in persistently high unemployment rates and long-term unemployment in communities across the state.  Some regions of the state, like former manufacturing towns and rural communities, have been particularly hard hit because the recent job loss compounds the economic transformation that has only made worse the ongoing loss of jobs. Unemployment, and particularly long-term unemployment, has been associated with a host of negative financial, family and health problems.

The worst possible outcome of long-term and high unemployment is the potential for people to become “discouraged”—to drop out of the labor market completely due to frustration with the lack of job opportunities.  National studies have found that this is happening across the country. North Carolina’s labor force participation declined by almost 2 percent since the formal end of the Great Recession in June 2009. Read More

The newly released State of Working North Carolina Chartbook reveals how several economic trends over the 2000s resulted in diminished opportunities for the state’s workers. Although the Chartbook does not review how workers are faring at the neighborhood level due to data limitations, it has been well-documented by the Budget and Tax Center that too many North Carolinians are concentrated in high-poverty neighborhoods where good education and job opportunities are severely limited. North Carolina needs policies that will strengthen the opportunity structure—especially in disadvantaged areas—in order to build a more inclusive economy that will support workers and the recovery.

As evidenced by high poverty rates and other economic indicators like joblessness and business vacancy rates, some neighborhoods are hurting more than others and the need to rebuild is clear. Disparities in economic opportunity at the neighborhood level have persisted during the decades-long transformation in the state’s economy and have grown since the Great Recession. Some neighborhoods’ economic hardships have been shaped by the isolation from good jobs and expanding industries, commercial disinvestment, and inequitable outcomes rooted in government policies.  Although the underlying causes of disadvantage may vary from community to community, the negative effects of living in an opportunity-deprived area are largely uniform, wide-ranging, and destructive. Read More