My home state was once a model for progress. For half a century, North Carolina was a beacon of moderation in the South, an outlier dubbed the “Dixie Dynamo” as early as the 1960’s for its farsighted reforms and public investments. The state had its share of problems, especially around the pernicious legacy of Jim Crow, but many of its trend lines were positive and generated an infectious optimism.
I remember that optimism. Even in Appalachia, my father could start a successful small business, and the public schools offered a quality education. In high school, I was given the opportunity to attend the North Carolina School of Science and Math, founded as the first public school of its kind in the early 1980’s and used as a model for 18 other schools nationally. Opportunities were expanding, barriers to mobility were dropping, and the state’s future looked bright.
Today, North Carolina is different. The numbers speak for themselves: the share of workers living in poverty is up from one-in-four in 2000 to every one-in-three today, according to the NC Justice Center – the second highest share of any state. Middle-wage jobs have hollowed out and median income has plunged since 2007. Poverty has grown faster than nearly every other state, surging from around 12% to 16% since the early 2000’s, including one in every four children and African Americans. A recent study found that Charlotte is dead last in economic mobility among America’s 50 largest cities, a problem facing many other cities across the state.
To be sure, parts of North Carolina have thrived, and the state continues to attract talented workers and high-paying employers. Much of this is thanks to the state’s decades of forward-looking investment, especially in the Research Triangle, mitigating what could have been a harsher downturn in the Great Recession.
Yet growth at the top and a hollowing of the middle has also sharply increased the state’s economic inequality. Over the last three decades, the top 1% of earners in North Carolina saw their incomes grow by nearly 100%, while the bottom 99% rose by just 9%. These top earners captured nearly all the state’s income growth between 2009 and 2013, according to the Economic Policy Institute, and their overall share of state income has reached the highest levels since the Great Depression.
In the face of such troubling developments, you might expect the state’s elected representatives to pull out all the stops in order to help its citizens in need and invest in more ladders of opportunity. But the reality in recent years is the opposite. The legislature has not only neglected these problems – it has actively made them worse, in large part due to the state’s political transformation since 2010.
In that year, Republicans gained control of the legislature for the first time since Reconstruction with the help of unprecedented dark money, enabled by the Supreme Court’s Citizens United ruling. Taking advantage of the crucial, once-a-decade Census year to redraw legislative districts, the new majority then used repressive gerrymandering and voting restrictions to secure a legislative supermajority in 2012, along with the governor’s mansion, tactics since ruled unconstitutional. Abandoning decades of state legacy, the supermajority then advanced an extreme, uncompromising policy agenda – and the consequences have been severe.
A new governing model
The damage the new supermajority has inflicted since 2012 is wide-ranging, from civil rights to environmental protection, with the most infamous example being the LGBT discrimination law known as HB2. Yet there is perhaps no area in which the legislature’s agenda has been as comprehensively destructive as in its targeting of the economically disadvantaged.
The story begins with healthcare. Under the Affordable Care Act, Medicaid was expanded to cover more low-income families, with the federal government required to cover 100% of the cost of coverage expansion for three years and a full 90% thereafter. Instead of accepting these federal dollars, however, in 2013 the legislature passed a bill to block Medicaid expansion. The impacts are staggering: nearly 500,000 people are now unable to gain health insurance under Medicaid, with an opportunity cost of $50 billion in federal funding and 26,000 jobs over ten years, according to the Urban Institute.
The next target was tax policy. Since 2013, the legislature has enacted a series of tax measures that together represent the state’s most sweeping tax overhaul in a generation. The wealthiest 20% of earners have received around 80% of net tax cuts, while more than half has gone to the top 1% – putting an average of nearly $22,000 in the pocket of every $1 million earner. Taxes on profitable corporations were reduced, in significant part benefiting out-of-state shareholders of large corporations, and the estate tax was repealed entirely.
In contrast, the plan provides few, if any, benefits to the bottom 80% when accounting for all regressive measures, including an expansion of sales taxes, which disproportionately hits lower earners, and the elimination of the earned income tax credit (EITC). North Carolina established its EITC in 2007 to support working families, building on the well-regarded federal EITC. Based in part on a proposal by Milton Friedman, among the most prominent conservative economists of the 20th century, the EITC was championed by President Reagan and retains broad bipartisan support. No matter: the legislature eliminated it, cutting off close to one million families and making North Carolina the only state to repeal its own EITC.
In total, the cumulative cost of major tax changes since 2013 will be at least $3.5 billion annually – neglecting critical areas of public investment. In public education, for example, the legislature has allowed pre-K programs, K-12 schools, and universities to languish. Average teacher salary fell in state rankings from 25th in 2009 to 47th in 2014, pushing talented teachers away to other states, and the state now ranks 43rd in K-12 per pupil spending, beating only Mississippi in the southeast. Higher education funding remained 20% below 2008 levels in 2015 when adjusted for inflation, driving up tuition by 40% – putting college further out of reach and saddling students with more debt.
The next target was wages. While 29 states and 40 localities around the country have moved ahead to raise minimum wages, the North Carolina legislature blocked repeated attempts to increase its rock-bottom $7.25 minimum. To ensure wages can’t be elevated anywhere in the state, it also passed a law forbidding municipalities from raising their own minimum wages or requiring contractors to pay a living wage, even to account for variations in living costs.
Next was unemployment insurance. In 2013, the legislature forced permanent cuts to the program, making it more difficult for those who lose a job to afford basic necessities while searching for work. Prior to these changes in 2013, North Carolina’s unemployment insurance wasn’t particularly generous, with its benefits hovering around the average for all states. Today, the state is at the bottom of the pack. North Carolina’s average compensation rate now ranks 46th in the nation, and at a 12.4% coverage rate, its program reaches the lowest share of jobless workers of any state in the country except Florida. Kansas and Oklahoma, not exactly known for liberal policies, cover more than twice that share.
The targets didn’t end there: food assistance, economic development organizations, and legal aid for the disadvantaged were also put on the chopping block. Other regressive proposals were surfaced and then shelved following public outcries, and we can only guess what proposals were considered in private but never unveiled. As the reactionary Grover Norquist’s Americans for Tax Reform recently put it, “forget Kansas – North Carolina is the national model” for conservative reform.
“A Corruption of Our Moral Sentiments”
Blocking the expansion of Medicaid. Shifting the tax load from the wealthiest to the middle and working class. Short-changing public schools. Preventing a minimum wage increase. Cutting unemployment compensation, food assistance, legal services, and economic development. Any one of these steps alone would be alarming. Taken together, they can be interpreted as nothing less than a full-fledged campaign against the economically disadvantaged.
It is straightforward enough to quantify these measures in rankings and statistics. What’s more difficult is to contemplate the consequences in real, human terms: the single mother who gets laid off and goes hungry to feed her children while searching for work. The high school student who abandons her dreams of college to avoid crushing debt. The sick father blocked from Medicaid who can’t afford the treatments he needs to live. The proud machinist who loses his middle-income manufacturing job and ends up in fast food. The immigrant worker with three minimum-wage, part-time jobs who still lives in poverty.
Stories like these define hundreds of thousands of lives in our communities. Most of their struggles take place beneath the surface, out of sight and out of mind, and most of those impacted are women and people of color, under-served for generations.
As difficult as it is to comprehend these stories, it is similarly hard to fathom what could motivate lawmakers to inflict unnecessary hardship on struggling people, even while assisting the most fortunate. On the surface, it appears to be an extension of trickledown economic theory, justified by a faith that tax cuts on the rich and lower government spending lifts all boats – a misinformed and discredited ideology, but one that is continually perpetuated by moneyed interests and ideologues.
Still, even a misinformed economic ideology can’t explain the senseless, callous nature of some of the legislature’s record. Nor does racial discrimination provide a complete explanation, given the broad-based impact of this policy agenda on the economically disadvantaged. There is something deeper at work, perhaps best captured by Adam Smith himself in The Theory of Moral Sentiments in 1759. “This disposition to admire, and almost to worship, the rich and the powerful,” Smith observed, “and to despise, or, at least, to neglect persons of poor and mean condition… is… the great and most universal cause of the corruption of our moral sentiments.”
A progressive renewal
What Adam Smith described in the 18th century isn’t new. This disposition – to revere the rich and neglect the disadvantaged – is as old as history itself, what every movement for economic justice has confronted in the long struggle for a more decent society.
Despite the egalitarian aspirations of America’s founding, this disposition has always been with us, rearing its head in different forms – from Southern adoration of plantation owners, to Northern reverence for Gilded Age industrialists, to the bipartisan fascination with Wall Street in the 1990s. Its strength has grown in the United States over the past generation, particularly on the political right, expressing itself in the form of trickledown economic ideology and extreme reactionary movements seeking to dismantle the social safety net.
It’s a disposition that North Carolina’s own Rev. William Barber II believes demands a countervailing “national moral revival.” Barber, described by some as “the closest person we have to Martin Luther King Jr. in our midst,” led the NC NAACP for years and founded the well-known Moral Mondays protest movement in 2013 to oppose the legislature’s agenda. Moral Mondays mobilized an interracial coalition in one of the largest statehouse-focused civil disobedience campaigns ever, forestalling even more extreme legislation and likely helping elect Governor Roy Cooper and flip the state Supreme Court in 2016.
Today, Barber and his supporters are working to take that model nationwide with a revival of the Poor People’s Campaign, an economic justice initiative MLK Jr. launched in 1967 before it was cut short by his assassination. At the heart of Rev. Barber’s vision is the belief that the path to progressive renewal is through a diverse and morally rooted coalition based on the common interests of all less advantaged people, across races, ethnicities, genders, and religious lines. He calls this a “moral fusion politics,” harking back to North Carolina’s 1890’s “fusion” alliance between Black and white progressives, and his supporters believe it has transformative potential.
One senses the stirrings in this grassroots progressive movement. Especially since the election of Donald Trump, the state has witnessed an explosive and spontaneous growth in “resistance” groups dedicated to pushing back against the national rightward swing and to reclaiming the state’s proud tradition as a force for Southern progress.
The past several years have marked a difficult chapter in North Carolina’s history. The ongoing plight of the disadvantaged, together with the uncompromising extremism of the legislature, have sometimes helped to create a sense of hopelessness and despair and paint a grim picture of what could happen in other states and at the national level in the era of Trump).
But as with other challenging times in the state’s history – from the 19th Century fusion era to Greensboro sit-ins and the broader civil rights movement they helped catalyze – the North Carolina of 2017 offers a path to progressive renewal, in the South and beyond.
Tyler Norris served as a presidential appointee in the Obama administration from 2012-2015. A Truman Scholar and Forbes 30 Under 30, he grew up in Western North Carolina and graduated from NCSSM and Stanford University. Follow him @TylerHNorris.