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Report: Lagging recovery highlights importance of quality job creation, investing in workers

Labor2-400 [1]

North Carolina continues to struggle to create jobs and grow the economy in a way that will improve the lives of working families in the state, according to a report released this morning. In order to turn things around, policymakers must focus on how workers fare in the economy and the mechanisms — like investment in education — that will lay the foundation for economic revival and long-term prosperity. Tax cuts are the wrong approach and won’t create the jobs North Carolina needs.

The State of Working North Carolina [2], a report from the North Carolina Justice Center, shows that more than four years after the Great Recession officially ended, the state is persistently plagued by high unemployment, growing underemployment, and declining incomes and wages.

The jobs that are being created pay low wages and are concentrated in urban areas, driving what could be another decade of declining wages for the majority of North Carolinians, the report said. The productivity of workers is not being rewarded with higher pay and many of North Carolina’s workers, particularly those of color and individuals who live in rural communities, are suffering thanks to the state’s stagnant economy.

The State of Working North Carolina is published each year to provide an assessment of the economy with a focus on how workers are faring, pulling together the latest data on jobs, wages, makeup of the labor force, and economic and geographic inequality. The report will give policymakers, the public, and advocates for meaningful change insight into the economic trends that made North Carolina so vulnerable during the last recession and hamper the state’s recovery.

According to this year’s report [3]:

  • North Carolina’s median wage is now lower than it was in 1999 (taking inflation into account). Nearly a quarter of workers earn less than $23,550 – the poverty threshold for a family of four.
  • The state has yet to recover from all of the jobs lost during the recession, and job growth is failing to keep up with population growth.
  • Many of the jobs that have been created are in lower-paying services such as food processing, retail, and hospitality, and now account for 83 percent of employment in the state.
  • Income inequality between the top wage earners and those at the bottom has skyrocketed. African Americans have been hit particularly hard, earning nearly $5 less per hour on average than their white counterparts.
  • Rural areas of the state continue to lose jobs, while large and small metropolitan areas are slowly adding jobs.

“As North Carolinians continue to wait for a recovery that creates good jobs and delivers broad economic benefits, it’s clear that the state is on the wrong path,” said Alexandra Forter Sirota, director of the Budget & Tax Center. “Our priority should be rebuilding with a focus on increasing the wages of North Carolina’s workers.”

North Carolina’s struggles have been a long time in the making, the report said. An economic transformation that began as early as the 1970s can’t be undone in a few short years, especially after a historic national recession.

“It is critical that policymakers invest in education and skills training for the jobs of the future and to ensure that a more productive economy benefits workers,” Forter Sirota said. “This will mean abandoning the false promise that tax cuts will improve our economy. In reality, they only drain resources from our schools, colleges, and the other building blocks of a strong economy.”

To read the full report, click here [4].