South By North Strategies, Ltd.

Two Decades Of Cuts To Public Higher Education

• Public institutions have played an important role in serving the growing numbers of undergraduate students. Public institutions absorbed 65.6 percent of the undergraduate enrollment increases that have occurred since 1990.
• After controlling for inflation, states collectively invested in higher education $6.12 per $1,000 in personal income in 2010-2011, down from $8.75 in 1990-1991, despite the fact that personal income increased by 66.2 percent over that period.
• Over the past 20 years, there has been a breakdown in the historical funding pattern of recessionary cuts and expansionary rebounds. The length of time for higher education funding to recover following recessions has lengthened for every downturn since 1979 with early evidence suggesting that the recovery from the Great Recession will be no different.
• Between 1990-1991 and 2009-2010, published prices for tuition and fees at public four-year universities more than doubled, rising by 112.5 percent, after adjusting for inflation, while the real price of two-year colleges climbed by 71 percent.
• Median household income in the United States in 2010 was just 2.1 percent higher than in 1990.

“When we turn our back on higher education, we turn our back on the future of the middle class in America,” said Viany Orozco, Senior Policy Analyst at Demos, who oversaw the development of the report. “State and federal legislators need to recognize that our future workforce will demand a higher education degree; a college degree is not a privilege, it is a necessity.”

“Despite its long history of support for community colleges and public universities, North Carolina has not been immune to the wave of disinvestment that has swept across the nation since 1990,” explained Quinterno. “After adjusting for inflation, the state’s investment of its own funds in higher education amounted to $11.51 per $1,000 in personal income in 2010-2011, down from $13.64 in 1990-1991.”

“The decline in North Carolina’s investment occurred despite the fact that inflation-adjusted personal income in the state grew by 90 percent over the past 20 years,” added Quinterno. “Simply put, North Carolina has become a richer state that is investing less of its wealth in the institutions that help individuals secure a place in the middle class and help fuel the state’s long-term economic prosperity.”

The report calls for renewing America’s commitment to nurturing a strong and inclusive middle class through investments in public higher education. It underscores that states have the capacity to invest more, for despite the budget challenges of recent years, every state is wealthier than it was 20 years ago.

Tax Truth: (Almost) Everybody Pays

The Brookings Institution points out that “just about everyone” pays taxes of some type.

Finally, incorporating the additional—and significant—other forms of taxation into our calculation leads to the conclusion that nearly 100 percent of Americans pay taxes in some way, shape or form. All consumers bear the burden of state and local property, sales, and income taxes, as well as excise taxes on items like gasoline, alcohol, or cigarettes. These other taxes tend to be regressive, imposing more of a burden on low-income families than on high-income families—the state and local tax burden is over twice as large as the federal tax burden for the bottom fifth of households (Citizens for Tax Justice 2011). When you fill up your car with gasoline, you can’t avoid paying the tax. The pump does not differentiate between the richest Americans and the poorest families.

Editor’s Note

Policy Points will not appear today in honor of the Easter and Passover holidays. Regular posting will resume tomorrow, April 10, 2012.

Thank you for your continued interest in the blog!

National Job Market Ran In Place In March

CHAPEL HILL (April 6, 2012) – The national employment situation held steady in March, as employers added 120,000 more payroll positions than they eliminated. Moreover, the unemployment rate essentially held constant at 8.2 percent with unemployment rates largely holding steady among major demographic groups. While the labor market has improved recently, unemployment remains high, and overall conditions are far from healthy.

“March marked the 18th consecutive month of job growth in the United States,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Compared to the developments of recent years, 2012 is off to a good start with the national economy having gained 635,000 more jobs than it has lost. Given the magnitude of the recent recession, however, the economy still is not growing fast enough to drive unemployment down to normal levels.”

In March, the nation’s employers added 120,000 more payroll positions than they cut. Gains occurred entirely in the private sector (+121,000), while government payrolls fell by 1,000 positions due mainly to cuts by local governments. Additionally, the payroll employment numbers for January and February underwent revisions; with the updates, the economy gained 515,000 jobs over those two months, not the 511,000 positions previously reported.

Most major private-sector industry groups netted jobs in March. Leisure and hospitality services netted the most positions (+39,000, due almost entirely to gains in the accommodation and food service sub-sector), followed by education and health services and manufacturing (both +37,000). Meanwhile, the trade, transportation, and utilities sector shed the most positions (-26,000 due mainly to reductions in the retail trade sub-sector), followed by the information (-9,000) and construction sectors (-7,000).

“Over the past three months, the economy has gained an average of approximately 212,000 jobs,” noted Quinterno. “The current pace of job growth is nevertheless modest relative to the size of the overall jobs gap. The American economy still faces a shortfall of almost 10 million jobs—a gap that will take several years to close at the current pace of growth.”

Soft employment conditions were evident in the March household survey. Last month, 12.7 million Americans (8.2 percent of the labor force) were jobless and seeking work. The number of unemployed Americans and the unemployment rate basically held steady last month, as did the share of the population participating in the labor force (63.8 percent) and the share of the adult population with a job (58.5 percent); regardless, all of those indicators remained at depressed levels.

Last month, the unemployment rate was higher among adult male workers than female ones (7.6 percent versus 7.4 percent). Unemployment rates were higher among Black (14 percent) and Hispanic workers (10.3 percent) than among White ones (7.3 percent). The unemployment rate among teenagers was 25 percent. Moreover, 7.5 percent of all veterans were unemployed in March; the rate among recent veterans (served after September 2001) was 10.3 percent.

Jobs remained difficult to find in March. Last month, the underemployment rate equaled 14.5 percent. Among unemployed workers, 42.5 percent had been jobless for at least six months with the average spell of unemployment lasting for 39.4 weeks.

“The March employment report shows that the American economy is continuing to add jobs, though not as rapidly as is needed or would be expected following a recession as severe asthe recent one,” observed Quinterno. “The March employment report illustrates both the degree to which conditions have improved from the depths of the recession and just how far from healthy the national labor market remains.”

Local Unemployment Rates Drop In February

CHAPEL HILL (April 5, 2012) – Between February 2011 and February 2012, unemployment rates fell in 81 of North Carolina’s 100 counties and in 13 of the state’s 14 metropolitan areas. These findings come from new estimates from the Labor and Economic Analysis Division of the North Carolina Department of Commerce.

“Local labor market conditions improved across much of North Carolina over the past year, but unemployment nevertheless remains at elevated levels,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “While unemployment rates dropped in 81 counties and 13 metros over the year, unemployment rates at or above 10 percent remain the norm in 74 counties and 7 metros.”

Compared to December 2007, which is when the economy fell into recession, North Carolina has 5.1 percent fewer jobs (-214,300) and has seen its unadjusted unemployment rate climb from 4.7 percent to 10.1 percent. In February, the state gained 8,300 more payroll jobs than it lost. Since bottoming out in February 2010, the state’s labor market has netted an average of roughly 4,700 jobs per month, resulting in a cumulative gain of 112,000 positions (+2.9 percent).

Between January and February, unemployment rates fell in 84 counties, yet nearly three-quarters of all North Carolina counties posted unemployment rates of at least 10 percent. Individual county rates ranged from 6.3 percent in Orange County to 20.7 percent in Graham County. Compared to the prior month, unemployment rates were lower in 84 counties, higher in 10 counties, and unchanged in 6 counties.

“Non-metropolitan labor markets continue to lag metropolitan ones,” added Quinterno. “In February, 11.6 percent of the non-metro labor force was unemployed, compared to 9.6 percent of the metro labor force. Compared to December 2007, the non-metro labor force is now 1.6 percent smaller in size, and 7.9 percent fewer individuals have jobs. Meanwhile, the number of unemployed rural persons has grown by 105.5 percent and now totals 152,630.”

Last month, unemployment rates fell in 13 of the state’s 14 metro areas and held steady in one metro (Jacksonville). Rocky Mount had the highest unemployment rate (13.3 percent), followed by Hickory-Morganton-Lenoir (11.8 percent). Durham-Chapel Hill had the lowest rate (7.8 percent), followed by Raleigh-Cary (8.1 percent) and Asheville (8.4 percent).

Compared to February 2011, unemployment rates were lower in 81 counties and 13 metros. Some 59 counties and 13 metros logged increases in the sizes of their local labor forces. Among metros, Asheville’s labor force expanded at the fastest rate (+3.1 percent), followed by Raleigh-Cary (+3 percent) and Durham-Chapel Hill (+2.7 percent). Metro areas now are home to 71.7 percent of the state’s entire labor force with slightly more than half of the entire labor force residing in the Triangle, Triad, and Charlotte metros.

In the long term, any meaningful recovery will hinge on growth in the Charlotte, Research Triangle, and Piedmont Triad regions. Yet growth remains weak. Collectively, employment in these three metro regions has risen by just 0.4 percent since December 2007, and the combined February unemployment rate in the three regions equaled 9.2 percent. Of the three broad regions, the Research Triangle had the lowest unemployment rate (8.2 percent), followed by the Piedmont Triad (10.1 percent), and Charlotte (10.3 percent).

“Local labor market conditions improved over the course of the year in much of North Carolina, but the modest nature of the improvements offered little comfort to the nearly 500,000 Tar Heels who are unemployed,” said Quinterno. “Unemployment remains a serious problem across much of the state, and little in the February report suggests that conditions will improve markedly anytime soon.”