Lost jobs in January highlight the importance of the federal rescue plan

Preliminary labor market figures for January underscore why the American Rescue Plan signed into law last week was so vitally needed. After months of slow recovery and a holiday spike in COVID-19 cases, North Carolina lost over 3,000 jobs in January, a clear sign our recovery is far from complete.

The relief plan provides the kind of support at scale needed to turn toward a more just and inclusive recovery. Months of half steps had seriously hampered the pace of recovery in the latter part of 2020, so it’s encouraging to see our elected representatives enacting the kind of bold rescue plan families across North Carolina so desperately need.

Economic challenges facing North Carolina include: 

  • Recovery has slowed dramatically in recent months: North Carolina added fewer than 30,000 jobs in the final quarter of 2020 after recovering over 230,000 jobs in May and June. All told, one-third of the jobs lost since the start of the recession have not been recovered, and North Carolina still needs to add nearly 195,000 jobs to get back to where we were before COVID-19.

  • Recession is over for most highly paid North Carolinians while still devastating low-income workers. While not captured in the headline unemployment figures, job losses have fallen the hardest on North Carolinians with the least financial cushion. Data through mid-January show high paying jobs with annual wages over $60,000 have fully recovered. While the recession is effectively over for many people in good-paying jobs, nearly one quarter of the jobs that paid below $27,000 before the recession are still missing.
  • Job losses are heavily concentrated in some industries, particularly among worst-paid workers: The COVID-19 recession has devastated workers in some industries, while others have almost fully recovered. The largest persistent job losses since February of last year have occurred in industries like Accommodation and Food Service (-68,300), Government (-38,100), Manufacturing (-18,300), Health Care and Social Assistance (22,000), Arts, Entertainment and Recreation (19,500), and Education Services (15,300).

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COVID-19 pandemic continues to devastate the incomes of low-wage workers

For many well-off North Carolinians, however, the recession ended long ago

Almost a year on after the arrival of COVID-19, hundreds of thousands of our state’s worst-paid workers still can’t find a job even as the recession is effectively over for some of the high-wage industries in North Carolina.

Anyone who’s been paying any attention knows COVID-19 is creating outsized suffering for low-wage workers, women, and people of color, but the magnitude of the economic disconnect is still often under-appreciated. In two short months from February to April of last year, nearly 270,000 leisure and hospitality jobs (roughly half of the positions in North Carolina) vanished. Most of the people who were put out of work had been getting paid meager wages and had little financial cushion to fall back on. A long history of occupational segregation and barriers to lucrative careers also meant women and people of color were particularly likely to have their livelihoods disappear.

On the other end of the wage scale, North Carolinians working in finance, business services, technology, and other white collar positions saw their daily lives upended, but many were able to shift to working remotely and most kept pulling down good paychecks. Even at the worst of the recession, 9 out of every 10 professional and business services workers were still on the job, and only 3% of people in finance were out of work

As different as the immediate impacts were, the divide is in many ways even more dramatic today. The recession was effectively over for the best paid North Carolinians by the later part of 2020, but our worst-paid workers are still stuck in a devastating economic hole. By the end of last year, all of the jobs lost to COVID-19 in Professional and Business Services had been recovered while one-fifth of the pre-pandemic jobs (117,500) in leisure and hospitality are still missing.

Patrick McHugh is the Research Manager for the N.C. Budget & Tax Center.

Carrying the torch: Today’s fight for justice is built on generations of struggle in NC

Horror and heroism often walk side-by-side. For every insurrectionist who attacked the U.S. Capitol last month, many more lifted their voices against racism and police violence in streets across our country. For every leader sowing false doubts about the 2020 results, droves of dedicated election workers tended to an honest vote. Amid every tweet downplaying the ravages of COVID-19, millions of American workers put their lives on the line every day to keep our society afloat.

The past year was hardly the first time the angels and demons of the human spirit have fought for the soul of our country. In this time of trial, it’s all the more vital to take strength from the examples of our forebearers, to remember we are the inheritors of a proud tradition of not taking injustice lying down, and that every right we enjoy emerged from intense struggle.

As we carry on the fight for justice, here are a few reminders of why it matters, and the heroes whose torch we have now in our hands.

The Hamlet Fire and a system of “cheap”

One of the worst workplace disasters in recent North Carolina memory happened in 1991, in the small town of Hamlet, when the Imperial Foods chicken processing plant went up in flames, killing 25 workers who were locked inside. Author Bryant Simon spent years trying to understand how the Hamlet fire happened, and what it reveals what he calls a “system of cheap” — a political and economic system that puts workers’ lives in peril, even in normal times, and becomes even the more deadly during times of crisis like COVID-19.

This conversation reflects on what we can learn from the Hamlet fire, how policy choices have shaped reality during COVID-19, and what we can do to truly value working peoples’ lives going forward.

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Legacy of white supremacy continues to create barriers for workers, especially during COVID-19

Black History Month could just as easily be called “American present February.” Nothing in the U.S. is ancient history. Someone who will graduate college this year at age 23 has been alive for nearly 10% of U.S. history, and anyone lucky enough to reach 80 has personally witnessed one-third of the American experience. The presence of the past is particularly plain to see during COVID-19. The mold of the past year was shaped by generations of social and economic policy that layered the burden of COVID-19 most heavily on communities of color.

As a small part of reckoning with our history and celebrating the lives of Black people who have struggled for justice, we’re releasing a few resources over the next few weeks that can be food for thought and reflection.

An overview of what each includes is provided below, but here’s how to skip straight to the resources themselves:

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Latest labor market data highlight NC’s economic struggles, need for more federal assistance

Even before the jump in COVID-19 cases related to holiday travel became clear, local labor market data for November showed the ongoing consequences of federal and state inaction. The most recent aid bill passed by Congress in December provided some long-overdue assistance, but not nearly enough to get families through to the end of the pandemic.

While it’s certainly good Congress finally passed more COVID-19 assistance in December after months of inaction, the financial bridge won’t span the gulf that still exists between where we are now and the other side of this pandemic. As the latest labor market data confirm, COVID-19 is still inflicting the worst pain on many families with the least financial cushion, so leaders in Raleigh and Washington, D.C., still have a lot of work to do to sustain people during this unprecedented crisis.

Economic challenges facing North Carolina include: 

  • Largest cities recovering faster, raising risk of another unbalanced recovery: Some of the worst job losses during the first few months of the pandemic occurred in North Carolina’s largest cities and tourist regions. Over the past few months, cities like Raleigh, Durham, and Charlotte have recovered more of the jobs initially lost during the pandemic, while the scope of the persistent losses remains larger in regional job centers like Asheville, Morganton, Goldsboro, Greensboro, and Rocky Mount. This raises the distinct risk of repeating the experience from the Great Recession when a handful of faster-growing cities recovered years before many other communities got closer to pre-recession levels of employment.
  • COVID-19 has erased all job gains, or deepened losses, since the start of the Great Recession in a majority of counties: Nearly 60 of North Carolina’s 100 counties had fewer jobs in November of this year than before the Great Recession. Many parts of the state had never recovered all of the jobs that disappeared in the Great Recession, so the losses during COVID-19 are further compounding a long-term problem. In many other counties, all or nearly all of the jobs that had been created since 2009 were wiped out in the first few months of the COVID-19 pandemic.

  • North Carolina’s regional employment engines have seen the worst employment losses. Cities across North Carolina that often serve as the employment hubs for their entire regions have been particularly hard hit by the COVID-19 pandemic. Regional job centers that have experienced some of the worst declines since February include Asheville (-8.4%), Hickory-Lenoir-Morganton (-8.3%), Goldsboro (-7.8%), Greensboro-High Point (-7.0%), Greenville (-6.9%), Fayetteville (-6.9%), Wilmington (-6.7%), Rocky Mount (-6.7%), New Bern (-6.6%), Winston-Salem (-6.2%), Durham-Chapel Hill (-6.2%), Raleigh (-6.2%), Charlotte-Concord-Gastonia (-5.8%), and Burlington (-4.7%).

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

For more context on the economic choices facing North Carolina, check out the Budget & Tax Center’s Prosperity Watch report.

Patrick McHugh is the Research Manager at the NC Budget & Tax Center — a project of the North Carolina Justice Center.