The Institute for Emerging Issues at N.C. State wrapped up its annual public policy forum last week. The forum brings together leaders from across the state each year to discuss issues of importance to the well-being of the state. This year the topic was “the future of work” — the ways in which automation and technology are changing how we work and the relationship between workers, employers, consumers and communities.
Despite the projections and well-intentioned guesses about what the future will bring, no one knows for sure what the outcome will be. What we do know, however, is that what we do today can support better economic outcomes for more families, businesses and communities in the state. Research is clear that wage growth and public policy will both be keys to ensuring that the future of work has the number and quality of jobs that can boost the economy for everyone.
If this sounds familiar, it should. North Carolina’s wage problem is front and center in the daily lives of workers and the communities where they live today. Without wages that ensure workers can provide for the basics and spend locally, employers fail to see the demand for goods and services that allow them to expand and communities are challenged to support the opportunities that build the long-term potential for children’s economic success as adults. North Carolina’s uneven recovery and elevated hardship today are indicators of what happens when policy doesn’t focus on wages or the ways in which all communities can connect to economic opportunity.
Happily, we have it within our power to ensure that workers have what one speaker described as the “capital” to meet their needs and make investments that support advancement of themselves, their families and build assets in their community. We know that workers with the ability to make ends meet and spend are what the economy needs to function well and expand.
That is why a focus on boosting wages and helping communities rather than on reducing the size of government is what is needed. To grow wages, North Carolina must, at a minimum:
- Ensure that there are enough jobs for those who seek employment. Without a better match between the number of workers seeking employment and job openings, employers won’t raise wages. It is therefore critical that policymakers focus on proven job creation strategies. As experts at the Center on Budget & Policy Priorities highlighted in a recent report, this means focusing on home-grown businesses and entrepreneurs and helping them to start up and expand rather than pursuing broad-based tax cuts or seeking to attracts firms from outside the state. Such a focus has the added bonus of being better able to target job creation in communities—largely rural—that continue to struggle to create jobs and support many of the public goods that businesses and residents enjoy.
- Raise the minimum wage to boost the economy. Without workers who earn enough to afford the basics and spend locally, there isn’t demand for businesses’ goods and services and the sustained opportunity for expansion. The minimum wage standard in North Carolina today of $7.25 falls far short of what is needed to meet even the most basic family budget. It also has eroded over time meaning that a minimum wage worker is able to purchase far less with an hour’s work than just five or ten years ago. Raising the minimum wage standard at the state level can directly boost the economy.
- Reconnect productivity to wages. If the market continues to produce the outcome that workers are more productive but wages fail to keep up (as has been the case for some time), policymakers must consider not just how they can encourage employers to deliver wage increases to workers but how they can remove barriers to collective bargaining that have eroded the potential for workers to negotiate wages that boosts the economy.
- Support high-growth industries by building a skilled workforce and supporting emerging technology. This was the area where most of the discussion at the IEI Forum was pitched and it is an important one. But it is one that will always be insufficient if the policy choices listed above in numbers one through three aren’t also in place. Public investments in education from birth through career are the foundation of opportunity and these investments must be adequate and equitable across the state. What’s more, the career pathways, “bridge” programs and prior learning assessments that recognize learning as a lifelong enterprise will require a far greater public commitment to our community colleges so that they can implement training in advanced technologies and keep that skills training affordable to all.
The bottom line: Broad-based tax cuts and the pursuit of low regulation won’t address our economic realities today and won’t position North Carolina to contend with the disruption of technological advancement. They are policy approaches rooted not in today’s economic realities or the anticipated future of work but in flawed theories. A focus on wages and the systems that we build collectively to ensure every community has opportunity are the best ways to ensure the economy works for all of us – both today and in the future.
Alexandra Forter Sirota is Director of the N.C. Budget & Tax Center.