Student Corner: Taking a closer look at low wage workers in North Carolina

Community and Economic Development – Blog by UNC School of Government

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Student Corner: Taking a closer look at low wage workers in North Carolina

By CED Program Interns & Students

Published March 5, 2015

By many measures, the job market in North Carolina seems to be recovering well from the recession. In December 2014, the statewide unemployment rate stood at 5.5%, down from 7.5% a year before (December 2013) and a high of 11.3%. At a national level, though, some analyses suggest that a large proportion of the jobs that have been created since the recession pay low wages.

What role does low-wage work play in North Carolina’s economy? In fall 2014, a UNC Department of City and Regional Planning (DCRP) student workshop collaborated with the UNC Center on Poverty, Work and Opportunity to build an online data resource surveying low-wage work in North Carolina. This blog post takes a look at some important findings for North Carolina community economic development practitioners. 

Who are North Carolina’s Low Wage Workers?

The authors of this study defined “low-wage” as below 150% of the federal poverty level for a family of two (i.e. a single parent), which adds up to $11.34/hour or less in North Carolina. According to this definition, 31% of all workers in North Carolina work in low-wage jobs. These workers are slightly more likely to be female (55%). More than half (57%) of North Carolina’s Hispanic workforce earns less than $11.34/hour, compared to 38% of African-American workers and 25% of white workers.

In the debate about low-wage work, the question is often raised whether most low-wage workers are young workers just entering the workforce. The study unpacks low-wage work by age, finding that among workers under 24, the proportion of low-wage workers is indeed much higher – 90% or more for 17, 18 and 19 year old workers. But even for workers in their 30s, 40s, and 50s, at least one-fifth of workers in each of these age cohorts are working in low-wage jobs.

The study also looks at what role low-wage workers play in North Carolina households. Of households that have at least one low-wage worker, about half rely on that low-wage income as their primary source of income, and for a quarter, it’s the only source of income. And these low-wage-dependent households are distributed throughout the state – in every county in North Carolina, at least 17% of jobs pay $11.34/hour or less (in some counties, upwards of 40% of jobs pay low wages).

Taking a closer look at the industries with the lowest average wages in North Carolina offers a clue to this broad geographic distribution. The study identified industries where the average wage is less than $11.34/hour – in other words, the average worker in that industry is a low-wage worker. These “low-wage” industries are the type of industry that is present in almost every community: restaurants, grocery stores, gas stations, child care services, home health care services, and assisted living. Employment in these industries has generally grown over the last 20 years, particularly in the restaurant industry, which has grown 82% in the last 20 years and now employs 8% of all North Carolina workers.

What Does This Data Mean for North Carolina Community Economic Development Practitioners?

The broad geographic distribution of low-wage work in North Carolina means that this is a challenge that affects almost all North Carolina communities. The website offers some state-level policy implications – for example, exploring the cost of social services for workers earning low wages – but has less to say about how community-level practitioners can address low-wage work. Practitioners might ask how many residents in their communities are working full-time, but struggle to support a family. How are these workers impacting locally provided social services? Is valuable human capital in your community being under-valued? What kinds of jobs and educational resources can your community grow and attract to help these workers build stronger, more sustainable careers?

Julianne Stern is a graduate student in both the Master of City and Regional Planning program and the Kenan-Flagler Business School at UNC-Chapel Hill. She is also a Fellow with the Development Finance Initiative.