50-50 odds: Half NC families struggling, report says
Half of North Carolina families with children don’t earn sufficient income to pay for basic expenses, according to a new report by the Raleigh-based NC Justice Center.
‘“Failing Jobs, Falling Wages: The 2005 North Carolina Living Income Standard,’” authored by John Quinterno and Elizabeth Jordan and released on Dec. 8, found that a majority of North Carolina children, blacks, Hispanics and women ‘—’ practically every demographic except white males ‘— live in households where income falls short of the cost of living.
The study by the left-leaning Justice Center downplays the recent national recession as a cause of household distress, instead pointing to a federal minimum wage that has been stalled since 1997, the shift of jobs from manufacturing to service and what the Justice Center characterizes as a tax code written to the advantage of the state’s most affluent residents.
‘“What we’re finding is that families are carrying a heavier burden because childcare and housing costs are increasing,’” Legislative Director Sorien Schmidt said. ‘“Median incomes are falling and more families are in poverty.’”
The report states that rural areas have lagged behind economically as explosive growth in Charlotte and the Triangle has created good jobs for the well educated while escalating costs for low-income workers employed in the service sector. The Triad falls somewhere in between, Schmidt said.
‘“The Triad is where you’ve lost manufacturing jobs,’” she said. ‘“They’ve been replaced by service and retail. That means that people can be working the same or more hours for less money and paying about the same for the cost of living.’”
The study found that of the state’s five fastest growing occupation, only registered nurses get paid an average salary of more than $8 per hour and require more than short-term, on-the-job training. The other four growth jobs ‘— retail salesperson, cashier, food preparation and service worker, waiter ‘— pay between $6.49 and $7.50.
‘“The data just reiterates how expensive it is to live in urban areas,’” Schmidt said. ‘“With so many people having to move to the urban areas it means they’re going to have additional expenses. They’re going to have to pay more to live there or pay more for transportation.’”
The authors calculated housing, food, child-care and other costs for families with children to devise a so-called living income standard. The report pegs the living income standard for the state as a whole at $12.32 an hour, more than twice the current minimum wage of $5.15 an hour. The living income standard for those in metropolitan areas would be $13.27 per hour.
A 2003 report by the Justice Center found that 60 percent of North Carolina families with children did not receive enough income to meet a living income standard. Schmidt said comparisons between the 2003 and 2005 statistics are not useful because the report’s authors have changed the formula for calculating the living income standard. The statistics in the recent report were drawn from 2003 Census data.
Research and advocacy work by the Justice Center has often come in for criticism by pro-business groups in North Carolina. Roy Cordato, vice president for research for the conservative John Locke Foundation in Raleigh, said he had not read the recent report but noted that the economic recession ended in North Carolina after 2003. Cordato questioned the Justice Center’s methodology for devising the living income standard. He expressed the opinion that solutions advocated by the center such as raising the minimum wage would actually create poverty rather than alleviate it.
‘“What they argue for is redistributive policies,’” he said. ‘“Mainly what they tend to propose is programs that maintain poverty. They offer nothing to bring people out of poverty, nothing to encourage entrepreneurs to create more jobs. They argue for a very high minimum wage. Anyone who’s not worth twelve or thirteen dollars an hour, those workers are not going to be able to find a job.’”
Raising the state minimum wage is among dozens of policy recommendations outlined by the Justice Center this year. Others include requiring businesses that receive state incentives to pay a living wage, reforming payday lending, bumping up pay for state employees by $2,000 a year, covering healthcare for all North Carolinians, improving standards and enforcement for migrant housing, shifting the tax burden to wealthier residents and increasing funding for public education.
Schmidt pointed to legislation passed by the NC House in August that would raise the state minimum wage to $6 an hour and reimburse small businesses for providing health insurance as a step in the right direction. The bill incorporated failed legislation sponsored by Rep. Alma Adams, a Greensboro Democrat, to raise the minimum wage. The Health Insurance/Minimum Wage Act is currently languishing in the Senate Finance Committee.
Sen. Phil Berger, a Republican from Eden who represents part of Guilford County and who is a member of the committee, said he would have to review the measure dealing with health insurance before taking a position but said he does not support raising the minimum wage, even by 85 cents.
Another member of the Guilford County delegation, Sen. Stan Bingham (R-Denton), said he accepts the Justice Center’s findings and believes using corporate incentives to lure high-paying industries such as pharmaceuticals is the best way to address the pain of families struggling to make it. He also touted alternative energy and wine as areas of potential economic growth.
‘“We’ve truly got a jump on biotech and genetic engineering,’” he said. ‘“If someone in Chapel Hill comes up with a cure for cancer through some kind of tablet we’ll have an economic boom. The vineyards and the winery business, that was unheard of a couple years ago. I’ve got a little Volkswagen diesel and I’m going to start picking up fuel at a restaurant in Denton and processing it at home so I can commute to Raleigh. The opportunity for such as that ‘—’ to say the heck with OPEC ‘— there’s so much research.’”
Sen. Kay Hagan, a Greensboro Democrat, declined to comment because she hadn’t read the report. Sen. Katie Dorsett, who is also a Greensboro Democrat, did not respond to requests for comment.
Rep. Earl Jones, a Greensboro Democrat, voted for the minimum wage raise. He said also supports reforming payday-lending laws to protect low-income financial services consumers. Jones’ position on payday lending in the past has drawn criticism from some.
‘“My position on payday lending is to regulate it in a manner where it’s not exploitive of workers,’” he said. ‘“Some people want to eliminate payday lending. Some of us who want to regulate it are labeled as being in favor of payday lending. I never supported payday lending, but it is a necessary service.’”
Jones said he plans to meet with Martin Eakes, founder and CEO of the Durham-based Center for Self Help, to get guidance on crafting legislation to regulate payday-lending operations.
The Greensboro legislator said the Justice Center’s agenda for addressing the needs of families struggling to get by doesn’t go far enough. What needs to change, he said, is the right-to-work law that has won North Carolina the reputation as one of the most anti-union states in the country. Like most Southern states, North Carolina law allows employees in union workplaces to choose whether or not they want to pay dues. That discretion weakens workers’ collective bargaining power, labor supporters argue.
‘“They’re pretty progressive in terms of looking out for the rights of working people,’” Jones said of the Justice Center, ‘“but there seems to be a fear and a hesitancy on the part of non-profits and most elected officials. That’s to take on the anti-union laws and regulations passed by the North Carolina legislature long ago. That’s the underpinning of the statistic you’re talking about.
‘“No one talks about unions or workers being organized to bargain for better pay and businesses,’” he said. ‘“No one wants to talk about that, or the business establishment will come down on you hard.’”
Jones acknowledged that changing the state’s anti-union climate will be an uphill battle.
‘“The only way you can debate and examine these issues is to sponsor legislation and start the debate,’” he said.
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