JUST RELEASED: Seven Years After the Great Recession, North Carolina Needs Growth With Prosperity
The worst of the Great Recession is behind us, but the damage lingers, weighing down communities and families across North Carolina. We are now seven years removed from the financial crisis of 2008, but in North Carolina wages are down, job creation is lagging, and many communities are still stuck in recession.
Given all of the positive headlines lately, it’s easy to get the impression that the recovery is in full swing. Last year was the best since the financial crisis, with North Carolina and the nation finally getting back to the number of jobs that existed before the recession. The unemployment rate has also been dropping since the bottom of the Great Recession in 2009. However, these positive trends do not tell the whole story, particularly in North Carolina.
There are still not enough jobs for everyone who wants to work in North Carolina, but that’s far from the only problem. Simply put, North Carolina’s economy is not working for everyone. Read BTC's full report at this link.
IN FOCUS: A Minimum Wage and State EITC
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.
The federal minimum wage, currently at $7.25 per hour, has not kept up with inflation and would leave a family with a parent working full time year round, in poverty. While some states have increased their minimum wage requirements above this, North Carolina’s minimum wage remains at $7.25. If the minimum wage had kept up with inflation since 1968, it would be more than $10.50 per hour.
Earned Income Tax Credit
The federal Earned Income Tax Credit (EITC) goes only to working people with modest income. It puts some extra money in their pockets to pay for necessities and help offset the federal payroll taxes like those for Social Security and Medicare. Many states have their own version of the credit to reduce the substantial state and local taxes low-income workers pay, particularly the sales tax which hits lowest income households hardest., North Carolina lawmakers chose to let the state EITC expire at the end of 2013, which shifted taxes from others onto low-income families.
For more on how these policies work together, check out our fact sheet.
ALL-IN ECONOMY: Share your story
We all want to see North Carolina create jobs and experience prosperity that is broadly shared by all of our state’s residents—from the mountains to the coast, from our small towns to our major urban centers. But the goal of prosperity that is broadly shared across the state seems farther away than ever . Despite experiencing modest economic growth in the years since the Great Recession, the benefits of that growth just don’t seem to be reaching many of our communities.
To share a story from your community click here.
ABOUT OUR STATE ECONOMY WORK
North Carolina’s economy is not only struggling to rebuild after the Great Recession but also experiencing the effects of a longer-term economic transformation in the industries and jobs that are growing. These broader economic trends and the fiscal decisions made at the state level impact family’s economic hardship and the opportunities available in communities across the state.
Public policy can have a significant impact on North Carolina’s economy. State investments in economic development, workforce development, and job creation can open doors to opportunities for the state’s most struggling communities. However, poorly developed policies can undermine economic growth, exacerbate long-term unemployment, and rob certain groups and geographic areas of economic security.
Poverty, Inequality and the State of Opportunity – 1 in 5 North Carolinians live in poverty and many more struggle to make ends meet. Over time as the economy has grown and transformed so too has inequality and the effects on opportunity for all North Carolinians has been significant in terms of economic mobility and the vibrancy of our middle class. The Budget and Tax Center publishes regular analysis of poverty, inequality and the state of opportunity as well as analyzes proposals that would support North Carolinians struggling today and build greater opportunity for the future.
Economic and Workforce Development – North Carolina’s approach to economic development primarily involves giving millions of dollars in subsidies to already-profitable businesses, and often any new jobs these subsidies create do not benefit economically disadvantaged counties or populations. The Budget and Tax Center publishes analyses of current economic development programs and develops alternative proposals that could create widespread opportunity across the state. This requires as well a strong workforce development system that provides for career pathways in growing industries that pay living wages and it will be increasingly important for North Carolina’s community college system and university to remain affordable and innovative at supporting students young and old into the workforce.
Communities of Opportunity -- Communities across the state are dealing with the significant challenges of population growth, demographic and industry shifts and fewer public dollars to build an infrastructure of opportunity for all. The Budget and Tax Center works to analyze and develop proposals to support equitable development across the state with a particular focus on how transportation, housing and job opportunities are interconnected.
The Labor Market and Economic Growth – The functioning of North Carolina’s labor market is critical to the sound functioning of the state’s economy. The Budget and Tax Center monitors the labor market and other indicators of how the broader economy is faring with an eye to understanding the impact on individual North Carolinians. In addition, the Budget and Tax Center publishes reports on North Carolina’s unemployment insurance system and creates proposals on how North Carolina can better support unemployed workers and increase access to quality jobs.