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NC Budget and Tax Center

At the heart of the American Dream is the idea that hard work is supposed to pay off—that anyone who works a full time job should be able to make ends and achieve upward mobility over the course of their lives. As discussed in the most recent issue of Prosperity Watch, however, seismic shifts in the global economy away from manufacturing and towards services have pushed this dream further and further away from too many of North Carolina’s workers. See the latest Prosperity Watch for details.

NC Budget and Tax Center, Poverty and Policy Matters

Allan Freyer contributed to this blog post

The American Dream is continuing to slip out of reach for many North Carolinians. Far too often, working hard just isn’t enough to lift many of North Carolina’s low-income workers out of poverty, according to a new report from the NC Budget & Tax Center.

As we mark the 50th anniversary of the War on Poverty, the report finds that the persistence of economic hardship in North Carolina is largely due to a changing economy and the replacement of middle wage jobs in manufacturing with poverty wage jobs in the services sector. As a result, public investments in the safety net—such as food assistance and tax credits for working families—and economic development programs are often all that stand between low-wage workers and deep poverty. Far from failing, these are the programs that have lifted hundreds-of-thousands of Tarheel workers out of poverty while also helped those living just-above the poverty line too.

Specific findings include the following: Read More

NC Budget and Tax Center, Uncategorized

Jim Lind is a decorated US Air Force vet and a software development professional who’s done it all over a 39-year career: managing and developing for commercial industries, for the military, for education systems, for space systems, you name it.

He’s also been unemployed since early 2009 when the Great Recession resulted in major layoffs at his and so many other workplaces. When Jim finally found work for a contractor for Amtrak, the sequester cut that short just 10 weeks into the job.WP_20140220_005-edit-600-web

Jim was one of eight unemployed professionals who met with U.S. Rep. David Price and Wake Tech President Stephen Scott last week to explain the human toll exacted by North Carolina’s reckless changes to its unemployment insurance program, detailed by a recent Budget and Tax Center report on the issue. They also spoke about how important the programs at the community college have been for them.

“The reason I am here is to talk about who the unemployed are. Who are we really. Myths are not helpful for becoming re-employed,” he said.

Jim explained that the federal extensions of unemployment at a higher weekly rate than is available now were a life saver for him, providing the most basic assistance to eat and pay some bills.

“I had to count slices of bread, eggs in the fridge, measure things in ounces, plan when to wash my clothes in order to be able to pay the rent where I was living,” he said. Plus, even looking for work in today’s world requires expensive tools like a cell phone, an Internet connection and computer, a car. “I don’t know how cutting people off…is helpful for people finding work.” Read More

Uncategorized

The fiscal policy wonks at the Budget and Tax Center are out with a new and detailed analysis of the impact of last year’s harshest-in-the-nation cuts to unemployment insurance that were imposed by Gov. McCrory and the General Assembly. The findings? They ain’t pretty:

“Cuts to unemployment insurance in North Carolina have made it harder for jobless families to make ends meet and get back on their feet in an economy that is still providing too few jobs to go around. Contrary to what proponents of the cuts claim, a recent decline in unemployment in North Carolina is largely driven by people leaving the workforce because they cannot find jobs, not due to employment growth. And far from helping the state’s economy, the cuts have left thousands of North Carolinians with less money to spend on food, clothing and other necessities, which also harms local businesses.

Specifically:

• The average weekly benefit for unemployed North Carolinians plunged Read More

NC Budget and Tax Center, Poverty and Policy Matters

North Carolina has the 10th highest poverty rate in the nation—down from 13th last year—with more than 1 in 4 of its children living below the federal poverty line. Our state also faces widespread income inequality and less economic mobility than the nation and the southeastern region. Rather than pursue a mix of tax and budget policies that boosts economic security for middle-class and low-income families, state lawmakers instead enacted a tax plan that shifts taxes away from the wealthy and towards the bottom 80 percent of taxpayers, on average.

The tax plan drains $525 million in available revenue for public investments over the next two years—a figure that balloons to at least $650 million within five years.

Consider what could have been done to help improve a child’s shot at the American Dream if state lawmakers didn’t choose to cut taxes for the wealthy and profitable corporations. Over the next two years, these dollars could have been used to provide a package of poverty-busting and mobility-lifting investments such as:

  • Eliminating the waiting list for the North Caroline pre-Kindergarten program;
  • Keeping and strengthening the state Earned Income Tax Credit, which helps boost the income of families who work in low-wage jobs;
  • Maintaining the income tax deduction for contributions to North Carolina’s 529 college savings plans (which was eliminated in the tax plan); and
  • Maintaining funding for the 10 nonprofits that promote economic development in economically lagging and distressed communities across the state – these entities include the Institute of Minority Economic Development and its Women’s Business Center

Despite lawmakers’ assertions, academic research simply lacks consensus on whether cutting taxes is an effective strategy for boosting the state’s economy and creating more jobs.  However, an established and growing body of research exists that show the value of public investments, which serve as the building blocks of a strong economy and family economic security. Read More