Have benefits cuts reduced unemployment? Yes

by Sharon Decker, NC Secretary of Commerce, published in Charlotte Observer, January 25, 2014.

Since the day Gov. Pat McCrory took office, the unemployment rate has dropped two points and more North Carolinians are collecting a paycheck than were a year ago. Tax reform has also spurred more businesses to consider locating in North Carolina. This year, Lee Controls listed tax reforms as a major reason it moved its headquarters from New Jersey to Brunswick County.

There are those who complain that the unemployment rate’s drop is caused by North Carolinians dropping out of the work force because they’ve grown discouraged, in part, because North Carolina changed its unemployment benefits program. The argument is not backed up by the data nor does it pass the common sense test. If a person needs a job, how can he afford to drop out of the labor market?

There are some early signs that the reduction of payments coupled with shortening the benefit window has prodded people to take jobs they initially declined as long as an unemployment check was being deposited.

That mirrors what some employers have told Gov. McCrory and me, nearly since we took office. Some applicants told them they resisted taking jobs because it made more economic sense for them to take unemployment. The Observer reported this month that a laid off commercial construction manager wouldn’t have taken a Home Depot job had he continued to receive his unemployment insurance payment.

The purpose of unemployment reform was to bring the state’s benefits in line with neighboring states and to pay off our state’s $2.5 billion debt to the federal government. Those changes will ultimately lead to a stronger business climate that supports long-term, sustainable job growth.

As our governor often says, “The best thing we can do to help unemployed North Carolinians is to help them find a job.”

We’ve taken important steps to strengthen workforce development programs at the Department of Commerce. We’re cross-training employees to handle the various services being offered at our local workforce offices to make our programs more efficient and customer-friendly. We’ve also launched the NCWorks.gov website, which connects job seekers with employers. We also believe this online initiative will help reduce the skills gap by identifying training opportunities that make job seekers more prepared for high-demand jobs.

Gov. McCrory has repeatedly made it clear that the creation of good jobs for every North Carolinian who wants one is his overarching mission. His energy production initiatives promise to bring tens of thousands of jobs to North Carolina, particularly to areas where economic development has been historically challenging. The transportation reforms he put into place will yield greater job creation by moving more people and products between the state’s major economic centers and rural communities.

Our governor is working to increase defense contracting and the military’s presence in North Carolina to add to that sector’s $30 billion annual input into the state’s economy.

Job creation is at the center of Gov. McCrory’s education reforms. He is bringing education and business leaders together to ensure we have well-paid teachers who provide our students with an education that will allow them to graduate with skills that allow them to enter the workforce or pursue post-secondary degrees or certifications without the need for remediation. Our students must have the skills to help build our economy after graduation from a high school, community college or a university.

North Carolina’s economy is coming back from the worst economic setback it has experienced in modern times. And the charge Gov. McCrory has given me, the Commerce Department and every Cabinet Secretary is simple and resolute: Rebuild our state’s economy and don’t be dissuaded by those who put politics ahead of North Carolina’s long-term economic future.