After hitting record-high levels of inflation last June, the economy has been on a steady decline ever since. If you have enough money to ride the proverbial wave, you’ll make it out unscathed. The problem is that many people in North Carolina do not have the fiscal cushion this approach expects. Current inflation is cyclical, but it’s exacerbated the much larger, significant problem of wealth inequality. And we’ve all but ignored it.
It’s unlikely current inflation will destabilize North Carolina’s long-term economy — North Carolina’s 2022 budget allocated $1 billion to stabilize the post-inflation economy. Plus, the Inflation Reduction Act introduced new incentives towards eco-friendly infrastructure and clean energy industries which forecast continued domestic growth. Basically, we’re covered for the foreseeable future.
Despite these safeguards, public discourse has mostly remained focused on inflation. Somewhat rightfully so — if you’re a low-income household, inflation can be especially devastating. However, low-income households have already been suffering for years due to prolonged economic inequality in North Carolina. Inflation is just a red herring; now, we must do something about the real problem.
Income inequality in North Carolina is nothing new. Between 2009-2013, the top 1% captured all income growth. Today, the bottom 50% of workers hold just 14% of the state’s wages while the 80th percentile makes twice as much as the median wage. Even if you’re not part of the 13.4% of North Carolinians living in poverty, the poverty level — roughly $22,507 per year — does not come close to the actual cost of living.
You might argue that ongoing poverty is an individual problem, not a governmental one. But, North Carolina has certain systemic barriers that inhibit class mobility. For starters, the minimum wage.
The living minimum wage for one adult with no children to support themself in North Carolina is $16.83 per hour, provided they are working full-time. The minimum wage of $7.25 is less than half of that. Keeping in mind that a person needs to sleep and eat, they could never work enough hours to cover their living expenses on minimum wage. Raising the minimum wage would be a simple, effective way to alleviate poverty and close the economic gap, but North Carolina has not done so.
Besides harming North Carolinians directly, in the context of the broader economy, economic inequality can inhibit long-term growth — a potential problem for Governor Cooper’s planned expansions. It’s in our best interest as a state and as decent human beings to prevent income inequality from spiraling out of control.
So, inflation has hit and people are starting to notice the strain on North Carolina households. But that strain has existed for years — inflation is just the hot-button scapegoat drawing all the attention. Now that we’ve addressed inflation, our legislature needs to do something about economic inequality and poverty. Inflation is cyclical, but economic inequality could cripple North Carolina before it’s even gotten to its feet.
