By Brian Kennedy and Alexandra Forter Sirota
Budget & Tax Center
Working families in North Carolina symbolize our state’s greatest assets—the lifeblood of local economies, the engines of productivity, the attractive force that brings business to communities and delivers the promise of stability for families and communities. Our social contract provides that as long as you are willing to work, one can expect to achieve a basic standard of living. Yet for far too many hard working North Carolina families, this promise has not been fulfilled. The results of that failure extend far beyond dysfunction in our economy to frustration with our democracy.
One in five families do not earn enough to afford the basic needs of everyday life, let alone plan for their future or ensure their children can do better. In North Carolina, a family of two adults and two children must earn $53,968 a year in order to afford housing, food, child care, health care, transportation, taxes, and other necessities, according to the Budget & Tax Center’s 2016 Living Income Standard (LIS) – more than double the federal poverty threshold for a family of four.
When workers aren’t paid what it takes to meet their basic needs, they make decisions that undercut the strength of the economy, well-being of families and vitality of communities. When work doesn’t pay, workers take on multiple jobs, cut back on savings, fail to build their assets to weather economic downturns, turn to public programs to make up the difference in their household budget and reduce their investments in their own future productivity.
Families are pursuing various strategies to cope with the low-wage labor market.
- A growing number of workers have more than one full-time job.
- Some workers are choosing to live farther from their workplaces to save on housing costs, which often results in increased transportation costs.
- Others use family and social networks to secure child care and transportation at lower costs.
- In some cases, families postpone major expenses, such as needed car repairs; go without; or increase their debt load to finance unexpected expenses.
While these strategies can help a family get by on a monthly basis, they represent a significant strain on their wellbeing as well as a barrier to their economic security and mobility. Without focused attention on policies that create quality, well-paying jobs, the promise of work for such families will continue to fall short. And without strong income supports and investments in the skills and education of the current and future workforce, North Carolina’s low-wage workers will be continually thwarted in their efforts to advance to the middle class.