After searching unsuccessfully for months to find work in rural Lumberton, Regina Carmichael got a placement through a temp agency driving fork lifts at a factory two towns away for $7.95 an hour. Despite the low wages and two-hour commute, she was hopeful it would lead to permanent employment. But two years later, she still earns barely more than minimum wage “doing the same job as guys making $19.95 an hour.”
Regina is far from alone. Despite the state’s overall low unemployment level of 4.4 percent as of April, many still struggle to find work, especially good jobs that provide a dignified standard of living. This is especially true for workers living in the state’s rural areas, who typically face higher unemployment rates than their urban counterparts, particularly rural workers who are black, Latino, or mixed race.
Addressing this lingering employment challenge for rural workers is critical for their families and communities, and the state economy as a whole. Our new analysis finds that North Carolina could gain $5.2 billion in economic activity every year with a true full employment rural economy.
The proliferation of temporary jobs is one of the challenges facing rural workers. In focus group discussions with unemployed and underemployed workers in Lumberton, Rocky Mount, and Eden many workers shared their frustration with earning less than co-workers who did the same work but were regular employees, and with lacking health care and other benefits despite working for the same employer for several years.
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Their accounts align with data revealing the growth in temporary employment: Between 2009 and 2014, the number of temporary workers grew by 52 percent in North Carolina, compared with 39 percent nationwide. These temporary workers earn an average annual salary of roughly $30,600, compared to the $45,000 average earned by workers in the state economy as a whole.
But the replacement of traditional jobs by temporary ones is not the only challenge for rural workers seeking employment or professional advancement. The high cost of child care, lack of access to public transportation, and criminal background checks also make it difficult for rural workers to find and maintain full-time jobs. Addressing these barriers is critical for supporting rural workers and improving socioeconomic conditions in these communities.
To understand how much the state would benefit from addressing these issues, we hypothesized a “full employment for all” economy where every rural worker who wants a job can find one and labor force participation increases to rates similar to those during the economic boom of 2000. If employment opportunities were equitable in this way, about 146,000 more workers would be employed, over 55,000 fewer residents would be in poverty. Bringing more workers into the labor market would also add $1.1 billion in tax revenue per year.
Achieving full employment for all would have also have additional multiplier effects for rural communities. More employed rural workers would lead to increased spending in the local economy, stronger local businesses, more entrepreneurial opportunities, and more sales tax revenue for local governments.
A full-employment-for-all scenario would ultimately benefit those rural North Carolinians that have been most locked out of the economy. Black men, Asian women and women of mixed race/other backgrounds would experience the largest drops in unemployment. Full-employment-for-all would also yield increased income for many rural workers. For example, rural Native American households would see their average incomes grow by 6 percent, while rural black households would see a 5 percent increase in income.
To help advance the statewide dialogue on addressing barriers facing rural workers, our analysis offers several policy solutions such as: prohibiting the use of temporary workers on projects funded through public contracts, increasing funds to support child care assistance, targeting hiring programs for hard-to-reach populations such as disconnected youth, and increasing the skills of workers through apprenticeships.
These efforts will help improve the livelihoods of thousands of workers, their families, their communities, and ultimately the entire state economy.