Charlotte Observer, July 29, 2008: One-third of our working families earn low incomes

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From “Making Ends Meet on Low Wages” by John Quinterno with Meg Gray and Jack Schofield of the N.C. Justice Center.

For a sizable number of North Carolina families work falls far short of its promise. One-third of North Carolina’s working families earn low incomes, and the number and proportion of such families has risen since 2000. That increase, in turn, is linked to trends in the labor market, most disturbingly the growth of low-wage work. In 2006, some 24 percent of working Tar Heels earned less than $9.12 per hour. Moreover, low-wage jobs are less likely to provide basic workplace benefits, thereby increasing the odds that people will be unable to move ahead.

Restoring the promise of work for families earning low wages is a central challenge confronting North Carolina. Yet a lack of meaningful statistics about the economic pressures facing low-wage families often hinders progress. The primary national measure, the federal poverty level, is widely regarded as outmoded. Similarly the prolonged erosion in the value of the minimum wage has undercut its relevance as a basic wage standard.

To better inform the debate around work, wages and opportunity, the North Carolina Budget and Tax Center developed the Living Income Standard (LIS), a market-based approach for estimating how much income a working family with children needs to pay for basic expenses. The 2008 version of the LIS finds that the typical North Carolina family with children must earn $41,184 annually an amount equal to 201 percent of the federal poverty level to afford the actual costs of seven essential expenses: housing, food, childcare, health care, transportation, other necessities and taxes. To meet that level, the adults in the average family would need to earn a combined $19.80 per hour for every working hour of every week

Yet 37 percent of the families included in this study fall below that modest income threshold. Hard work alone often fails to deliver a modest standard of living to many North Carolina families.

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