A new study released today reports that an equity-driven economic growth model will expedite North Carolina’s recovery from the Great Recession, which has consistently remained uneven and sluggish across the state, creating recessionary-like conditions in many cities and towns.
“The State of Working North Carolina,” a report published annually by the North Carolina Justice Center, provides policymakers, advocates and the public an assessment of the state’s economy with an emphasis on workers’ socioeconomic standing, collecting and analyzing the latest data on “jobs, wages, makeup of the labor force, and economic and geographic inequality.”
According to the September 2014 report, “many communities and many groups of workers in North Carolina continue to experience a recession-like shortage of jobs, as well as the pernicious effects of a boom in low-wage work. Taken together, the uneven recovery and growth in jobs that pay less than what it takes for families to make ends meet are splitting North Carolinians into two state economically, depending on where workers live and their background.”
Because of this divide, the report said, it has become harder for North Carolina to fully recover.
Through their research, authors Alexandra Sirota, Tazra Mitchell and Allan Freyer have found that while there has been a spike in job creation since the formal end of the recession in 2009, more than 80 percent of the jobs created were in industries that pay workers less than $33,709 per year, which the report said is the income required to meet basic needs for one worker and one child.
The report said almost six out of every 10 new jobs created offer wages so low that they perpetuate the worker’s cycle of poverty, despite their full-time employment. Because of this growth in low-wage work, it is “disproportionately impacting workers of color and women.” The State of Working North Carolina 2014 said that wage gaps are persisting in the workforce due to racial and gender discrimination, with 13.2 percent of women, 23 percent of Latinos and 13.5 percent of African Americans earning below the living income standard, compared to 9.7 percent of men and 9 percent of white workers.
In order for North Carolina’s economy to resume a more inclusive and prosperous future, the report said policymakers “must address diversity as an economic opportunity and pursue policies that build an economy that works for all.”
“We know that our economy grows best when the gains are broadly shared across communities of different socioeconomic backgrounds,” said Mitchell, a policy analyst with the North Carolina Justice Center’s Budget and Tax Center and co-author of the report. “That is why the Old North State needs to rework its growth model in an intentional and targeted way to spur and sustain widespread economic prosperity in all communities and for all demographic groups.”
Freyer, Sirota and Mitchell believe this can be achieved by:
• “Implementing strong wage standards — such as increasing the minimum wage and establishing a living wage standard — to boost wages, fight poverty, and reduce the racial and gender income divide.
• “Providing adequate work supports and benefits, such as expanding access to paid leave and health insurance and reinstating the state Earned Income Tax Credit.
• “Targeting job creation and workforce development in communities of color and distressed communities to equip the workforce with skills necessary to excel in 21st-century jobs.
• “Boosting public investments, including education, workforce development and place-based investments in struggling communities, to support current and future generations.”
“An equity-driven growth model is the only way forward to fixing North Carolina’s broken economic model and building a more robust economy,” said Sirota, director of the Budget and Tax Center and co-author of the report. “Policies that reverse decades of inequality and create pathways to opportunity should be prioritized so that all workers can contribute to growth and have a shot at realizing the American Dream.”
For more information about the “State of Working North Carolina 2014” report and the North Carolina Justice Center, visit www.ncjustice.org.