The Work-Wage Disconnect

(Cross-posted from The Progressive Post, a North Carolina blog)

The typical North Carolina family with children must earn $41,184 annually to afford the actual market prices of seven essential goods and services: housing, health care, childcare, food, transportation, taxes and other necessities. Yet 37 percent of studied family types fall below this modest income threshold.

These findings come from the new report Making Ends Meet on Low Wages , published by the NC Budget & Tax Center. By using actual cost estimates, the study constructs detailed budgets for four common family types in every North Carolina county, metropolitan center, workforce area and economic development region. All things equal, larger families and families in metropolitan areas require higher incomes than smaller families and families residing in non-metropolitan areas. Overall, families in the Triangle have the greatest income requirements.

Alarmingly, the vast majority of the families that fall below the income standard contain adults who work on a full-time basis. This suggests that difficulties result not so much from a lack of work effort as from the kind and quality of existing jobs.

Public policy can play a prominent role in closing the disconnect between the wages earned in many jobs and the amount of income needed to support a family with a modest, if not austere, lifestyle. Three broad areas of action are the following:

1) Expanding access to work-support programs, such as child-care subsidies and children's health insurance.

2) Improving the quality of existing jobs by strengthening existing employment standards and adopting new standards reflective of current realities.

3) Enriching the skills of current and future workers by strengthening the North Carolina Community College System.