FACTSHEET: Stronger Earned Income Tax Credit and Minimum Wage - Both Needed to Help Low-Wage Working Families

By Alexandra Forter Sirota
Director, Budget & Tax Center
September 2014

Since the state began recovering from the recession in 2009, North Carolina has primarily added low-wage jobs that make it hard for people to afford even the most basic necessities.  More than 80 percent of jobs created pay below what it takes one worker with one child to make ends meet. 60 percent of new jobs pay less than the federal poverty line, which means workers make less than $23,550 per year.  

The lack of good paying, quality jobs is made worse by North Carolina’s tax code. After tax changes passed in 2013, middle- and low- income taxpayers are asked to pay even more in taxes than the state’s richest taxpayers as a share of their annual income.  With the cost for basic goods and services rising, the increased need to save for children’s education, and the imperative to plan for retirement, working families are struggling to climb the ladder into the middle class, despite working full-time.

There are two critical policy tools that can help put low-wage workers on the path to economic security: the minimum wage and the Earned Income Tax Credit (EITC). Together these policies ensure that working families can maximize their take-home pay to help make ends meet.
 

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