Depictions of the North Carolina economy range from overly rosy to falsely apocalyptic, but the reality falls squarely in the middle, according to labor market data released today. The final state-level economic readings for 2016 show a decidedly mixed economic picture.
“These have not been the best of times, but they haven’t been the worst of times either,” said Patrick McHugh, policy analyst with the Budget & Tax Center, a project of the NC Justice Center. “The United States has experienced the longest period of a national economic expansion in generations over the last six-plus years. But growth has been modest, wages are just starting to improve, and some communities have never fully recovered.”
The December labor market data underscore a number of important economic realities, including:
- North Carolina has benefitted from a historically long period of national economic growth: December marked the 75th month of uninterrupted economic growth nationally, by far the longest such run in a generation. The second-longest period in the last few decades happened between July of 1986 and June of 1990, a total of only 48 months. At various points in the last six years North Carolina has lagged behind national rate of growth and at other times has been slightly ahead. Yet the fundamental basis for growth has been the slow brightening of the national economic picture.
- North Carolina still needs a raise: A tightening labor market has finally produced several months of decent wage gains across the country, but an hour’s work for the average North Carolina worker still pays around $2.00 less than the national average. North Carolina has witnessed a boom in low-wage work over the last several years, leaving many workers on the brink on financial ruin. Raising the state minimum wage to $12 an hour would help 1.3 million North Carolinians to support their families, and would boost overall economic growth by growing consumer demand by billions of dollars a year. Reinstating the state Earned Income Tax Credit can also reduce working poverty and increase consumer demand.
- Support North Carolinians looking for work: There were approximately 251,000 North Carolinians looking for work last month. In a changing and challenging economy, the state needs an unemployment insurance system that is up to the task, so that people who lose a job through no fault of their own don’t lose everything as they search for a new job or train for a new career. Latest data from the U.S. Department of Labor ranks North Carolina last in the share of jobless workers receiving unemployment insurance, with just 1 in 10 jobless workers doing so.
- Help people reconnect with the labor market: Job growth in North Carolina has not kept pace with the state’s growing population over the last several years. Approximately 59 percent of North Carolinians had a job in December, still well below what the state experienced in the 1990s and 2000s. There are likely nearly 200,000 people in North Carolina that are not officially counted as unemployed but who would have been part of the labor force in earlier periods of economic growth. This fact reflects a lack of concerted investment to ensure that people who lost their jobs during the recession can access the training needed to land new positions and, in many instances, entirely new careers.
For more context on the economic choices facing North Carolina, check out the Budget & Tax Center’s weekly Prosperity Watch platform.