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poverty916-1Today’s nominee for most maddening, hypocritical and self-serving tradition in the world of politics is the spectacle of politicians who dedicate the their professional lives to de-funding public services — especially those that serve people  in need — solemnly preaching to us on holidays and/or when the weather is bad about the importance of helping the poor.

Here’s North Carolina’s ultra-right, anti-public safety net Lieutenant Governor this morning on Facebook:

“With these incredibly low temperatures sweeping across our state, let us not forget all of those less fortunate than us. Last month First Lady McCrory and Alice Forest teamed up with the Durham Rescue Mission for a canned food drive. We have been informed that over 2,500 cans of food were collected, and nearly $2,000 donated!

With the cold weather we are experiencing this week, the Durham Rescue Mission is expecting an influx of people. Thank you to to everyone who donates their time and resources to causes like this across our state. Your generosity will ensure that nutritious meals will be available for all who come.”

Isn’t that special? The same fellow who crusades on an almost daily basis against Medicaid expansion, unemployment insurance and any number of other essential safety net programs that would actually make a difference for low income people is all about tossing a few cans of food (and maybe a night in a shelter) to the poor when the weather is bad.

Chris Fitzsimon rightfully described this noxious phenomenon this past Thanksgiving as “cynically suspending the blame.”

“But there’s a disconnect somehow in the holiday message and the rhetoric we hear from many political leaders and right-wing pundits the rest of the time.

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NC Budget and Tax Center

While swinging from one crisis to the next for the last several years, we have often lost sight of some long-term trends that we can’t ignore forever. For the last several decades, the United States has been growing apart, not together. The middle class has been contracting, rising out of poverty remains difficult, and parents doubt whether they can provide a better life for their children than they had. The American Dream, an organizing article of faith that helped to build the most diverse and wealthy nation in human history, is in trouble.

2014 End of Year Charts_wage growth

Over the last 35 years, median wages have hardly moved while people at the top of the income distribution have enjoyed significant income growth. As can be seen in the chart above, after adjusting for inflation the top 20% of wage earners have seen their income grow by more than $5 per hour since 1980, while folks at the median have seen less than half of that growth. This means that less and less of the prosperity generated by the North Carolina economy is going to the middle class. It has been a slow process, and one with many causes, but the trend is clear, increasingly present, and dangerous. If the middle class slowly disappears, the American Dream will go with it.

The long-term trends do not just spell trouble for the middle class. As can be seen below, the last decade has seen an explosion in the number of North Carolina counties that are home to high levels of inequality and poverty. The share of counties with this troubling paring of high-inequality and high-poverty has doubled since 2000, going from roughly 30% to over 60%. This means that in more than half of the counties in our state, income growth is doing little to lift people out of poverty. Again, the sort of trend that saps energy out of the American Dream.

2014 End of Year Charts_inequality and poverty

The potency of the American Dream relies on hard work being rewarded, talent being recognized, and people sharing in the wealth they create. If poor and working North Carolinians’ piece of the pie created keeps getting smaller, we will lose the source of our greatest competitive advantage in the modern economy, the American dream.

Looking back a year end and ahead into the future, the Budget and Tax Center compiled a 2014 Chartbook, which looks at a range of critical economic issues facing North Carolina. The bottom line is that we still have a long way to go and the growth that we are seeing is not exceptional but rather in line with the improving national picture.  The recovery has been built on low-wage jobs resulting in the persistence of elevated poverty levels despite improvements overall. State policy choices, namely the decision to cut taxes for the wealthy few and profitable corporations, have made it impossible to strengthen the infrastructure of opportunity in the state.  The result is that the recovery is bypassing many North Carolinians and communities and contributing to the growing divide in experience of opportunity and prosperity.

Commentary

More than three-million Americans will get a raise tomorrow thanks to common sense new laws in 20 states. Not surprisingly, North Carolinians will not be on the list. This is from a post this morning at Think Progress:

On January 1, 20 states will raise their minimum wages, while one — New York — will increase its wage on Wednesday.

That means that all told, 3.1 million American workers will ring in the New Year with a pay raise.

Eleven states and Washington, DC are increasing their minimum wages thanks to changes in the law either by legislation passed by lawmakers or referenda passed by voters. Nine others will see an automatic increase because their wages are indexed to rise with inflation. Currently, 15 states have automatic increases built into their minimum wages, unlike the federal law.

The January 1 raises range from a 12-cent boost in Florida, whose minimum wage will increase to $8.05, to a $1.25 increase in South Dakota, bringing its wage to $8.50.

The increases in the New Year will mean that in 2015, the majority of states — 29 and Washington, DC — will have minimum wages set above the federal level of $7.25 an hour. They will also mean that 60 percent of all American workers will live in a state with a higher minimum wage.

Another half million workers will get a raise later in 2015, when legislation passed in Delaware and Minnesota to raise their wages goes into effect.

Meanwhile, of course, the minimum wage here in Pope-land remains stuck at a miserly $7.25 with essentially zero prospects of rising anytime soon and the inhabitants of the right-wing think tanks calling for its abolition.

Happy New Year!

minwage-2015

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.

Commentary

ThanksgivingIf you’re preparing for the inevitable political discussions that will accompany your family get-togethers this week, here are three new Thanksgiving-themed posts that might help you out:

#1 is today’s Fitzsimon File, which highlights the hypocritical change of heart that so many conservative politicians display toward people in need around the holidays. As Chris notes, the disconnect between what the politicians say about the same needy people during the holidays and the other 11 months of the years is frequently breathtaking.

#2 is a new Q&A from the N.C. Budget and Tax Center entitled “How to talk about the economy and taxes with your family.” Here’s an example:

WHEN THEY SAY: “This state is spending more than ever on public education.”

YOU SAY: We’re funding public schools in NC nearly 6 percent less than in 2008 when you adjust for how much things cost.  This would be like the Panthers claiming a touchdown at the 6 yard line.

As the economy improves—and it is improving—we need to invest in our public schools to ensure that we educate our kids and build a sound foundation for future economic growth. Without investing more, we can’t ensure that our classrooms, teachers and students have the cutting-edge tools to improve learning.

Finally, #3 is this morning’s edition of the Weekly Briefing (“Food for thought on the immigration question”) in which several key facts are spelled out (and myths exposed) about President Obama’s executive order on immigration last week. For example: Read More