"We continue to be reminded just how deep of a hole our economy has been in over the last several years” said Patrick McHugh, policy analyst with the Budget & Tax Center, a project of the NC Justice Center. “We suspected that last year’s low official unemployment rate was not really reflecting the depth of economic need, and the past six months have shown that there are still a lot of North Carolinians who cannot find a job.”
The January labor market data underscore a number of important economic realities, including:
- Support is needed for North Carolinians looking for work: There were approximately 260,000 North Carolinians looking for work in January, which is up approximately 30,000 since July of last year. Some of this increase is actually a good sign as some people who were pushed out of the labor market during the Great Recession are starting to find their way back in. Nevertheless, it is clear that we are not creating jobs nearly fast enough to provide one for everyone who is willing and able to work. Total employment in North Carolina increased by 1.5 percent since July of 2016, but the number of people actively trying to find work increased by more than 15 percent. With not enough jobs to meet the demand for work, the state needs an unemployment insurance system that is up to the task, so that people who lose a job through no fault of their own don’t lose everything as they search for a new job or train for a new career.
- North Carolina still needs a raise: A tightening labor market has finally produced several months of decent wage gains across the country, but an hour’s work for the average North Carolina worker still pays around $2 less than the national average. North Carolina has witnessed a boom in low-wage work over the past several years, leaving many workers on the brink on financial ruin. Raising the state minimum wage to $12 an hour would help 1.3 million North Carolinians to support their families, and it would boost overall economic growth by growing consumer demand by billions of dollars a year. Reinstating the state Earned Income Tax Credit can also reduce working poverty and increase consumer demand.
- Help people reconnect with the labor market: Job growth in North Carolina has not kept pace with the state’s growing population over the past several years. Approximately 59 percent of North Carolinians had a job in January, still well below what the state experienced in the 1990s and 2000s. There are likely nearly 200,000 people in North Carolina that are not officially counted as unemployed but who would have been part of the labor force in earlier periods of economic growth. This fact reflects a lack of concerted investment to ensure that people who lost their jobs during the recession can access the training needed to land new positions and, in many instances, entirely new careers.
For more context on the economic choices facing North Carolina, check out the Budget & Tax Center’s Prosperity Watch site every Monday.
FOR MORE INFORMATION, CONTACT: Patrick McHugh, BTC Policy Analyst, firstname.lastname@example.org, 919-856-2183; Mel Umbarger, BTC Senior Communications Specialist, email@example.com.