Still not prosperous

Published April 29, 2015

Editorial by Greensboro News-Record, April 29, 2015.

A report published last week adds grim context to good news about North Carolina’s 5.4 percent unemployment rate.

While more people are working now than before the massive layoffs of the Great Recession, earnings are still depressed.

That’s a key finding of “A Comeback Short of the Mark,” written for Think NC First, a liberal policy center in Raleigh. The author was John Quinterno of South by North Strategies on Chapel Hill. It drew a partisan rebuke from the N.C. Republican Party, which noted that the time frame it covers, 2007 to 2013, was “the period when Bev Perdue was largely in office.”

The Democratic former governor indeed had the misfortune to take office just after the recession began and to leave before the unemployment rate — nationally and in North Carolina — fell significantly. However, she was politically neutralized halfway through her term by a Republican legislature that assumed power in January 2011. So a good question is whether policies enacted since then — largely in the form of tax cuts for corporations and individuals with the highest incomes — are helping to make ordinary North Carolinians more prosperous. There’s not much evidence yet to show they are.

Median household income, adjusted for inflation, fell by 8.5 percent in North Carolina from 2007 to 2013. The low point was in 2011, at $45,471; it inched up to $45,906 by 2013. The distribution of household income has widened, with top earners gaining and the poor losing. Workers with just a high school education or less lost the most ground and aren’t recovering. Also, while more people are working, employment hasn’t matched population growth, so more people are unemployed.

The statistics in this report are politically neutral, but Quinterno analyzed them from a progressive point of view. He believes the working poor would be helped by raising the minimum wage, expanding Medicaid coverage, restoring the Earned Income Tax Credit, granting paid sick leave to all workers and enforcing existing labor laws — not letting construction companies classify employees as independent contractors to avoid paying benefits, for example.

Republicans prefer tax cuts to create a more inviting business environment. Maybe that will help eventually, but until there’s real competition for labor, incomes aren’t likely to rise much.

Economic developers are focused on potential “game-changers,” such as an auto manufacturer. One super employer hiring thousands of workers at good wages would make a big difference, not only with its own payroll but by attracting suppliers and other businesses.

Many workers need to upgrade their skills to win high-tech or advanced manufacturing jobs. This requires strengthening the university and community college systems, which have absorbed budget cuts since the recession began. Improving the transportation infrastructure also is necessary to move the state forward.

North Carolina remains in a deep hole. Many residents are worse off than they were years ago. Leaders haven’t found the right policies to dig out.

http://www.news-record.com/opinion/n_and_r_editorials/still-not-prosperous/article_c4d971fa-ede4-11e4-8f80-9b7632667759.html

April 29, 2015 at 12:03 pm
Richard L Bunce says:

"...by a Republican legislature that assumed power in January 2011."

No, elected to be the NC Legislature House majority in November 2010 in Democratic Majority gerrymandered House districts.

The minimum wage is a regressive tax that no progressive should embrace. The minimum wage tax burden falls primarily on the least profitable businesses that tend to hire the most low wage employees while profitable businesses that tend to hire higher wage employees avoid that tax. The tax hurts the business bottom line by both increasing employee wages but also payroll taxes, unemployment taxes, workers compensation taxes, and others as well.