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.


Jobs ImageAs state lawmakers continue to go about the business of overhauling important aspects of state government “on the fly” with complex, last-minute proposals that receive only superficial review in kangaroo committee meetings — see, for example, the Senate’s latest mad effort to privatize the state’s Medicaid system in the waning days of the 2014 session — here’s something new and unusual: an actual thorough and thoughtful report on a critically important and under-reported subject that’s not just a collection of soundbites.

The report, not surprisingly, comes from the good folks at the N.C Budget and Tax Center and it deals with the unsexy but vital subject of how North Carolina rebuilds its middle class. The central finding: We ain’t gonna’ succeed by trying to do it on the cheap and/or relying upon race-to-the-bottom tax cuts and low-wage jobs. This is from the release that accompanied the report this morning: Read More


In case you’re wondering about the book he’ll be promoting at next week’s N.C. Policy Watch Crucial Conversation luncheon, today’s Weekly Briefing provides a brief review. of veteran journalist Hedrick Smith’s newest effort, which is entitled Who Stole the American Dream?

The bottom line: It’s definitely worth your time, money and effort. It’s not really a “feel good” book, but you’ll have a much, much better understanding of how America got into the fix in which it finds itself. There are also some promising and hopeful recommendations for what the hell we do to get out the current situation.

Click here to read the article.


Please join the staff of NC Policy Watch for a very special, Crucial Conversation luncheon:

Who Stole the American Dream? A conversation with legendary American journalist Hedrick Smith.

Hedrick Smith, Pulitzer Prize-winning former The New York Times reporter and editor and Emmy award-winning producer/correspondent, has established himself over the past 50 years as one of America’s most distinguished journalists.

His new book, Who Stole the American Dream, steps back from the partisan fever of the 2012 campaign to explain how we got to where we are today—how America moved from an era of middle class prosperity and power, effective bipartisanship and grass roots activism to today’s polarized gridlock, unequal democracy and an even more unequal economy that has unraveled the American Dream for millions of middle class families.

Don’t miss the chance to hear from this extraordinary American at this critical moment in our national political conversation. Read More


In case you missed them, there were two very different but equally powerful history lessons that were made available online in recent days:

#1 – The first came from a professor of history, Duke University’s William Chafe, whose op-ed in Raleigh’s News & Observer provided a refresher course on the close link between the rise and fall of the middle class and our ebbing and flowing societal commitment to public investments.

#2 – The second came from author Larkin Warren whose piece for the New York Times (“I Was a Welfare Mother”) provides a powerful refutation of those who seek to “divide and conquer” or simply ignore the Americans who find themselves, at times, “dependent” on public assistance.

Great stuff.