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.

North Carolina’s job growth continued in June, but wages aren’t keeping up with rising costs

Statewide job growth North Carolina is continuing at a fast clip, with nearly 26,000 jobs added in June. The latest data show that the state now has over 130,000 more jobs than at the start of the COVID-19 pandemic, keeping North Carolina ahead of the U.S. by this measure of economic recovery. The percentage of residents working in the state remains stubbornly 1.5 percentage points lower than in the U.S. as whole, a gap that hasn’t shifted much since the Great Recession.

With continued job growth, it’s increasingly important for the state to focus on increasing access to high-quality jobs that provide people with the income they need to support themselves and their families. While wages have grown during the recovery from COVID-19, they’re not keeping up with rising prices. Nationwide, inflation has grown by 9 percent over the past year, compared with a 5 percent growth in wages.

We also know that topline jobs numbers don’t show the still uneven nature of the recovery. As of the beginning of June, research from Opportunity Insights showed that employment rates among North Carolina workers earning $29,000 a year or less were still 20 percent lower than before the pandemic. To build an economy that works for everyone, we need to ensure that North Carolina supports employment and living wages for the people who’ve been left out of the benefits of economic growth.

For charts showing the most recent labor data and COVID-19 job data, visit the NC Budget & Tax Center’s Labor Market page at ncbudget.org/labormarket.

Logan Rockefeller Harris is a senior policy analyst at the N.C. Budget & Tax Center.

Today’s enhanced monthly Child Tax Credit payment could be the last that families receive unless Congress acts to extend this successful policy

Today marks the sixth round of Child Tax Credit (CTC) payments going out to an estimated 1.2 million families in North Carolina, supporting the well-being of nearly two million children in the state. The temporary improvements to the CTC under the American Rescue Plan increased funding available to families, expanded eligibility by making the credit fully refundable, and changed the schedule for distributing funds so that half of the credit is distributed through monthly payments that began on July 15. But unless Congress acts to pass the Build Back Better legislation before the end of the year, December 15 marks the final day that families will receive monthly payments, and the gains that families have seen from the new CTC will be lost.  

Recent research from the Center on Poverty & Social Policy at Columbia University estimates that the October CTC payment kept 3.6 million children across the country from poverty that month. These reductions in poverty translate to long-term benefits in kid’s educational attainment, health as adults, and future earnings. All children, white, Black, and Brown see big benefits from the credit, and the improved CTC is also helping to narrow racial inequities in child poverty. Lower child poverty means real improvements in children’s well-being, like living in safe and stable housing and having enough food to eat. The most common use of the CTC for North Carolina families is to purchase food, and this summer’s payments drove down food insecurity among families that received them. Monthly payments of the CTC are especially important for smoothing family incomes and allowing them to meet monthly expenses. 

Source: Center on Budget and Policy Priorities

Recent analysis from the Center on Budget and Policy Priorities lifts up the state-level gains that will be lost if Congress does not extend the enhanced CTC. 

In North Carolina: 

  • 90% of children experienced an increase in benefits.  
  • Among families with low incomes under $35,000: 
    • 87% spent CTC payments on basic needs, including housing costs, food, utility bills, and clothing. 
    • 93% spent CTC payments on basic needs and/or education costs like school supplies, tuition, or tutoring. 
  • 306,000 children were lifted out of deep poverty or above the poverty line.  

Now is the time to keep making progress towards giving every child the opportunity to thrive in North Carolina and across the country. Poverty is a policy choice and the expanded CTC has shown that our legislators can make the choice to tackle child poverty head on. Now they must pass the Build Back Better bill and extend this successful policy.    

Logan Rockefeller Harris is a Senior Policy Analyst at the N.C. Budget & Tax Center.

Expanded Child Tax Credit has caused big reductions in childhood poverty, but more action is needed

Last week on Sept. 15, the third round of payments for the newly expanded federal Child Tax Credit (CTC) went out to millions of families with children across the country. The CTC is one of the nation’s key anti-poverty programs, and the American Rescue Plan Act made some important — but temporary — changes to the policy. It increased the amount of funding available to families, expanded eligibility by making the credit fully refundable, and changed the schedule for distributing the funds. Half of the funds are now distributed through monthly payments that began on July 15, rather than all payments being distributed in a lump sum when families file their taxes.

The expanded CTC is already leading to dramatic reductions in childhood poverty: Payments in July kept about 3 million children across the country out of poverty that month. To maximize the CTC’s impact in North Carolina, our state leaders must ensure that every eligible family receives the credit, while Congress needs to make these improvements to the CTC permanent.

Recent analysis from the Social Policy Institute explores how families in each state used Child Tax Credit payments. Families earning under $150,000 per year are eligible for monthly payments of $300 for each child under age 6 and $250 for children between the ages of 6 and 17. The Institute’s researchers found that the most common use for North Carolina families was buying food, followed by paying essential bills. Half of families reported using the funds to buy food, and nearly two out of five families said they paid bills. It’s not surprising then that families eligible for the CTC saw a decrease in severe food insecurity after monthly payments began. The share of families experiencing severe food insecurity dropped from 11 percent before payments went out down to 7 percent in the weeks after payments began.

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NC needs to invest in child care assistance if we want to get people back to work

The COVID-19 pandemic has put child care access and affordability front and center. Working parents and early childhood educators have always known how important child care is, but now the need to shore up and transform our early childhood education system is front page news. On Mother’s Day weekend, an op-ed in Raleigh’s News & Observer argued persuasively that if our state really wants to recognize and support North Carolina moms, we need to expand access to child care subsidies.

A look at the data shows just how far North Carolina has to go in order to support eligible families with young children. The average annual cost of care for an infant attending a child care center in the state is $9,650, over $600 more than the current in-state tuition at the University of North Carolina. That’s more than one-third of the state median income for a single mother.

The state’s child care subsidy program uses state and federal funds to cover most of these costs for eligible families, and is a lifeline for working parents who are lucky enough to receive it. But low levels of investment in the subsidy program mean the vast majority of eligible families don’t get access. Generally, children under six are eligible for assistance if their parents are working and their family’s annual income is under 200 percent of the federal poverty level ($53,000 for a family of four). An estimated 226,000 of North Carolina’s children under six are eligible, but the most recent data show only about 38,000 — or 17 percent — received assistance in February 2021. (Another 22,000 school-age children, who are subject to different eligibility rules, also received assistance.)

As the map below shows, the number of eligible children under 6 served varies widely by county. It ranges from just 2% of about 100 eligible children in Hyde County to 37% in Washington County.

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