Commentary, NC Budget and Tax Center, Trump Administration

Donald Trump promised manufacturing and construction jobs. He didn’t deliver.

President Trump

The gap between what comes out of President Trump’s mouth and reality is often big enough to drive one of the Mack Trucks he so adores through.

Trump promised manufacturing and construction would blossom under his tutelage and has recently turned to claiming he’s delivering on that pledge. Problem is: Reality tells a decidedly different story.

North Carolina job growth in manufacturing and construction collapsed over the past few years. North Carolina construction employment in 2019 was essentially flat, and we lost nearly 2,000 manufacturing jobs last year.

It would be one thing if both industries were already roaring along at peak output, but neither has recovered to anything close to the levels of employment they provided before the Great Recession. The construction trades employ 33,000 fewer North Carolinians than before the recession, and our state has lost 62,000 manufacturing jobs over the same period of time. The scale of these middle-class job losses in the 13 years since the start of the recession is staggering. The combined decline in manufacturing and construction employment is larger than the total working population of cities like Fayetteville, Wilmington, or Cary.

The President did not single-handedly cause the collapse of manufacturing and construction job growth in North Carolina, but his policy record isn’t anything to write home about. President Trump couldn’t muster the leadership to pass his promised infrastructure initiative that could have boosted both manufacturing and construction employment. Not only has imposing tariffs on friends and adversaries alike failed to bring manufacturing back from overseas, Trump’s trade wars have hurt North Carolina manufacturers who export to other countries. It’s difficult to say precisely how much of the drop-off in manufacturing employment is directly due to the President’s trade conflicts, but his policies have certainly cut into North Carolina’s billions of dollars in exports.

However much of the responsibility he directly bears, both industries posted larger gains in 2014 and 2015 than during any year of the Trump presidency. For a president who claimed that only he could fix our upside-down economy, that’s a poor showing.

As outrageous as Trump’s promises were, the real tragedy is playing out in communities and living rooms across North Carolina. Many of the people who once made a good living in construction and manufacturing have lost the economic security they fought so hard to achieve.

The good-paying jobs being created in North Carolina today are highly concentrated in a few metropolitan areas and generally require advanced technical training in fields far removed from manufacturing and construction. As a result, many of the North Carolinians who used to earn enough to get by and save a bit for the future have been forced into low-wage jobs that don’t pay the bills.

Patrick McHugh is a senior policy analyst for the N.C. Justice Center’s Budget & Tax Center. Policy Watch is a project of the Justice Center. 

Housing, NC Budget and Tax Center

Durham tragedy shows why we need to end the cycle of under-investment in public housing

The tragedies at McDougald Terrace, Durham’s largest and oldest public housing complex, have shaken the community. Authorities evacuated hundreds of families from their homes into hotel rooms after about 40 percent of appliances at McDougald Terrace apartments were found to be emitting carbon monoxide. Housing advocates in Durham have argued that one reason for these problems is inadequate federal funding. Unfortunately, the problem is much bigger than one housing complex. In fact, there are dozens of publicly supported housing developments throughout North Carolina that received failing grades according to inspections in 2019 by the Department of Housing and Urban Development’s Real Estate Assessment Center.

Apartment complexes subsidized by federal dollars undergo physical inspections, which aim to ensure that these developments are safe and sanitary places to live. In 2019, 24 of the 227 developments that were inspected received a failing grade (below 60 on a 100-point scale). Reporting by ProPublica suggests that residents in many developments with a passing inspection grade still experience serious health and safety issues.

The map below shows the housing developments that received a failing grade in North Carolina in 2019.

Three out of the four developments with the lowest scores in North Carolina are in Durham County; McDougald Terrace tied for third lowest with a score of 31. The housing development with the lowest score is Hillcrest in Wilmington with a score of 27 out of 100.

It shouldn’t take three infant deaths to wake us up to the needs of our neighbors. As Samuel Gunter of the NC Housing Coalition said last week, “We have criminally underfunded our public housing system in this country for decades.” When we continue to neglect the needs of our neighbors, everyone suffers.

The community response to McDougald Terrace has been inspiring. This Martin Luther King Jr. Day, many will seize the opportunity to serve their community by donating supplies or volunteering their time. But if we want to build safe communities for the long term, we need to end the cycle of under-investment in public housing. That work may start in Durham.

Commentary, NC Budget and Tax Center

Report: Children, teachers, parents benefit from early childcare and education system

N.C.’s youngest children would benefit from a high-quality early child-care and education system. So would everyone in our communities.

New research estimates that a “values-based” early child and education (ECE) system would benefit North Carolina’s children, teachers, and parents. A comprehensive publicly financed system that compensates educators fairly could serve between 368,000 and 485,000 children and would employ between 152,000 and 205,000 ECE teachers at fair wages once fully implemented. 

The report comes as the state must grapple with the growing evidence  reinforced in December by the court-ordered report from West Ed on the state’s failure to provide the constitutionally required sound, basic education — that North Carolina needs to consider all the ways in which children must be supported to thrive.  We must also consider the reality that as a state we are not supporting the education and brain development of our youngest children with a high-quality early child care and education system to help them thrive. 

The report, from Economic Policy Institute (EPI) and the University of California, Berkeley’s Center for the Study of Child Care Employment (CSCCE), explains that many proposals for ECE reform have focused primarily on improving access and affordability for families, but have ignored the elephant in the room: ECE is substantially “funded” through low teacher pay and inadequate supports for ECE teachers, who are primarily women  specifically, women of color.  It considers a bold proposition — leveraging public financing to reach more kids with quality care. 

The authors find that ECE teachers in North Carolina with a bachelor’s degree are paid 28.8% less than their colleagues in the K-8 system. And the poverty rate for early educators is 17.6%, much higher than North Carolina workers in general (10.6%) and more than 7.4 times as high as other teachers. 

Policymakers and other stakeholders in North Carolina have an opportunity to disrupt this problematic status quo and ensure that North Carolina’s system has the funding it needs to work effectively for children, families, and teachers.   

The federal government already provides North Carolina about $650 million annually, and parents pay $1.1 billion.  Moreover, with recent agreement reached in Congress to expand the Child Care and Development Block grant, North Carolina policymakers could have the opportunity once again to make transformational investments for our youngest children — and revisit the missed opportunity of the last economic expansion.   

The latest research released from the nonpartisan Economic Policy Institute estimates that once this values-based system is fully implemented, there would be an annual cost for a high-quality and comprehensive ECE system in North Carolina ranging from $9.1 billion to $12.4 billion, or $25,000 to $27,000 per child.  These figures are not far from the investments per child we see in high quality K-12 systems   

 North Carolina would benefit tremendously by making a serious investment in early care and education. The reality that our state leaders can no longer ignore is that we need a stronger public commitment to the early childhood system in order to ensure every child is supported to their full potential.  We must invest early and now in a solid pathway to 3rd-grade reading and the full realization of our state’s constitutional obligation to a sound, basic education for every child. 

NC Budget and Tax Center

New report: Reliance on piecemeal budgeting is harming NC

Image: Adobe Stock

A new report from N.C. Budget & Tax Center analysts Leila Pedersen and Suzy Khachaturyan (“No final budget, no accountability: Piecemeal budgeting neglects community priorities”) offers a scathing assessment of the General Assembly’s failure to pass an adequate and timely state budget.

This is from the introduction:

Budgets are moral documents. So what values are reflected when the state fails to pass a budget? For the first time in recent history, North Carolina has failed to pass a comprehensive budget. Because the General Assembly refused to adequately fund health and education, North Carolina broke the state budget up into dozens of “mini-budgets,” at least 20 of which have been signed into law (see Appendix). This piecemeal approach caused many pressing priorities to slip through the cracks, leaving working families to pick up the pieces.

State budgets set priorities for how to spend our collective tax dollars. Decisions about how to invest public dollars determine who has access to the goods and services people need to live healthy, productive lives. Since 2013, North Carolina’s self-imposed tax cuts for big corporations and wealthy individuals have slashed revenues, causing communities to fight over smaller pieces of a shrinking pie. The General Assembly’s scarcity mindset has resulted in inadequate funding for many communities’ most pressing needs. With a fairer tax code, North Carolina could adequately fund Medicaid and teacher pay — the very issues that resulted in the 2019 budget veto.

Presently, piecemeal spending decisions largely neglect the needs of communities without wealth and access. Annual budgets provide clarity about state priorities. A piecemeal approach to budgeting fails to provide the certainty that agencies need to be effective, the direction local governments need to plan sustainably, and the opportunity to hold lawmakers accountable to the people they were elected to serve.

The report goes on to present damning details of how the 2019 budget failure is harming three vital areas in particular: public schools, health care, childcare assistance. It concludes this way:

North Carolina cannot let the dangerous precedent of piecemeal budgeting become the new normal. For a state budget to reflect the values of all communities, it must be clear, comprehensive, and transparent. We need to hold our lawmakers to account by urging them to put the public interest ahead of partisan power struggles. In 2020, lawmakers should prioritize:

  • Investing in public schools, specifically school construction, teacher pay, and closing the achievement gap in light of the Leandro report.
  • Increasing access to health care by fully funding Medicaid expansion and closing the coverage gap.
  • Expanding child-care assistance to families without accessible, affordable, quality options.
  • Building affordable housing stock by streamlining funding streams and targeting additional resources to communities at risk of displacement.
  • Protecting our environment by ensuring all communities have the resources they need to keep the air and water clean for current and future generations.

Without a comprehensive budget, it is even more important that we hold our lawmakers accountable. The best way to ensure that state legislators put the public interest ahead of private interests is to ground policy solutions in community needs. Public investments in education, child care, health, housing, and the environment are the stepping stones toward a more equitable and prosperous North Carolina.

Click here to read the full report.

Commentary, NC Budget and Tax Center

New report: NC must do much more to combat poverty

Image: Adobe stock

Last year, 1.4 million North Carolinians lived in poverty and struggled to make ends meet, according to data presented in a new report by the Budget & Tax Center.

The report, Fight Poverty, Promote Prosperity for North Carolina, by Alexandra Sirota, Director of the N.C. Budget an Tax Center, summarizes the most recent data from the U.S. Census Bureau and demonstrates the multiple ways in which hardship plays out for people and communities across the state, holding us all back from fully realizing our potential to deliver a high quality of life to everyone.

The report details the ways in which people and communities across the state still face barriers to getting ahead such as lack of access to good-paying jobs, unaffordable childcare, little access to public transportation to get to work, and inadequate education and job training resources. The data on who and which communities experience poverty reflect the legacy of historic policies, practices, and ways in which present day decisions by policymakers reinforce disparate outcomes.

Despite low rates of unemployment, far too many North Carolinians are being left out of the state’s economic recovery.

Among the report findings:

  • North Carolina’s poverty rate is 1 percentage point higher than the U.S. rate (13.1 percent), and it has the 15th highest poverty rate in the nation.
  • 2018 marked the first time in the 10 years of economic recovery that the state’s poverty rate returned to pre-recession levels.
  • Fourteen percent of North Carolinians lived in poverty in 2018, living on less than $25,100 a year for a family of four. Poverty often strikes harder in households with children. In 2018, 19.7 percent, or nearly one in 5 kids in North Carolina, lived in homes that struggled to afford the basics.
  • The state poverty rate (14 percent) declined by 0.7 percentage points over the past year and is at its lowest since 2007, when the Great Recession hit.
  • The state’s median income ($53,855) in 2018 was statistically unchanged from both 2017 and 2007, meaning there has been no progress in raising middle-class living standards for the average North Carolinian since the beginning of the Great Recession.

Click here to explore the full report in PDF format.