MEDIA RELEASE: Low-wage recovery is hurting North Carolina’s workers and economy

The state’s economic growth is marred by an explosion in low-wage jobs in low-wage industries

RALEIGH (June 14, 2014) — North Carolina’s recovery from the Great Recession has been marked by slow job growth and persistent challenges for working families to make ends meet. The minimal job growth has been concentrated in low-wage industries, a new report finds, which will only make North Carolina’s economic recovery that much more difficult.

Low-wage work is defined simply as work pays less than what it takes for a family or an individual to make ends meets, according to a new report from the North Carolina Justice Center. Based on the Budget and Tax Center’s Living Income Standard, a worker with one child has to earn $16.21 an hour to meet this standard. Most of the jobs created since the start of the official recovery in 2009 pay less than the Living Income Standard, and, even more disturbing, the growth in poverty-wage jobs has exploded, the report said.

“When workers earn low wages, they struggle to meet the rising costs for their most basic needs: food on their table, roofs over their heads and clothes for their children,” said Alexandra Sirota, Director of the Budget & Tax Center and co-author of the report. “The broader economy also suffers from a shrinking middle class and increased public spending to help working families stay afloat.”

North Carolina saw an explosion of jobs in low-wage and ultra-low-wage industries between June 2009 and the third quarter of 2013. More than 80 percent were in industries that pay workers less than the $33,709 they need to make ends meet each year. Output increased by 3.3 percent between 2009 and 2012 even as inflation-adjusted wages fell by 5.5 percent, indicating that workers aren’t being rewarded for more efficient work and increased output.

Supporting workers’ ability to collectively bargain for better wages and working conditions is a key tool in building a stronger middle class and creating quality jobs that support families, the report said. This means both removing current policy barriers to unionization as well as supporting employers as they seek to ensure their workplace and supply chains support labor rights. Workers, too, must be able to seek better wages and a stronger pathway to the middle class.

“It is critical that North Carolina support workers earning low-wages with a strong public policy framework that provides pathways to the middle class and supports to make ends meet,” Allan Freyer, Public Policy Analyst and co-author of the report said. “Fundamentally, though, North Carolina should ensure that all workers have the ability to seek better wages and working conditions by joining a union which has been proven to support a strong middle class and better economic outcomes.”

Read the full report at this link.

FOR MORE INFORMATION, CONTACT: Alexandra Forter Sirota, Alexandra@ncjustice.org, 919.861.1468; Jeff Shaw, jeff@ncjustice.org, 503.551.3615 (cell).
 

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