Jul 25, 2022 - Business

N.C.'s good for business, but low-income workers struggle

Illustration of a business man being crushed by a large briefcase.

Illustration: Maura Losch/Axios

North Carolina may be considered the top state to do business — thanks largely to its ability to create generous incentives for companies — but its labor rankings have trended toward the bottom of the pack.

What's happening: Since NC was recognized last week by CNBC for its inviting business climate, some labor activists have responded by pointing out a 2021 analysis from Oxfam America that labeled the state as the worst state for workers.

The low wages of the state have made its biggest cities, Charlotte and Raleigh, some of the least affordable places for workers earning the minimum wage, which hasn’t budged from $7.25 an hour in 13 years.

  • A 2022 analysis from the site Move.org put both cities among the worst for minimum wage workers, noting their housing costs have grown significantly in recent years.
  • "And our legislature won't allow local governments to raise [minimum] wages in their municipalities," said MaryBe McMillan, president of the NC State AFL-CIO, a labor organizing group.

What they're saying: The contrast of the two rankings shouldn't be surprising, John Quinterno, a principal with South by North Strategies, an economic research consulting firm, told Axios, calling them "two sides of the same coin."

  • "Those business rankings are looking at labor as a cost to be minimized, so policy regimes that promote lower wages, fewer benefits and fewer workplace regulators, are seen as positives."

Quinterno added that what stood out about the CNBC report was the emphasis on luring companies to the state with incentives.

  • In the past year, the state has pledged billions of dollars in incentives to land expansions from Apple, VinFast, Toyota and Boom Supersonic.

State of play: While the state legislature has been divided for years on issues of labor policy, both parties have generally become proponents of using incentives in recent years — ratcheting up the total amount of money the state can throw at companies several times.

  • In 2017, the state created a new class of its Job Development Investment Grants for "transformative projects," which gave the state more room to provide incentives.
  • The most recent state budget and a new regulatory bill made hundreds of millions of additional dollars available to VinFast and Toyota.

What's next: McMillan said she expects workers to keep pressing the legislature and employers in the state for better benefits and higher wages.

  • Already, she said, the Fight for $15 minimum wage movements have had some impact.
  • And with inflation rising, she expects more workers will push for better benefits, like what's happened at Starbucks and Amazon.

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