Guest column – Job losses require action

By Rob Schofield

Just as Hurricane Isabel reminded millions of their vulnerability to the violence of the physical environment and the need for a better-funded, more comprehensive plan to help people survive and recover, the recent Pillowtex and impending RJR layoffs are awakening North Carolinians to similar needs in the economic environment.

As with hurricane recovery, North Carolina needs an assertive plan for collective security, shared sacrifice and improved emergency response if it is to help present and future economic storm victims.

Rather than waiting passively for market recovery to trickle down, the state should actively pursue a proactive, three-part strategy.

First, emergency relief systems should be improved with three new tools that could make an enormous difference:

* Attack the explosion in mortgage foreclosures by adopting a family home preservation initiative modeled on Pennsylvania’s successful Homeowner’s Emergency Mortgage Assistance Program. The program has provided nearly 30,000 loans over the past two decades at a modest cost to the state.

* Appoint an emergency economic recovery coordinator. Currently, no single state official makes it his or her day-to-day job to assure that all emergency economic assistance programs are made fully available to all deserving families.

* Establish a multi-purpose emergency relief fund. Currently, state and local officials are using large amounts of their valuable time to beg and borrow resources and favors from private donors.

The second strategy should be to redirect failed business tax incentives toward targeted tax relief for low- and moderate-income families.

North Carolina’s current economic development strategy relies on business incentives designed to lure wavering companies to relocate.

Despite a price tag of over $100 million a year, few of these incentives have resulted in gains for hard hit communities.

A far more efficient and direct economic boost could be generated at almost the exact same cost through the adoption of a refundable state earned-income tax credit.

Rather than producing speculative, “trickle down” job growth, the tax credit would put money directly into the hands of consumers who patronize the merchants and other small businesses that are the life’s blood of most communities.

The third strategy is to build a stronger infrastructure of educated, mobile, healthy and employable workers.

This will mean a renewed commitment to public education, particularly in the community college system, where much can be done to improve the linkage of training programs to developing industries; to transportation, so that workers can get to new jobs; and to health and child-care, so that workers can afford to work at the kind of entry-level wages that represent the vast majority of new employment opportunities.

While state policymakers may be tempted to opt for supposedly painless miracle cures, such as a new round of corporate tax breaks, North Carolina’s ills will be better healed through sober, steady investments in the workers and families that, together, constitute the state’s front line against future economic storms.

Rob Schofield is a staff attorney for the N.C. Justice and Community Development Center in Raleigh.

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