NC Budget and Tax Center

August’s terrible jobs report

North Carolina’s unemployment rate dropped to 8.7 percent in August, according to the latest jobs report from the Division of Employment Security, but this “improvement” is largely the result of a mathematical quirk, and masks deeper, long-term problems in the state’s labor market—most notably, the lack of available jobs for unemployed workers.

While the number of unemployed people dropped last month, this is only because jobless workers gave up on their job search and dropped out of the labor force, not because they actually found jobs. In August, the labor force—the pool of prime-aged workers who are employed or looking for a job—dropped by 12,300, to the lowest levels since December 2011. At the same time, the number employed persons also dropped by 3,500—to lowest levels since August 2011. If the workforce continues to shrink, it is unlikely that the state will be able to completely replace the 328,000 jobs lost during the Great Recession or meet the needs of a growing population.

Job creation also appears to be moving in the wrong direction. Total nonfarm employment—as measured by the survey of establishments—actually fell by 1,700 jobs last month, and just 66,700 jobs over the last year. At this rate of annual job creation, it will take another 21 months for North Carolina to generate enough new jobs to get back to pre-recession employment levels.

An additional cause for concern is the fact that the state’s fastest growing industry pays the lowest wages. Over the last year, Leisure and Hospitality Services grew by 18,700 jobs, accounting for almost a quarter of the total employment growth in the state. Unfortunately, this industry pays $8.30 an hour, more than $12 below the statewide average—suggesting that the state’s growth opportunities are in ultra-low wage jobs. And just as these ultra-low-wage jobs are exploding, opportunities for higher-wage jobs are diminishing. Government jobs, which pay on average $21 an hour, have dropped by 12,000 over the last year.

Given that the majority of all job creation is occurring in industries that don’t pay a living wage, it’s hard to see how the state’s economy can continue to improve without significant income growth to support consumer spending at local businesses.

19 Comments

  1. Frances Jenkins

    September 21, 2013 at 7:44 am

    Only at PP with Bluepoint Blueprint guidelines could the latest numbers be viewed as a negative. You have sunk to an all time low.

  2. Alan

    September 21, 2013 at 10:30 am

    Frances,

    On the contrary, I think your latest comment is an all time low. Your ilk have been complaining about the so called Obama recession, constantly blaming the president for the lack of jobs. The Great Recession was in large part caused by the previous Republican administration and it’s economic policies. That is why we have the level of unemployment we do.

    If this article praised the latest jobs numbers, you would counter with a polar opposite comment blaming the president for the lack of job creation.

    I fail to understand how we should be celebrating the creation of so many jobs that are fractionally above minimum wage. Having so many of our fellow citizens living having to survive on poverty level wages isn’t exactly good news for anyone.

  3. HunterC

    September 21, 2013 at 12:51 pm

    People who don’t understand the difference between numerators and denominators have no business discussing economics.

  4. LayintheSmakDown

    September 21, 2013 at 5:13 pm

    Frances, this is right out of the progresso playbook. Up is down in their bizarro world. Also, expect when this economy where the Soetero administration is in power goes way South soon, for them to blame it on the Republicans even though they hold no power in DC.

  5. Frances Jenkins

    September 21, 2013 at 8:21 pm

    Sometime the truth must win. It never appears with Progressive Pulse, Chris,Rob or Greg they never tell the truth.

  6. Frances Jenkins

    September 21, 2013 at 8:21 pm

    Sometime the truth must win. It never appears with Progressive Pulse, Chris,Rob or Greg they never tell the truth.

  7. Alan

    September 22, 2013 at 10:37 am

    It’s GOP tin-foil hat time, again… Frances/LSD, why don’t you go try living on $8.30 per hour and report back here how you managed?

  8. Alan

    September 22, 2013 at 10:43 am

    LSD, would you care to expand on your “Soetero” comment, so we can all understand exactly what your point was?

    Dog whistle racism if you ask me…

  9. LayintheSmakDown

    September 23, 2013 at 11:02 am

    Hey Alan, there are no tin foil hats left. Esmay cornered the market in them.

    Soetero….you know the real name Barry Soetero used until they wanted him to seem “black enough” to elect back in the early ’00’s. You know, the guy leading us down the Socialism path with the coming universal healthcare disaster. You can’t tell me you have never heard of your messiah of the progressoes!

  10. david esmay

    September 23, 2013 at 11:57 am

    LSD, once again, lay off the brown acid.

  11. Allan Freyer

    September 23, 2013 at 12:13 pm

    So I’m intrigued by the claims that my interpretation of the latest unemployment data as “terrible” is somehow “biased.” If math and facts have a well-known bias, then I guess this must be true. But in the real world of math and facts, the trends are pretty obvious–and pretty bad.

    Here’s how you calculate the unemployment rate–you divided the number of unemployed persons by the number of people in the labor force–the pool of prime aged workers who either have a job or are unemployed and looking for work (according to the Bureau of Labor Statistics Local Area Unemployment Survey).

    While the number of unemployed did go down from July to August, the number of employed people went down as well. This means that unemployed people are not moving into the ranks of the employed,. If they were, the number of employed people have increased.

    So where did these unemployed people go, if not into employment? Turns out, they basically gave up and stopped looking for work. We know this because the labor force went down as well (to the lowest levels in two years)–in fact, it went down far more than the drop in unemployment.

    The result is a mathematical quirk–the unemployment rate went down, despite the fact that fewer people were employed in August than in July.

    So that’s the mathematical reality. I’m unclear as to how this is somehow “biased,” and if so, how this reflects a left-leaning bias, as opposed to a right-leaning bias. As Alan’s first comment pointed out, one could take the terrible jobs report and blame it either on NC GOPers or on DC Dems. It’s worth noting here that my supposedly “biased” piece didn’t do either–it simply discussed the factual reality involved in the latest unemployment report.

    But of course, if your premise is that facts are biased, then I guess you’ll see bias all over the place. It must be hard to live in the kind of world, but hey, hope it works out for you guys.

  12. Alan

    September 23, 2013 at 12:14 pm

    LSD,

    I stand corrected, your earlier comment was hardly dog whistle racism at all, it was there for all to see, and all you have succeeded in doing is confirm it. I understand many in your team have an issue with a person of color being in the White House (it is called the White House after all…), but this is 2013, not 1963.

    And please… socialism??? You (and the rest of the interns) throw this around constantly, yet you have absolutely no concept, or experience, of your so called path to socialism. It’s yet more bat-**** , tin-foil hat wearing, foaming at the mouth, crazy talk.

  13. LayintheSmakDown

    September 23, 2013 at 4:47 pm

    Alan,
    If Obamacare (Barry’s signature “accomplishment) is not a step toward Socialism…what is it? Harry Reid himself has admitted that is his goal as expressed just last month. Once the government controls your healthcare they are controlling the means of production through rationing etc. That is just one example, just from Barry’s reign. There are plenty of other examples where government is essentially controlling the means of production by burdensome regulation. Just look at our financial markets as another example….too big to fail is a socialist concept.

    http://www.lasvegassun.com/news/2013/aug/10/reid-says-obamacare-just-step-toward-eventual-sing/

    Socialism defined:
    Socialism is an economic system characterised by social ownership of the means of production and co-operative management of the economy

  14. LayintheSmakDown

    September 23, 2013 at 4:49 pm

    Oh and Alan, your little ad-hominem straw man of “racism” has no bearing on me. You need to come up with something based in fact rather than just flipping that card out with no basis….that just rolls off my back and lets me know I am doing my job.

  15. Allan Freyer

    September 23, 2013 at 4:52 pm

    LSD–no comments on the factual nature of NC’s declining employment?

  16. LayintheSmakDown

    September 25, 2013 at 10:48 am

    Yes, the “facts” as presented here are that down is actually up, unless it comes to touting what Barry is doing up there in DC where the MSM touts all the decreases in UE rate with hosannahs. Liberal hysteria at it’s best. We know from the devastating decisions made from the Obama administration on things like tax increases, Obamacare, etc. are going to slow job growth for a long long time. Companies are not going to begin hiring, and people are going to drop out of the market and thus the UE rate will go down. So these are not “new” facts isolated to NC that you can blame on the GOP.

  17. Jasmine

    September 25, 2013 at 3:39 pm

    The right is mixing up their arguments again. This post is about jobs. It was meant to bring attention to the fact that unemployment rate dropping by a few points does not necessarily mean employment rates rising as some might be inclined to think. The unemployment rate only measures the number of people who are unemployed AND simulataneously searching for work.

    Sometimes you can have people quit searching for work so the unemployment rate can drop even those these individuals are still unemployed. Or more importantly, as this blog emphasizes the unemployment rate can drop because a desperate and hungry person accepts one or two low paying temporary or parttime jobs which still leave them poor. These phenomenons can occur and still result in the social problem of underemployment in this state. The focus of this post was on the state of jobs, whether employees have quality options and definitely not some insurance debate or your notions about how making people buy insurance is somehow socialism…

  18. Jasmine

    September 25, 2013 at 3:43 pm

    The job growth problem is and always will be a problem of employers deciding to forego job creation to pocket profits instead of using extra cash to create more jobs. A problem of maximizing worker output instead of distributing work fairly when demand increases.

    And just to bring this back to why the right is confused, tax breaks do not make employers create jobs that they don’t want to create. Giving these employers extra money and freedom does not make them do things differently. To encourage job creation you either have to: a.demand it with regulations that penalize people who do not create jobs, or b. incentivize job creation by paying rewards for each job. You’d have to do these under the correct conditions as well, because all the penalizing or incentivizing wont work on businesses that are bankrupt and know nothing about profit. That being said there are plenty of businesses doing fine who do have profits yet don’t create more jobs. This is a consistent problem. Jobs suck right now because employers keep going to school to increase their value and employers are monopolizing the stakes by being picky.

    Anyway, the right has argued that they don’t believe in government or spending tax money (apparently on anything but their salaries) so I guess by that logic NC will just sit and wait allowing employers take home profits at the expense of treating workers fairly instead of like cattle.

  19. Jasmine

    September 25, 2013 at 3:45 pm

    Also, please stop trying to deflect the problem with jobs in NC, by talking about the Affordable Care Act, which is an entirely different issue. And if you want to talk about jobs in relation to insurance, at least acknowledge the immediate reality which is that insurance companies are going to have more business because more people will be purchasing plans, which means insurance companies are ultimately going to get more money and will have the opportunity to create more jobs.

    And if you really want to play psychic and predict the collapse of insurance because of ACA you need to focus on the long term angle and whether expenditures on the cost of healthcare will overcome this influx of new money from new plans and constistent monthly payments. Course thats would first assume that the data for costs that you use today is the unchanged. Either way predicting future outcomes is hard to argue since it’s all in ones imagination. Lets instead try to keep focused when we debate, preferably on the present and not on some imaginary future.

    Oh and if you’re going to protest mandated health insurance you also need to complain about mandated auto insurance and you have to stop complaining about uninsured people. Pick a side already ::sighs::