North Carolina continues to lag nation in job creation and is moving in the wrong direction
Published December 11, 2013
by Alexandra Forter Sirota, NC Budget and Tax Center, December 11, 2013.
Despite recent superficial improvement in North Carolina’s unemployment rate, persistent joblessness continues to plague the state’s workers and hinder the state’s recovery from the Great Recession. In recent years, North Carolina has consistently lagged the nation in reducing unemployment—a trend that appears to be getting worse.
At first glance, the news that the state’s unemployment rate has dropped 1.7 points from 10.4 percent in August 2011 to 8.7 percent in August 2013 shows that North Carolina is headed in the right direction. But while any reduction in unemployment is certainly good news, a deeper look reveals that the news isn’t quite as good as advertised. As we have written about before, much of what is driving the drop in unemployment is a decline in the labor force.
Moreover, recent gains by North Carolina are just not enough to catch up to the rest of the nation. For example, the national unemployment rate also dropped 1.7 points from August 2011 to August 2013, putting the national average at 7.3—well below the state jobless rate.
North Carolina has consistently lagged behind the rest of the nation in terms of the percentage of its citizens that have jobs. Since the unemployment rate does not count the number of unemployed workers who have given up on finding work, the number of people with jobs compared to the total working-age population is a far better indicator of the true health of the job market for workers than the traditional jobless rate. According to this measure, 54.6 percent of working age people in the Tarheel State were employed, compared to 58.6 percent in the nation as a whole. To reach the national average, North Carolina would need 130,000 more people with jobs in the economy.
The jobs-to-people trends are even more discouraging when looking over the longer term. In the two years from August 2011 to August 2013, the national percentage of the population with jobs has remained largely steady between 58.3 and 58.7, suggesting a stable level of employment in the nation as a whole. But the North Carolina rate has experienced a very different trend over the past two years. After rising from 56.3 in August 2011 to 57.4 percent in December 2012, the state’s rate has fallen precipitously back down to 56.3 in August, erasing nine months’ worth of gains. This downward trend suggests that North Carolina’s labor market is moving in the wrong direction, leaving too many workers with too few job opportunities.
Despite modest private sector job creation, unemployment remains high, and too many workers cannot find work. When compared to the national economy it is clear that North Carolina continues to underperform. Policymakers must recognize that without considering direct job creation strategies and investments in job training and economic development, the jobs for workers trend will continue in the wrong direction.
December 11, 2013 at 9:18 am
TP Wohlford says:
Given that the most spectacular job growth has been in the high tech sector, and that global forces have pushed the major players into decline, I'm not sure how this conclusion is reached.
Does Alexandra Forter Sirota and her NC Budget and Tax Center propose training unemployed turkey farmers with the skills needed by these high-tech giants? From shovel to Java code?
And in light of the current IT high tech down turn -- Xerox, for instance, just laid off 500 here in NC -- do they propose some legislation to turn that situation around? Or do they propose to subsidize more turkey farms and furniture factories?
What this REALLY seems like is another pat answer to a complex problem, this time from a source that always loves more money for gov't.
December 11, 2013 at 10:54 am
Norm Kelly says:
So, may I suggest that the answer to the problem of our statistics not looking as good as the feds released statistics should be handled in exactly the same way. Would the author of this post like it if NC's statistics were calculated using the same mathematical formula that is used at the federal level?
Since the feds have been using 'new math' to calculate the unemployment rate since just prior to the last presidential election, let's get them to show NC the formula so our numbers look better also. Just prior to the presidential election, it suddenly became possible for 200,000 new jobs (or fewer) to lower the unemployment rate. Prior to this point, it was necessary for over 200k new jobs to be created in order to keep the unemployment rate steady. In order for the unemployment rate to be reduced by 1/10 of 1%, say from 11.1% to 11%, would take somewhere between 200-250k jobs. As the presidential election approached, suddenly the stats showed unbelievable numbers like 210,000 new jobs were created in a month, and the unemployment rate dropped .2%. By a miracle of great governing, the DemocRATs in Washington, including King Barack, were able to magically get the numbers to change. No one in the press questioned how the sudden change in math worked. No one in the left wing wondered why unemployment CAME DOWN with such dismal job creation statistics. Just a few months prior, a job creation number around 200,000 in a month showed the unemployment rate either steady or increasing. Then, again magically, without question, the same 200,000 jobs created started reflecting anywhere from .1% to .4% rate drop. And the magic has continued.
So, if this author, and the rest of NC residents wish to feel better, might I suggest you stop looking at the real numbers and start looking at the numbers the same as the feds do. Use the same formula. Sleep better tonight. Have a Merrier Christmas. Problem solved.
Of course, we could take the liberal approach to creating jobs. Tax residents more, spend more government money on hiring people, or pay them more for not working, or provide them more food stamps cuz this stimulates the economy. With more spending from Raleigh, we're guaranteed to increase employment. Just ask a liberal.
(note: some 41% of the 'jobs created' in the latest numbers released by the central planners were GOVERNMENT jobs. this doesn't reduce the unemployment rate so much as it explodes the cost of government. it's actually less expensive if we tax payers just paid these people to stay home some more until they could find a real/private sector job.)
December 13, 2013 at 8:14 pm
Gary Arrington says:
Alexandra Forter Sirota proclaims "North Carolina continues to lag nation in job creation, and moving in the wrong direction". Meanwhile, the editor of the Greenville Daily Reflector writes:
I decided to go a little further and do some research myself. The Federal Reserve Bank of Philadelphia also produces a "state coincident index" that summarizes four state-level employment variables. For the month of October, North Carolina was among the top 10 states in job creation (http://www.philadelphiafed.org/research-and-data/regional-economy/indexes/coincident/2013/CoincidentIndexes1013.pdf)
Ms. Sirota, as director of the Budget and Tax Center, seems to use only the facts that bolster her far-left views.
