Commentary, News

The latest “Prosperity Watch” update from the folks at the N.C. Budget and Tax Center makes clear that if there is any kind of “Carolina Comeback,” it is pretty much bypassing our small towns:

As of September 2015, 22 of the state’s 25 smaller cities and towns known as micropolitan areas continued to have more unemployed people than before September 2007 just before the Great Recession began.

Persistent high numbers of unemployed are occurring even as the unemployment rate declines.  This rate drop masks the range of challenges in weak labor markets including insufficient job creation to meet the growing population, declining numbers in the labor force and the resulting failure of wages for the average worker to increase.

For the state’s micropolitan areas with elevated numbers of unemployed, 17 also continued to experience a lower number of employed.  Of the three areas where the number of unemployed decline, Mount Airy, Rockingham and Laurinburg, the labor force and number of employed also declined over the period.  This demonstrates that a decline in the number of unemployed alone is not sufficient indication of a healthy labor market.

In order to see improvement in the labor markets of micropolitan areas as well as the state, it is important to look for increases in the number of employed, growth or stability in the labor force AND declines in the number of unemployed.


2015 Fiscal Year State Budget, NC Budget and Tax Center, Women and the Economy

One of the most pressing concerns for any working family with children in North Carolina is to figure out a child care arrangement for children that allows parents to work and provide for their family, and allows children to learn and grow in a safe and stimulating setting when not in parental care. This is especially challenging because of the high cost of child care, as noted in these recently released state fact sheets by Child Care Aware of America. There are a few options available for families who earn low to moderate wages including the child care subsidy program which provides financial assistance to working families who need help paying for child care. Unfortunately this critical building block that makes life work for working families has been crumbling due to recent policy decisions by North Carolina lawmakers.

In our newest edition of Prosperity Watch, we feature a report released this month by NC Child detailing the impact made by child care subsidy policy changes passed by North Carolina lawmakers last year. These changes amounted to the loss of financial assistance for thousands of North Carolina families, including reducing income eligibility levels to qualify for the program, elimination of prorated fees for part-time child care (meaning many families will no longer be able to afford care), as well as counting income of a non-parent relative caregiver like a grandparent against the child’s eligibility for subsidies.

The map below provides a county by county breakdown of the more than 6,000 children who have lost or will lose access to child care subsidies from the change to the income eligibility provision alone.

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Budget and Tax Center economist Patrick McHugh is out with a powerful new report entitled “Growth Without Prosperity: Seven years After the Great Recession Started, Recovery Still Eludes North Carolina.” This is from the release that accompanied the report:

The worst of the Great Recession is behind us, but the damage lingers, weighing down communities and families across North Carolina. We are now seven years removed from the financial crisis of 2008, but in North Carolina wages are down, job creation is lagging, and many communities are still stuck in recession.

Given all of the positive headlines lately, it’s easy to get the impression that the recovery is in full swing. Last year was the best since the financial crisis, with North Carolina and the nation finally getting back to the number of jobs that existed before the recession. The unemployment rate has also been dropping since the bottom of the Great Recession in 2009. However, these positive trends do not tell the whole story, particularly in North Carolina.

There are still not enough jobs for everyone who wants to work in North Carolina, but that’s far from the only problem. Simply put, North Carolina’s economy is not working for everyone:

Growth without prosperity: Economic output has rebounded nicely since the worst days of the recession, but it is not translating into larger paychecks for many North Carolinians. Adjusting for inflation, gross state product—which measures the value of all goods and services sold—is up 18.5% compared to 2007, but wages are actually down slightly. Read More

NC Budget and Tax Center

Last week voters in four states–Arkansas, Alaska, Nebraska and South Dakota–approved minimum wage increases that will address in part the eroding value of their state’s minimum wage for workers earning at the lowest end of the wage distribution.  As of January 1st, at least 25 states will have minimum wages higher than the federal level of $7.25.

It turns out voters and state policymakers recognize that the wage floor must have some connection to what workers need to make ends meet and what wage conditions are in the labor market overall.

At Prosperity Watch this week, the Budget & Tax Center looked at the minimum wage to median wage ratio in North Carolina over time.  This ratio signals the strength of a minimum wage relative to local labor market conditions.  The lower the ratio, the fewer goods and services a worker can purchase for every additional hour worked. North Carolina’s minimum wage to median wage ratio fell from 64.4 percent in 1979 to 41.2 percent in 2013.  Find out more at Prosperity Watch here.

NC Budget and Tax Center

This week’s Prosperity Watch uses newly available data from the Economic Policy Institute to shed light on the experience of unemployment for different groups in North Carolina.  While the state performs better than the nation by having a lower barrier to employment for African-American and Latino workers in particular, the unemployment rate for these groups still remains far above where it was before the Great Recession started and is still greater than that for white workers. You can check out the full Prosperity Watch here.

The Economic Policy Institute data is presented in this interactive map that shows North Carolina’s better than average performance in the race to recovery for all groups but the continued need to focus public policies that would reduce barriers for workers of color in our state.