MEDIA RELEASE: North Carolina’s uneven recovery, boom in low-wage jobs highlight need for building an economy that works for all

The annual State of Working North Carolina report assesses how the economy and workers are faring

RALEIGH (August 29, 2014) – More than five years after the Great Recession officially ended, North Carolina’s economic recovery has continued to be slow and uneven across the state, resulting in recessionary-like conditions in many communities, according to a new report.

The State of Working North Carolina, an annual publication from the North Carolina Justice Center, shows that North Carolina workers and their families are struggling to make ends meet in a labor market with too few jobs and employment that pays too little for families to meet most basic needs. These challenges are resulting in some workers falling behind based on where they live and their respective backgrounds.

The state’s workforce demographics are also changing, the report finds, pointing to the importance of addressing today’s challenges for the state’s future labor force and economic growth. Currently one-third of the state’s youth are people of color, and that share is expected to reach nearly half by 2040. As the state’s population ages rapidly and the Baby Boomer generation enters retirement, there will be a gap in the workplace to be filled by younger, more diverse workers.

According to this year’s report:

  • Almost six out of every 10 new jobs created since the end of the recession are in industries that pay poverty-level wages, keeping workers trapped in poverty even when they are working full-time.
  • The growth in low-wage work is disproportionately impacting workers of color and women: 13.2 percent of women, 13.5 percent of African-Americans, and 23 percent of Latinos earn below the living income standard, compared to 9.7 percent of men and 9 percent of whites.
  • The persistence of higher unemployment rates for African-Americans is in part being driven by the greater labor force resiliency of African-American workers. Since the recession, African-Americans have not dropped out of the labor force at the same level as white workers.
  • There are approximately 260,000 North Carolina working families who live in poverty, with 12.8 percent of working families earning poverty wages.
  • 13 of 14 metro areas saw labor forces decline since June 2013. For eight metros, the decline in unemployment was driven by the unemployed moving out of the labor force rather into jobs.
  • Rural employment dropped 2.7 percent since the start of the recovery while the state’s large metropolitan areas have seen 6.5 percent job growth.

“We know that our economy grows best when the gains are broadly shared across communities of different socioeconomic backgrounds,” said Tazra Mitchell, a policy analyst with the NC Justice Center’s Budget & 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.”

In order to put North Carolina’s economy on a more inclusive and prosperous path, the report said, policymakers must address diversity as an economic opportunity and pursue policies that build an economy that works for all:

  • Implement 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.
  • Provide adequate work supports and benefits, such as expanding access to paid leave and health insurance and reinstating the state Earned Income Tax Credit.
  • Target 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.
  • Boost 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 Alexandra Sirota, director of the Budget & 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 CONTACT: Tazra Mitchell, Tazra@ncjustice.org, 919.861.1451; Jeff Shaw, jeff@ncjustice.org, 503.551.3615 (cell).

The State of Working North Carolina is published each year to provide an assessment of the economy with a focus on how workers are faring, pulling together the latest data on jobs, wages, makeup of the labor force, and economic and geographic inequality. The report will give policymakers, the public, and advocates for change insight into the economic trends that hamper the North Carolina’s recovery.
 

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