As this week’s edition of The Weekly Briefing made plain, state leaders remain absurdly out of touch with the economic reality on the ground in North Carolina. The following announcement from colleagues at the N.C. Justice Center highlights this problem once more

Jobless workers struggle even as Division of Employment Security announces $600 million in tax cuts to employers
Employment remains more than 4 percentage points below pre-recession levels, according to October data 

Jobless workers continue to struggle with an economy that fails to provide enough jobs and an unemployment insurance system that is ill-equipped to deliver partial wage replacement to stabilize the economy, even as North Carolina’s Division of Employment Security announced $600 million in tax cuts to employers.

Employment levels as a share of the population remains more than 4 percentage points below pre-recession levels, according to today’s announcement on labor market conditions for October 2015.

Last month’s state employment rate was 5.7 percent, the same level as one year ago. However, the number of unemployed North Carolinians has increased over that period by 11,591 jobless workers. The national unemployment rate was 5.0 percent in October, dropping by 0.7 percentage points over the year.

“North Carolina should not be issuing tax cuts for employers when we have failed to reach what are generally agreed to be safe levels for our state’s Unemployment Insurance Trust Fund,” said Alexandra Forter Sirota, Director of the Budget & Tax Center, a project of the North Carolina Justice Center. “Instead, our state policymakers need to re-balance their approach to ensure the system can deliver partial wage replacement to jobless workers and in so doing serve as a stabilizing force in the economy.”

Important trends in the October data also include:

  • The percent of North Carolinians employed is still near historic lows, and below the nation. October numbers showed 57.5 percent of North Carolinians were employed, leaving the state well below employment levels commonplace before the Great Recession. In the mid-2000s, employment levels reached a peak of about 63 percent. The percent of North Carolinians with a job remains below the national average, as it has been since the Great Recession.
  • There are still more North Carolinians out of work than before the Great Recession. There were more than 270,000 North Carolinians looking for work in October, almost 50,000 more than before the Great Recession.
  • North Carolina’s unemployment insurance system only provided temporary wage replacement to 22,545 North Carolinians. The number of jobless North Carolinians receiving unemployment insurance has dropped precipitously since 2013, ranking us 49th in the country on this measure and hindering the ability of the program to serve as a stabilizing force in the economy.

“North Carolina’s labor market is still too weak to ensure jobs are available for all those who seek employment,” Sirota said. “This affects all of us, as wages are falling short of the growth needed to boost the economy in the immediate and long-term.”

For more context on the economic choices facing North Carolina, check out the Budget & Tax Center’s weekly Prosperity Watch platform.

NC Budget and Tax Center

The September local employment numbers highlight the persistent jobs challenge that North Carolina faces. At a time when local economies across North Carolina continue to experience the realities of an uneven recovery that has yet to return to pre-recession conditions, Governor McCrory will likely sign a bill today that will further negatively impact our state’s workers and families.

The expected signing of HB 318 means that the time limit on food assistance will go into effect  for 77 counties that qualify for a waiver due to weak labor market conditions. This could result in up to 105,000 childless North Carolinians losing food assistance, driving up demand at local pantries and holding back consumer spending in local groceries.

The latest labor market data show just how damaging the timing of HB 318 could be. All but one metropolitan area and the overwhelming majority of North Carolina’s 100 counties still have more people looking for work than before the economic collapse in 2007. This trend highlights the persistent jobs challenge North Carolina faces – more people desire to work than are jobs available to meet this demand for employment.

“There is a persistent narrative when assessing local labor market conditions in North Carolina. The recovery has been uneven and is bypassing a lot of people who live in both rural and urban areas,” said Cedric Johnson, Policy Analyst at the Budget & Tax Center, a project of the NC Justice Center. “In light of the labor market news, it is still clear that there are too few jobs for all who want to work in North Carolina.  Moreover, there are also too few skills training opportunities for those who seek retraining for new careers.”

Key findings from the county data include:

  • Only 22 of North Carolina’s 100 counties have reached the 5 percent threshold for unemployment that many economists view as full employment.
  • The number of people looking for work is still higher in 81 counties than it was before the recession.
  • 65 of North Carolina’s 100 counties have not gotten back to pre-recession levels of employment.
  • 16 counties actually lost jobs over the last year.

Key findings from the metropolitan data include:

  • 8 of North Carolina’s 15 metropolitan areas have added jobs since the start of the Great Recession. However, the number of people looking for work has grown much faster in every metropolitan area except one (Hickory-Lenoir-Morganton) during that period.
  • In 14 of North Carolina’s 15 metropolitan areas, the increase in the number of people looking for work is more than 20 percent higher than pre-recession levels.
  • Hickory-Lenoir-Morganton is the only metro area to experience a decline in labor force (2.8 percent), number of employed workers (2.8), and number of workers looking for work (3 percent) since the start of the Great Recession.

The American economy has witnessed the explosive growth of contingent employment—any job in which an individual does not have an explicit or implicit contract for long-term employment—over the past 30 years. In a new report from the Workers’ Rights Project entitled The Age of Contingent Employment: How changes in employment relationships are impacting worker wages, power, and prospects, authors Clermont Ripley and Allan Freyer examine several key trends related to the growth of contingent work, including a special focus on temporary work and charts the impacts on workers, the overall economy, and the fundamental relationship between employer and employee. Key findings include:

  • Contingent employment takes many forms. It includes using labor contractors, temporary help agencies, employee leasing companies or other labor intermediaries, misclassification of employees as independent contractors, franchising, and contracting out services and the production of goods. Employers use contingent workers for the core business functions of the firm (e.g., manufacturing), and not just for peripheral activities like facilities maintenance or clerical support.
  • About one-third of the entire American workforce can be classified as contingent workers. This includes part-time workers (13.2 percent of the total workforce), independent contractors (7.4 percent), self-employed workers (4.4 percent), and a combination of temporary workers hired through agencies, temps hired directly by an employer, and temps hired as contractors (5.6 percent).
  • Employers have increasingly relied on contingent workers as a strategy for keeping down labor costs, a strategy that has cushioned corporate bottom lines and contributed to middle class wage stagnation. Despite historic productivity gains boosting record levels of corporate profitability, employers have sought to keep labor costs low. Instead, they spent these productivity gains on executive compensation and income distributions to shareholders — benefitting wealthy investors at the expense of workers and their wages. That’s why North Carolina’s workers saw their productivity increase by 86 percent, while their hourly compensation increase by just 22 percent.
  • Although some workers may benefit from the flexibility afforded by voluntary nonstandard work, many workers are stuck in contingent work relationships involuntarily—a trend that increases the distance between employers and their employees, reduces wages, weakens worker bargaining power, and presents challenges that our nation’s outdated, employment-related regulatory structure is unable to adequately address.
  • An important form of contingent employment involves temporary work, nonpermanent jobs provided through staffing agencies that supply labor to client companies on a short-term basis.
  • Temp work is growing much faster in North Carolina than in the nation as a whole, a troubling trend since temp work pays a lot less the state’s average wage. Between 2009 and 2014, the number of temp workers grew by 52 percent in North Carolina, compared to 39 percent in the national economy as a whole. North Carolina temp workers earned just $30,627, far less than $45,022 average wage.
  • Temp work in North Carolina has grown as a share of the economy over the past five years, from 2.4 percent in 2009 to 3.4 percent in 2014. This trend matters for workers because it suggests that temporary work is growing at the expense of more permanent and stable work—and that there’s proportionally less stable work available in North Carolina than in the nation as a whole.
  • North Carolina needs more permanent work, not less, in order to provide workers with the stable, regular incomes they need to make ends meet, ensure financial security for themselves and their families, and ensure long-term upward mobility.

For how policymakers can address the growing challenges related to contingent work, follow us below the fold.

Read More


Apologists in the right-wing think tanks continue to do their best to cherry pick and spin the tale of a “Carolina Comeback.” Pretty soon there will be a release from the folks in one of the Pope-funded groups celebrating that North Carolina has the seventh fastest growth rate among states whose names include two “n’s during months with between seven and nine letters in their name.

But when it comes to the reality on the ground for real people, the data surrounding the North Carolina economy remain extremely sobering. NC Justice Center economist Patrick McHugh explains in this new release:

Unemployment declines sharply across the U.S. but grows in North Carolina

October 20, 2015 — Economic growth has reduced the number of unemployed across the United States, but such growth doesn’t seem to be happening in North Carolina.

September labor market data released this morning showed a 14 percent decline in the number of people looking for work over the last year, while the ranks of the unemployed in North Carolina grew over the same period.

“We’re creating jobs, but it’s not enough to actually get everyone back to work,” said Patrick McHugh, economic analyst with the Budget & Tax Center, a project of the NC Justice Center. “With so many people out of work, there’s less pressure on employers to raise pay, which is part of why wages in North Carolina are falling further behind the nation.” Read More

NC Budget and Tax Center

This week marks the 50th anniversary of the Immigration and Nationality Act, which helped to make the United States into a more diverse and economically vibrant country. At the same time however, there is a bill (HB 318) sitting on Governor McCrory’s desk that would make it harder for immigrants to integrate into local communities, make police work more difficult, and hurt North Carolina’s reputation on the global stage.

The Immigration and Nationality Act of 1965 is one of the most important pieces of legislation in our nation’s history. The Act put immigrants from all countries of origin on equal footing, ending a quota system that essentially ensured most new immigrants came from Europe. This shift in policy allowed immigrants from around the world to realize the dream of joining the American experiment, and helped to fuel the last fifty years of economic growth in our country.

Graphic for Post - Immigrant Entrepreneurs Countries of Origin

Examining immigrant business owners’ countries of birth illustrates how opening immigration up to non-European counties has strengthened our economy. As the chart shows, immigrant proprietors have come to North Carolina from all over the world.

The immigrant business community is not just broad, it is deep as well. In North Carolina, immigrants make up less than 8% of the population, but own more than 20% of the main street businesses. In many communities, both rural and urban, immigrant entrepreneurs have helped to revitalize crumbling downtowns and neighborhoods. Read More