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NC continues to gain jobs, but is losing state employees over pay that isn’t keeping up with inflation

State labor market data released Friday shows that the economic recovery jumpstarted by federal aid continued through October in North Carolina. North Carolina has added jobs every month over the past year, and the state now has more than 200,000 additional jobs than before the COVID-19 pandemic.

On average over the past six months, we’ve gained nearly 18,000 net jobs per month. The most recent hiring data, from September, also shows that hiring has remained robust even as economic headwinds are causing some concern. North Carolina had 216,000 hires in September, only slightly below the same time last year when we had 233,000 hires.

Amid this relatively sunny topline news is a dark cloud created by our state legislature: a failure to ensure that public servants’ pay keeps up with inflation, which means that North Carolina has continued losing state employees that provide the key services our communities need.

Public employee raises over the past two years have fallen far short of inflation so that when we look at real incomes, many state employees effectively lost over 2.5 weeks of pay when current salaries are compared to last year’s. As a result, North Carolina has lost thousands of state employees since last October. We’re not seeing the same losses in the private sector, local government, or federal government, which have all added jobs over the past year. This indicates that this problem stems directly from the policy choices made in Raleigh not to adequately raise employee pay, and instead to divert over $4.1 billion into reserves.

While inflation is gradually coming down, low pay is making is hard to fill vital positions across the state. North Carolina started the school year with over 11,000 vacancies in our public schools. At the Department of Environmental Quality — the agency tasked with protecting air quality and ensuring our drinking water is safe, among other things — more than 1 in 5 positions are vacant. High vacancy and turnover rates at the Department of Health and Human Services mean longer waitlists and fewer people served for crucial services like psychiatric care, even as need has increased.

It’s crucial to address these shortages not only to meet ongoing needs in our state, but also to make sure that North Carolina is ready to steward a wide variety of federal funds that will be made available to our state in the coming years through the federal Infrastructure Investment and Jobs and Inflation Reduction Acts.

Logan Rockefeller Harris is a Senior Policy Analyst with the NC Budget & Tax Center. Patrick McHugh is the BTC’s Research Manager and contributed to this post.

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NC continues to gain jobs, but is losing state employees over pay that isn’t keeping up with inflation