NC job growth surging, but there aren’t enough middle-tier jobs that can lead to secure careers

July marked a milestone for the United States as the nation finally recovered all of the jobs lost in the early months of COVID-19. North Carolina has been back above pre-COVID levels since late last year, as a boom at the top and the bottom of the wage scale drove a recovery that has been faster than the national average.

After another month of strong job gains in July, North Carolina now has almost 170,000 more jobs than when COVID-19 shut the state down in 2020. Thus far 2022 has been even better for job growth than last year. We averaged just shy of 19,000 net new jobs during the first seven months of this year, faster than the same period of last year and significantly above the monthly gains for all of 2021.

The fast clip of hiring is not evenly spread up and down the wage scale. We’re seeing a return to patterns that existed following the Great Recession where North Carolina added lots of high-paying professional jobs and plenty of low-wage positions, but middle-tier jobs were far more scarce. In the past twelve months, professional and business services (which tend to pay better wages and benefits) added 46,500 positions, almost a third of the net job growth over that time. At the other end of the spectrum, North Carolina has added 31,400 leisure and hospitality jobs that pay some of the worst wages in the state. Together, those two sectors alone account for roughly half of all job growth in the last year.

This divide in the labor market poses some fundamental challenges. With many of the high-paying professional requiring advanced degrees and specialized experience, they’re functionally inaccessible to many North Carolina workers who were not afforded the opportunities needed to access those positions. Lacking the middle rungs of the wage ladder, many working North Carolinians get stuck in low-paying positions with little chance for advancement.

This wage trap has even worse implications when the cost of necessities is going up. As we reported last week, most working parents struggle to cover the cost of basic needs like housing, transportation, and child care. This problem is only getting worse, as wages have not kept up with inflation. The boom in high-paying jobs in places like the Triangle is driving costs up even faster than the national average, forcing out low-wage workers who can no longer afford to live in their home communities.

This same pattern played out for the decade after the Great Recession. A lack of education and job-training funding locked many workers in jobs that we once thought of as entry-level positions for younger workers. At the same time, failure to invest in things like housing, affordable child care, and public transportation meant low­-wage workers were crushed by rising costs and gentrification.

Even amid uncertainty about the immediate economic future, many of our deeper structural problems have not gone away. If we continue putting public dollars toward development that serves the well-off and fail to support low-wage working North Carolinians, some of the worst features of the pre-COVID economy will continue to haunt our state.