NC Budget and Tax Center

What’s at stake in today’s Supreme Court hearing on immigration – family integrity and a lot of worker income

The US Supreme Court hears oral argument today in the case of Texas v. United States, a challenge to the Obama Administration’s executive order to protect the parents of U.S. citizens and legal residents from deportation, commonly known as DAPA.

If upheld, DAPA will allow several million of immigrant parents nationwide to step out of the shadows, which enables them to fully participate in their local economies, and could raise the wages of North Carolina workers — immigrant and US-born alike. As we reported last year, DAPA alone could increase North Carolina workers’ income by over $150 million per year and lift over 5,000 children out of poverty.

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NC Budget and Tax Center

Unemployment much higher than official rate

North Carolina’s economy is still not creating enough job opportunities. According to the latest unemployment figures, there are more than a quarter million people actively looking for work across the state. However, the problem goes much deeper. As shown below, the unemployment rate is likely closer to 10% if we account for all of the people who have left the labor force because there are not enough job opportunities, a group commonly referred to as “missing workers”.

Missing Workers Graphic - Feb 2016

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Commentary

Economist: Persistent unemployment still holding down NC wages

jobseconomyThe McCrory administration keeps peddling the idea of a “Carolina Comeback,” but it sure doesn’t feel like it’s happening on the ground. Maybe that’s because despite the regular announcements from the Governor’s office of business start-ups and expansions (sometimes with as few as 10 or 15 jobs), the state continues to suffer from a toxic combination of massive layoffs like the ones at Freightliner and MillerCoors Brewing and depressed wages for middle class workers.

New analysis from economist Patrick McHugh at the Budget and Tax Center confirms this hard truth:

North Carolina’s economy continues to leave many people looking for work, and even more hoping for a raise. While the national unemployment rate dipped below 5 percent for the first time since the Great Recession, North Carolina’s rate remained unchanged in January, holding at 5.6 percent.

“We keep hearing that robust wage growth is just around the corner but, if that’s true, we might be in a traffic circle.” said Patrick McHugh of the North Carolina Budget and Tax Center. “North Carolina’s economy simply isn’t creating enough jobs for everyone that wants to work, and that’s holding down wages for many people who have a job.”

Important trends in the September data also include:

  • North Carolina pay remains below the national average. The average weekly paycheck in North Carolina came in roughly $100 below the national mark in January. While wages in North Carolina have historically been lower than the national average, the gap has expanded substantially in the last few years. Compared to January 2012, when North Carolina weekly wages were roughly $58 below the nation, the gap has widened considerably.
  • Still more North Carolinians out of work than before the Great Recession: There were over 265,000 North Carolinians looking for work in September, approximately 38,500 more than before the Great Recession.
  • Percent of North Carolinians employed still near historic lows, and below the nation: North Carolina remains well below the level of employment that was commonplace before the Great Recession. In the mid-2000’s, 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

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

Focus on wages to ensure the future of work works for all North Carolinians

The Institute for Emerging Issues wrapped up its forum on the future of work yesterday. The forum brings together leaders from across the state each year to discuss issues of importance to the well-being of the state. This year the topic was the future of work– the ways in which automation and technology are changing how we work and the relationship between workers, employers, consumers and communities.

Despite the projections and well-intentioned guesses about what the future will bring, no one knows for sure what the outcome will be.  What we do know is what we do today can support better economic outcomes for more families, businesses and communities in the state.  Research is clear that wage growth and public policy will be key to ensuring that the future of work has the number and quality of jobs that can boost the economy for everyone.

If this sounds familiar, it should. North Carolina’s wage problem is front and center in the daily lives of workers and the communities where they live today.  Without wages that ensure workers can provide for the basics and spend locally, employers struggle to see the demand for goods and services that allow them to expand and communities are challenged to support the opportunities that build the long-term potential for children’s economic success as adults.  North Carolina’s uneven recovery and elevated hardship today are indicators of what happens when policy doesn’t focus on wages or the ways in which all communities can connect to economic opportunity.

On the first day, a panel of policymakers, Senator Chad Barefoot and Speaker Tim Moore, were joined by Rick Glazier with the North Carolina Justice Center and John Hood with the John Locke Foundation to discuss just where policy can ensure that the future of work delivers greater opportunity and shared prosperity.

John Hood highlighted the critical goal of ensuring that workers have the “capital” to meet their needs and make investments that support advancement of themselves, their families and build assets in their community.  This is indeed the goal and a broadly shared one that is the concern of the vast majority of North Carolinians. A workers’ ability to make ends meet and spend is what the economy needs to function well and expand.  That is why a focus on boosting wages and what communities need to do so, not on reducing the size of government, is needed.

The solutions are readily available to North Carolina policymakers today. They are proven ones that will strengthen the economy for the future. To grow wages, North Carolina must: Read more

Commentary

The future of work: What we must do to cope with impending changes

The Institute for Emerging Issues at N.C. State University is holding the second day of its two-day 2016 Forum on the future of work today. It’s a provocative topic with lots of ramifications for current and future public policy debates. Last fall, economist Patrick McHugh of the N.C. Budget and Tax Center wrote an outstanding “Progressive Voices” essay for N.C. Policy Watch in which he spelled out some of the central issues in this discussion along with some of the steps we need to take. Enjoy this rerun!

RobotsThe future of work in our rapidly changing economy: Don’t fear the robots, so long as we raise wages

By Patrick McHugh

The first time I saw a GPS-equipped bulldozer a decade ago, it was a revelation. The machine could take a set of plans and peel away soil down to exactly the chosen depth, based on satellites tracking the precise location of the bulldozer’s blade in real time.

Today, you probably have GPS in your pocket. GPS made a lot of industries more efficient, but it also has meant that a lot of jobs are no longer necessary. No need to follow earthmoving equipment around with two-person surveying crews, and the GPS-equipped machines allow even seasoned dozer hands to work faster. There’s still an operator in most bulldozers right now, but that may not be the case for much longer.

This is the sort of thing that has many people fretting over whether the next few decades of innovation will make people better or worse off. Some foresee robots dominating a blasted economic landscape, leaving masses of unemployed people struggling for survival. Others tell of a coming technological utopia with humans freed to follow higher pursuits, spending more time with friends and family. The reality will almost certainly fall somewhere in the middle, with the policy choices we make playing a big role in shaping whether the future looks more like purgatory or Eden.

Technology keeps getting smarter. It solves complicated problems that only people could tackle before. Computer programs analyze data, diagnose problems, and write cogent prose (will a rose smell as sweet when named by a computer?). At the same time, nimble robotics are learning to do tricky work in the physical world, like stocking shelves, cooking food, and driving. All of this means that we soon won’t need people to do a lot of the jobs that exist now.

If we make sure this improved productivity translates into rising income for everyone, we will create a bunch of new jobs in new occupations that we still can’t imagine. If enough people have money to buy new goods and services, those new jobs will make up for the work that machines are doing. But if we continue on the path of the past few decades, declining wages will further undermine consumer demand, and there won’t be enough new types of work to replace what is taken over by computers and robots. Read more