In case you missed it, the good folks at the N.C. Budget and Tax Center have prepared a nice contribution for your Thanksgiving potluck — a series of talking points to help you converse with your less-well-informed dinner companions. Enjoy!

Here are some key facts to throw out there as you pass the gravy boat and say “yes, please” to a second – or third – piece of pecan pie.

WHEN THEY SAY: “We need to attract more businesses to relocate here if we want North Carolina to grow. Cutting taxes, regulations, and unemployment insurance and not expanding Medicaid is the best way to do that.”

YOU SAY: First of all, it’s really people like you and me, consumers, who create jobs. Businesses hire when they see a demand for their products, so job creation really starts with making sure we earn a good living and feel secure enough to spend.

Even if we’re talking about where large companies choose to invest, state taxes just aren’t that big of a deal. You have to turn a profit before you pay taxes, so that’s what companies are thinking about first and foremost. Most companies look for educated workers, a good transportation system, and a place that their employees want to live before they think about taxes.

If North Carolina is going to do better, we need to focus on policies that will make everyone feel more economically secure.

WANT TO READ MORE? BTC Policy Basic: The Reality of Tax Cuts

WHEN THEY SAY: “The Carolina Comeback is real! Clearly these policies are working.”

YOU SAY: (Stage directions optional): The Carolina Comeback sounds nice but it’s not the reality for most North Carolinians and communities in our state.

First off, it’s a U.S. comeback, nothing special to North Carolina. We went into the recession as a country, and the recovery has happened nationwide. Read More


In case you missed it, the latest edition of the Justice Center’s “Prosperity Watch” has some less-than-encourgaing news about the “Carolina Comeback”:

With wages stagnating, the price of many necessities soars

Getting by is getting harder in North Carolina. The cost of some basic necessities are growing faster than wages in North Carolina, catching households that have to spend the bulk of their income on things like food and housing in a tightening vice. When families don’t earn enough to make ends meet, they can’t buy goods and services that provide jobs for other North Carolinians, so the entire economy slows down.

Inflation has been low over the last year or so, with some economists arguing that this should blunt concerns over wage stagnation. From the end of 2007 through July of this year, the cost of all goods and services that the average household purchases increased by 12.6%, while wages increased by almost the same amount. However, as can be seen above, the cost of essential needs like food and shelter has actually outpaced many other types of consumer goods. The price of shelter increased by 14.5% from December 2007 to mid-2015, and the cost of food went up almost 20% during that same period, growth that outpaces wages in both instances.

The practical effect of these trends is that families living in poverty are feeling the squeeze more than the average household. It should come as no surprise that low-income families are forced to spend a larger share of their income on basic necessities than their more prosperous neighbors.

For example, households in the bottom fifth of income spend 16% of their outlays on food, compared to 11% for the top income group. Households at the bottom of the income distribution spend over 40% of their budget on housing, while the top group comes in around 30%. The real world consequence of this is that poorer families have seen the cost of what they have to spend their money on go up much faster than middle of high income families.

High-level economic data can often shield the most economically vulnerable from view, masking the daily challenges that arise when wages don’t keep up with the growing costs of the basics.  Before anyone declares victory in North Carolina, we need to see wage growth that allows working people, and the economy, to make progress.


Budget see sawAs a one-time civics teacher, my job was to explain to 8th graders how our government works. On one level, it was simple: people vote for leaders who will represent them. The leaders make decisions on their behalf.

But, of course, that wasn’t the whole story. I usually stumbled through the part about politics and special interests. I labored to explain out how our tax system has grown increasingly regressive, shifting the responsibility off of large corporations and onto the pocketbooks of their parents. Inequality is an ugly reality, but a reality nonetheless.

North Carolinians understand the inequality that exists in our economy. They also understand how to fix it. On Wednesday, North Carolinians from across the state delivered a petition calling on lawmakers to listen to them – and not the American Legislative Exchange Council (ALEC) – when it comes to budget and tax choices. The petition, which included more than 6,000 signatures (and which was accompanied by a sign-on letter from 17 organizations representing tens of thousands of individuals) calls for an equitable and adequate tax system that keeps North Carolina strong.

As legislators continue to work on a final budget, many North Carolinians are concerned that their leaders will ignore their voices and instead choose to listen to ALEC. ALEC, a national arch-conservative group funded by large corporations, has designed many of the policies, such as tax cuts, low investments for protecting our communities, and giveaways to big corporations, that have moved North Carolina backwards. Indeed, as the post below notes, many lawmakers left Raleigh early this week to attend ALEC’s annual conference in San Diego.

At a press conference announcing the delivery of the petition, Tazra Mitchell, a policy analyst with the Budget & Tax Center, explained, “The disproven theory that corporate tax cuts help our economy move forward is economic snake oil that ALEC sells to state legislators around the country … These policies are a prescription for poor results that hinder the ability of our state to set up a foundation for future growth.”

After Mitchell’s remarks, more than a dozen North Carolinas spoke out on why they felt investments are critical to a strong and equitable economy. Some examples: Read More


BTC -Smart investmentsAcross the nation, the post-recession recovery has been slow and North Carolina is no exception. This is due in large part to historically low public investment. State leaders have turned to austerity and tax cuts to promote growth; unfortunately, these plans have backfired. We cannot leave our future up to the invisible hand of the market; the same invisible hand responsible for the financial crises. Public policy must intentionally promote and protect economic growth and stability.

The House gets it. Although modest, the budget proposed by the House of Representatives invests in North Carolina at rates higher than any other state bill since 2009. The bill increases funding towards K-12 education, rural communities, the court system, health, housing, and other critical public services.

It is now time for the Senate to follow suit. Unfortunately, the Senate’s spending targets lead analysts to expect a bill that will exclude many of the provisions that would give North Carolinians the breath of fresh air that they so desperately need. In anticipation, the North Carolina Justice Center’s Budget & Tax Center held a press conference, Monday, calling on the Senate to build on the reinvestment the House budget. Read More


Be sure to check out the Sunday edition of Raleigh’s News & Observer for an excellent column by NC Budget and Tax Center economist Patrick McHugh: “Hold the applause for NC’s sputtering economic recovery.” As Patrick notes:

“The worst of the Great Recession is in the rearview mirror, but the recovery has left far too many people, families and communities worse off. When you take a sober look at North Carolina’s economic reality, the breathless self-congratulations ring a bit hollow. An alarming pattern has emerged: Economic growth is not producing broad prosperity, which is trouble for everyone….

We’ve also replaced a lot of middle-class careers with low-paying, dead-end jobs. Thousands of jobs have been lost in industries that were the bedrock of middle-class North Carolina for generations, particularly manufacturing and construction. These were jobs where hard work brought livable wages and opportunities for advancement, jobs that could support a family, and jobs that offered a piece of the American Dream.

At the same time, we’ve seen an explosion in low-wage service jobs with few opportunities to move up. The average wage in industries that have grown since 2007 – like hotels and restaurants – is almost $10,000 less than in industries that have declined. When growth doesn’t create good-paying jobs, the lack of prosperity reverberates through the entire economy as people stop going out to eat, buying houses, getting new cars and scale back in a host of other ways….

Leaders in Raleigh need to be constantly reminded that we cannot accept growth without broad prosperity. Too many people are out of work, too many paychecks are coming up short and too many communities are being left out of the recovery.

We have neglected the investments needed to provide our children a 21st century education and our working men and women skills training; to build a transportation system that can move at the speed of business; to help small businesses withstand the competitive pressure of the modern market. This lack of investment has blunted the recovery and left the deepest problems with North Carolina’s economy unaddressed.

Instead of taking pride in finally escaping the recession, we should be focused on building a future that North Carolina can really be proud of.”

Read the entire op-ed by clicking here.