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The Institute for Emerging Issues wrapped up its forum on the future of work yesterday. The forum brings together leaders from across the state each year to discuss issues of importance to the well-being of the state. This year the topic was the future of work– the ways in which automation and technology are changing how we work and the relationship between workers, employers, consumers and communities.

Despite the projections and well-intentioned guesses about what the future will bring, no one knows for sure what the outcome will be.  What we do know is what we do today can support better economic outcomes for more families, businesses and communities in the state.  Research is clear that wage growth and public policy will be key to ensuring that the future of work has the number and quality of jobs that can boost the economy for everyone.

If this sounds familiar, it should. North Carolina’s wage problem is front and center in the daily lives of workers and the communities where they live today.  Without wages that ensure workers can provide for the basics and spend locally, employers struggle to see the demand for goods and services that allow them to expand and communities are challenged to support the opportunities that build the long-term potential for children’s economic success as adults.  North Carolina’s uneven recovery and elevated hardship today are indicators of what happens when policy doesn’t focus on wages or the ways in which all communities can connect to economic opportunity.

On the first day, a panel of policymakers, Senator Chad Barefoot and Speaker Tim Moore, were joined by Rick Glazier with the North Carolina Justice Center and John Hood with the John Locke Foundation to discuss just where policy can ensure that the future of work delivers greater opportunity and shared prosperity.

John Hood highlighted the critical goal of ensuring that workers have the “capital” to meet their needs and make investments that support advancement of themselves, their families and build assets in their community.  This is indeed the goal and a broadly shared one that is the concern of the vast majority of North Carolinians. A workers’ ability to make ends meet and spend is what the economy needs to function well and expand.  That is why a focus on boosting wages and what communities need to do so, not on reducing the size of government, is needed.

The solutions are readily available to North Carolina policymakers today. They are proven ones that will strengthen the economy for the future. To grow wages, North Carolina must: Read More

Commentary

The Institute for Emerging Issues at N.C. State University is holding the second day of its two-day 2016 Forum on the future of work today. It’s a provocative topic with lots of ramifications for current and future public policy debates. Last fall, economist Patrick McHugh of the N.C. Budget and Tax Center wrote an outstanding “Progressive Voices” essay for N.C. Policy Watch in which he spelled out some of the central issues in this discussion along with some of the steps we need to take. Enjoy this rerun!

RobotsThe future of work in our rapidly changing economy: Don’t fear the robots, so long as we raise wages

By Patrick McHugh

The first time I saw a GPS-equipped bulldozer a decade ago, it was a revelation. The machine could take a set of plans and peel away soil down to exactly the chosen depth, based on satellites tracking the precise location of the bulldozer’s blade in real time.

Today, you probably have GPS in your pocket. GPS made a lot of industries more efficient, but it also has meant that a lot of jobs are no longer necessary. No need to follow earthmoving equipment around with two-person surveying crews, and the GPS-equipped machines allow even seasoned dozer hands to work faster. There’s still an operator in most bulldozers right now, but that may not be the case for much longer.

This is the sort of thing that has many people fretting over whether the next few decades of innovation will make people better or worse off. Some foresee robots dominating a blasted economic landscape, leaving masses of unemployed people struggling for survival. Others tell of a coming technological utopia with humans freed to follow higher pursuits, spending more time with friends and family. The reality will almost certainly fall somewhere in the middle, with the policy choices we make playing a big role in shaping whether the future looks more like purgatory or Eden.

Technology keeps getting smarter. It solves complicated problems that only people could tackle before. Computer programs analyze data, diagnose problems, and write cogent prose (will a rose smell as sweet when named by a computer?). At the same time, nimble robotics are learning to do tricky work in the physical world, like stocking shelves, cooking food, and driving. All of this means that we soon won’t need people to do a lot of the jobs that exist now.

If we make sure this improved productivity translates into rising income for everyone, we will create a bunch of new jobs in new occupations that we still can’t imagine. If enough people have money to buy new goods and services, those new jobs will make up for the work that machines are doing. But if we continue on the path of the past few decades, declining wages will further undermine consumer demand, and there won’t be enough new types of work to replace what is taken over by computers and robots. Read More

Commentary

Our neighbors in the Midwest Money Exchangehad a big victory earlier this year when Cincinnati passed an innovative ordinance aimed at reducing wage theft. Recognizing the devastating impact of this common problem on workers and the local economy, Cincinnati is setting expectations for companies that do business with the city or that receive incentives. These companies must disclose prior labor law violations as part of the bidding process and report to the city any wage or payroll fraud complaints received from employees (including employees of subcontractors) during the performance of the contract. In turn, the city will refer complaints to appropriate agencies and, if an adverse determination is issued, will take steps such as termination of the contract, reduction of the incentives payment, and/or debarment from future contracts.

In 2013, the NC General Assembly clamped down on local governments’ ability to take some of these steps in our state. In its expansion of the public policy known as “preemption,” the state now prohibits cities and counties from placing certain requirements on their contractors. Local governments in North Carolina do have the ability to take some measures to improve worker wellbeing in their communities, as explained in our brief The power of wage policies: how raising public sector wages can promote living incomes and boost the economy  – but legislative action is required to enable North Carolina communities to follow Cincinnati’s lead and put other proactive measures into place to protect workers’ wages.

Commentary

The American economy has witnessed the explosive growth of contingent employment—any job in which an individual does not have an explicit or implicit contract for long-term employment—over the past 30 years. In a new report from the Workers’ Rights Project entitled The Age of Contingent Employment: How changes in employment relationships are impacting worker wages, power, and prospects, authors Clermont Ripley and Allan Freyer examine several key trends related to the growth of contingent work, including a special focus on temporary work and charts the impacts on workers, the overall economy, and the fundamental relationship between employer and employee. Key findings include:

  • Contingent employment takes many forms. It includes using labor contractors, temporary help agencies, employee leasing companies or other labor intermediaries, misclassification of employees as independent contractors, franchising, and contracting out services and the production of goods. Employers use contingent workers for the core business functions of the firm (e.g., manufacturing), and not just for peripheral activities like facilities maintenance or clerical support.
  • About one-third of the entire American workforce can be classified as contingent workers. This includes part-time workers (13.2 percent of the total workforce), independent contractors (7.4 percent), self-employed workers (4.4 percent), and a combination of temporary workers hired through agencies, temps hired directly by an employer, and temps hired as contractors (5.6 percent).
  • Employers have increasingly relied on contingent workers as a strategy for keeping down labor costs, a strategy that has cushioned corporate bottom lines and contributed to middle class wage stagnation. Despite historic productivity gains boosting record levels of corporate profitability, employers have sought to keep labor costs low. Instead, they spent these productivity gains on executive compensation and income distributions to shareholders — benefitting wealthy investors at the expense of workers and their wages. That’s why North Carolina’s workers saw their productivity increase by 86 percent, while their hourly compensation increase by just 22 percent.
  • Although some workers may benefit from the flexibility afforded by voluntary nonstandard work, many workers are stuck in contingent work relationships involuntarily—a trend that increases the distance between employers and their employees, reduces wages, weakens worker bargaining power, and presents challenges that our nation’s outdated, employment-related regulatory structure is unable to adequately address.
  • An important form of contingent employment involves temporary work, nonpermanent jobs provided through staffing agencies that supply labor to client companies on a short-term basis.
  • Temp work is growing much faster in North Carolina than in the nation as a whole, a troubling trend since temp work pays a lot less the state’s average wage. Between 2009 and 2014, the number of temp workers grew by 52 percent in North Carolina, compared to 39 percent in the national economy as a whole. North Carolina temp workers earned just $30,627, far less than $45,022 average wage.
  • Temp work in North Carolina has grown as a share of the economy over the past five years, from 2.4 percent in 2009 to 3.4 percent in 2014. This trend matters for workers because it suggests that temporary work is growing at the expense of more permanent and stable work—and that there’s proportionally less stable work available in North Carolina than in the nation as a whole.
  • North Carolina needs more permanent work, not less, in order to provide workers with the stable, regular incomes they need to make ends meet, ensure financial security for themselves and their families, and ensure long-term upward mobility.

For how policymakers can address the growing challenges related to contingent work, follow us below the fold.

Read More

Commentary

Average working people will be raising their voices today to demand their fair share of the nation’s economic pie. As the good people at the AFL-CIO remind us:

Today is the day for the White House Summit on Worker Voice. Starting at 10:30 a.m. ET, you can watch the summit live right here. The summit is designed to bring together working people, labor leaders, advocates, employers, members of Congress, state and local officials and others to explore ways to make sure that working people are sharing in the benefits of economic growth and have access to a voice on the job.

To learn more about the summit, visit the official White House website.

Meanwhile, workers in North Carolina will gather at the state Legislative Building in Raleigh for the first “People’s Wage Board.” Here are the details:

The Fight for $15 and a union will convene a forum at the state legislature on October 7th to take testimony from workers and supporters and to call for the creation of a “People’s Wage Board” to advocate for raising wages in North Carolina.

What: Underpaid workers testify
When: Wednesday, October 7, 2015 at noon
Where: NC General Assembly Building – 3rd Floor Auditorium, 16 W Jones Street, Raleigh, NC 27601

From the Facebook event page:

Inspired by fast food workers in New York who for years organized, and took bold action that encouraged Governor Cuomo and his appointed Wage Board to recommend $15 an hour by 2020, underpaid workers in North Carolina are coming together to call on elected officials to give us a much needed raise to what we deserve: $15 an hour!

Home healthcare workers, fast food workers, child care workers, community members, and NC State Representative Yvonne Holley are putting together ‘A People’s Wage Board’ to record testimony from underpaid workers at the North Carolina Legislature.

The fastest growing jobs are also the lowest paid. With industries like fast food making $200 billion a year, we know the companies we work for can afford to pay us a living wage of $15 an hour so that we have enough to care for our families.

Stand with us as we call on elected officials to do the right thing, give struggling workers a raise so that we can lift up North Carolina!