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Commentary, NC Budget and Tax Center

Economists and politicians both talk about job numbers a lot. Of course the number of jobs is a vital indicator of how well the economy is working, but simply knowing how many jobs there are does not tell the whole story. Understanding the health of the labor market also requires knowing how many of the new jobs can pay for the necessities of life, support a family, and provide the basis for a long-term career. One of the most distressing aspects of the last few years is how many of the middle-class positions lost during the recession were replaced with low-wage employment, part time work, and jobs with few opportunities for career advancement.

2014 End of Year Charts_recovery based on low wage jobs

Probably the most glaring problem with the current recovery is how few decent-paying jobs have been created. As can be seen in the chart above, the majority of jobs created since the start of the recession do not pay a living wage. There are both long and short term trends that are at play here. Many industries that supported middle class wages in North Carolina, most notably manufacturing, use more machines and fewer people, eliminating lots of jobs in the process. Many of the jobs created since the recession are in service sectors that generally pay much lower wages than the blue color jobs that have been lost. This shift toward low-wage jobs is undermining the economic stability that many families in North Carolina had built over the preceding decades.

2014 End of Year Charts_recovery has not reduced poverty

This concern is bolstered by the fact that the current recovery has not done anything yet to reduce poverty, as can be seen above. Even as total employment grew over the past few years, the amount of poverty in North Carolina has actually increased, a sure sign that there are many working people who do not earn enough to escape poverty.  This runs counter to prior recessions when economic recoveries not only resulted in growth but also reduced hardship at the same time.

As noted above, we have both short-term and long-term issues to address. We still need more total jobs because wages remain depressed, in part, because there are still so many people looking for work that there is little upward pressure on wages in many industries. We can do more to ensure that North Carolina’s economic development programs are tied to wage standards so that the jobs we do attract will actually support a family. We still need to help mid-career people whose jobs disappeared during the recession, and are not likely coming back, also need help in transitioning into new occupations and careers. And certainly, long-term we need to prepare North Carolina’s children to negotiate an increasingly dynamic and competitive job market.

Anyone who is willing to work hard should not have to live in poverty, but that basic American promise isn’t going to keep itself. Public policy helped to build the middle class, and a lack of public policy vision can destroy it. If we don’t honestly look at what policy changes are needed to ensure that hard work pays, the economic damage of the recession will become a permanent reality for many North Carolinians.

Uncategorized

Thom TillisNorth Carolina House Speaker Thom Tillis headlined a press event at the General Assembly this morning that was supposed to be about kicking off the 2014 legislative session but that, at times, felt a lot like a part of Tillis’ U.S. Senate campaign.

There will plenty of time for dissecting the details of what was said at the event, but there was at least one familiar conservative talking point repeated by Tillis that deserves to be debunked immediately and often.

Namely, it is utterly absurd for legislative conservatives (or anyone else for that matter) to argue — as the Speaker did at at least one point — that Democrats imposed more significant cuts on state services (like public education) back in 2009 and 2010 than have been imposed since the GOP assumed control of the General Assembly  in 2011 and the Governor’s mansion in 2013. This is like blaming FDR for the plunge in federal spending during the Great Depression.

Earth to Speaker Tillis: Yes there were large and problematic state budget cuts in 2009 and 2010, but that’s mostly because state revenues had literally dropped like an anvil as a result of the global Great Recession. Read More

Uncategorized

Can’t wait to hear what that crazy old plutocrat Jack Welch and the Fixed News squawkers  have to say about this headline:

US jobless claims fall to 339K, fewest in 4½ years.

Now, obviously, the economy remains fragile and we have a long way to go. But this news seems to jive with lots of other recent indicators that the economy is, on the whole, trending gradually upwards and that, for all of its problems, things are clearly and demonstrably better than they were when the country was confronting the very real prospect of a second Great Depression in late 2008 and early 2009.

NC Budget and Tax Center

North Carolina’s communities of color were more than two times as likely to live in poverty as whites in 2011, according to a report released last week by the North Carolina Budget and Tax Center. People of color were particularly hard hit by the Great Recession and the previous economic conditions and policy decisions that resulted in less access to pathways to the middle class. U.S. Census Bureau data show that the ongoing economic recovery from the recession is only serving to exacerbate the long-entrenched racial disparities in poverty. Read More