- The Progressive Pulse - http://pulse.ncpolicywatch.org -

Expert explains huge masked problem with NC economy

In case you missed it over the weekend, Patrick Conway, the head of the economics Department at UNC Chapel Hill had an important op-ed in Raleigh’s News & Observer [1] about the true state of the North Carolina economy. As Conway explains, the recent rosy claims of state officials and their apologists in the right-wing think tanks  are ignoring a huge, under-reported issue: 300,000 “missing” workers who have simply evaporated from the workforce. Here’s Conway:

There’s a large disconnect in perceptions of the current state of North Carolina’s labor market.

Gov. Pat McCrory stated a positive view in a recent address in Chapel Hill: “We’ve had one of the largest drops in unemployment [rates] in the country.” His more general contention was that the state’s labor-market difficulties are “being resolved” by tough choices made by his administration.

A contrary view was voiced by a recent letter-writer who said we’re still in the midst of a terrible recession.

These views seem contradictory, but it is easy to reconcile the two. McCrory ignores the 300,000 working-age adults who have dropped out of the labor force since 2010. If we assert that they’re gone, our unemployment rate is a high but acceptable 6.8 percent. If we recognize that these are productive residents who have temporarily stopped looking for work, then our unemployment rate is a terrifying 12.4 percent.

Conway goes on to say that simply ignoring these missing workers will not solve the problem:

These missing 300,000 workers are not just people reaching retirement age. The annual increase in the number of residents aged 66 and above is only 40,000. Also, many people of retirement age find they must remain working.

We need to resolve the problem of the missing 300,000. Ignoring them or treating them as permanently retired is not satisfactory. If unemployed due to a lack of skills, a jobs-training program is appropriate. If unemployed because of refusing to leave a rural county that has lost its employment base, the governor’s business recruitment plan should be even more sharply directed to the rural counties. If unemployed because aggregate demand in the state has not yet recovered enough, accepting the expansion of Medicaid under the Affordable Care Act or participating in extended federal unemployment insurance could bring them back into employment.

Ignoring the problem will not make it go away. Waiting years for a resolution will be a loss for the state – a loss of production, a loss of income, a loss of heart.

Click here to read the entire essay [1].