In case you missed it, the latest edition of the Justice Center’s “Prosperity Watch” has some less-than-encourgaing news about the “Carolina Comeback”:

With wages stagnating, the price of many necessities soars

Getting by is getting harder in North Carolina. The cost of some basic necessities are growing faster than wages in North Carolina, catching households that have to spend the bulk of their income on things like food and housing in a tightening vice. When families don’t earn enough to make ends meet, they can’t buy goods and services that provide jobs for other North Carolinians, so the entire economy slows down.

Inflation has been low over the last year or so, with some economists arguing that this should blunt concerns over wage stagnation. From the end of 2007 through July of this year, the cost of all goods and services that the average household purchases increased by 12.6%, while wages increased by almost the same amount. However, as can be seen above, the cost of essential needs like food and shelter has actually outpaced many other types of consumer goods. The price of shelter increased by 14.5% from December 2007 to mid-2015, and the cost of food went up almost 20% during that same period, growth that outpaces wages in both instances.

The practical effect of these trends is that families living in poverty are feeling the squeeze more than the average household. It should come as no surprise that low-income families are forced to spend a larger share of their income on basic necessities than their more prosperous neighbors.

For example, households in the bottom fifth of income spend 16% of their outlays on food, compared to 11% for the top income group. Households at the bottom of the income distribution spend over 40% of their budget on housing, while the top group comes in around 30%. The real world consequence of this is that poorer families have seen the cost of what they have to spend their money on go up much faster than middle of high income families.

High-level economic data can often shield the most economically vulnerable from view, masking the daily challenges that arise when wages don’t keep up with the growing costs of the basics.  Before anyone declares victory in North Carolina, we need to see wage growth that allows working people, and the economy, to make progress.

As #WageWeek continues to celebrate local and state efforts to improve wages across the country, The Progressive Pulse is highlighting the work of advocates, businesses, and elected officials engaged in innovative efforts to raise wages in local communities across North Carolina. This blog post is the next in this series, and represents a guest post from Carl Rist, board member of Durham Peoples Alliance and convener of the Economic Inequality Action team.

These are strange times we live in. Recognizing the growing gap between rich and poor, our President has described economic inequality as the defining issue of our time. The presidential candidates from both parties are now talking openly about growing inequality, and yet, it’s now been six years since minimum wage workers got a raise.

In Durham, NC, we’ve launched an innovative effort to recognize employers that pay a “living wage” and raise up the importance of living wages in our community. Durham has long been among the leading cities when it comes to promoting living wages. Durham was the first city in North Carolina and one of the first in the nation to pass a living wage ordinance in the late 1990s. More recently, with new data from the NC Justice Center that shows that Durham has the highest median hourly wage in the state, but the 86th worst income inequality (our of our state’s 100 counties), concern has been growing about the growing gap between rich and poor in the Bull City.

When a local progressive group, the Durham People’s Alliance, began studying the issue and possible solutions, it became clear that finding a local policy solution to this growing problem would be challenging, Two years ago, the General Assembly weakened all living wage ordinances in the state by removing the ability of these ordinances to apply to all city and county contractors. What’s more, a web of state preemption laws related to our state’s constitution keeps us from passing local policies, such as local minimum wage ordinances, that would apply to all private employers.

That’s why members of the Economic Inequality “action team” of the People’s Alliance decided to work with private employers to voluntarily raise wages for workers in Durham.

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As #WageWeek continues to celebrate local and state efforts to improve wages across the country, a growing campaign for quality wages for home healthcare workers and quality care for seniors launched in Raleigh on Monday at a Crucial Conversation event hosted by NC Policy Watch.

Workers, legislators, and advocates spoke movingly at the event about the crucial link between paying caregivers better wages and providing seniors with the stability in care they need to spend their lives in dignity.

At a time when our growing population of seniors is driving rapid growth in the number of workers providing their care, it is more important than ever to address the harsh reality that workers in caregiving occupations are among the lowest paid in our economy—earning on average $5 less an hour than workers in the overall economy.

Because these caregivers earn so little, they are forced to work second and third jobs just to make ends meet and afford the basics for their families. Balancing so many jobs with different hours often causes dramatic disruptions in their ability to provide continuous, stable care to the seniors who rely on them.

And as became clear over the course of the conversation, a big contributor to this problem involves the state’s Medicaid program, which reimburses seniors for long-term care and disability services. Medicaid largely sets the overall framework for private insurance reimbursements, and after years of budget cuts, North Carolina’s program now reimburses seniors $4 dollars an hour less than the national average.

A lower reimbursement rate for care means less money for the homecare employers arranging senior care, and even lower wages for the workers actually providing the care.

Something must be done to raise caregiver wages, and Monday’s conversation marked a good first step in raising awareness on this important issues.


Notwithstanding the latest oblivious comments of Crown Prince Jeb, the drumbeat demanding a significant increase in the national minimum wage continues to grow louder and louder — both at the grassroots level and in the world of data and research.

Confirmation of the latter can be found in two news studies highlighted last week by the wonks at the Economic Policy Institute.

In study #1, researchers at the federal Bureau of Labor Statistics found that pay for average American workers is and has been stagnant. As EPI President Lawrence Mishel explained in a post last week:

“Their analysis confirms that there has been very broad-based stagnant pay whether one examines just wages or a more comprehensive compensation measure that also incorporates changes in health, pension, and other benefits. The bottom 80 percent of workers had stagnant or declining hourly compensation while the bottom 88 percent of workers had stagnant or declining wages.”

Study #2 comes from EPI’s David Cooper. Here are the key findings:

  • A $12 minimum wage in 2020 would undo the erosion in value of the minimum wage that took place largely in the 1980s. It would also reverse the growth in wage inequality between low-and middle-wage workers over the past generation.
  • Raising the minimum wage to $12 by 2020 would directly or indirectly lift wages for 35.1 million workers—more than one in four U.S. workers. Read More

As Think Progress reports this morning, there’s good news today for average American workers in the new proposed rule from the Obama administration:

“On Tuesday morning, the Department of Labor released its proposed changes to the rules regarding who is eligible for overtime pay to expand the coverage to more workers.

The proposal would increase the salary threshold to $50,440 by 2016, meaning anyone who makes that much or less would have to be paid time-and-a-half for putting in more than 40 hours a week. It would also increase the total annual compensation a worker would need to make to be exempted as a highly compensated employee, raising it to $122,148 a year for full-time salaried workers. And it would automatically update both requirements to make sure only actual executives and administrative and professional workers get exempted.

On a call with the media, Labor Secretary Thomas Perez estimated that for the subset of workers who work more than 40 hours a week and will become newly eligible for overtime pay, they will collectively see $1.2 billion to $1.3 billion in extra compensation as a result of the change.”

This is precisely the kind of rule change we’ll need lots more of (e.g. a big boost in the minimum wage) if the nation is going to address its destructive and mushrooming gap between the haves and the have nots. Let’s hope the administration keeps ’em coming.