Apologists in the right-wing think tanks continue to do their best to cherry pick and spin the tale of a “Carolina Comeback.” Pretty soon there will be a release from the folks in one of the Pope-funded groups celebrating that North Carolina has the seventh fastest growth rate among states whose names include two “n’s during months with between seven and nine letters in their name.

But when it comes to the reality on the ground for real people, the data surrounding the North Carolina economy remain extremely sobering. NC Justice Center economist Patrick McHugh explains in this new release:

Unemployment declines sharply across the U.S. but grows in North Carolina

October 20, 2015 — Economic growth has reduced the number of unemployed across the United States, but such growth doesn’t seem to be happening in North Carolina.

September labor market data released this morning showed a 14 percent decline in the number of people looking for work over the last year, while the ranks of the unemployed in North Carolina grew over the same period.

“We’re creating jobs, but it’s not enough to actually get everyone back to work,” said Patrick McHugh, economic analyst with the Budget & Tax Center, a project of the NC Justice Center. “With so many people out of work, there’s less pressure on employers to raise pay, which is part of why wages in North Carolina are falling further behind the nation.” Read More


EconomyProgressives have lots of good reasons to wish that President Obama and the 2009-10 Congress has taken an even more aggressive approach in responding to the Great Recession. More stimulus spending and a more aggressive push to reform giant financial institutions would have undoubtedly have helped things get better faster — especially in places like North Carolina.

That said, for all the imperfections of their approach, it’s absolutely clear that the economy is much better off today than it would have been without it (and exponentially better off than it would have been had the U.S. followed the do-nothing, “cuts first” approach promoted by conservatives). For confirmation of this reality check out this new report from two of the nation’s top economists. Their central finding: the federal government’s responses were a resounding success.

Bob Greenstein of the Center on Budget and Policy Priorities summarized their findings in this recent post:

In a major new paper for CBPP’s Policy Futures initiative, Alan Blinder, former Federal Reserve Vice Chairman, and Mark Zandi, chief economist of Moody’s Analytics, explain that “the massive and multifaceted policy responses to the financial crisis and Great Recession — ranging from traditional fiscal stimulus to tools that policymakers invented on the fly — dramatically reduced the severity and length of the meltdown that began in 2008; its effects on jobs, unemployment, and budget deficits; and its lasting impact on today’s economy.”

Without the policy responses of late 2008 and early 2009, Blinder and Zandi estimate that:

  • The peak-to-trough decline in real gross domestic product (GDP), which was barely over 4 percent, would have been close to a stunning 14 percent.
  • The economy would have contracted for more than three years, more than twice as long as it did.
  • More than 17 million jobs would have been lost, about twice the actual number.
  • Unemployment would have peaked at just under 16 percent, rather than the actual 10 percent.
  • The budget deficit would have grown to more than 20 percent of GDP, about double its actual peak of 10 percent, topping off at $2.8 trillion in fiscal 2011.
  • Today’s economy would be far weaker than it is — with real GDP in the second quarter of 2015 about $800 billion lower than its actual level, 3.6 million fewer jobs, and unemployment at a still-dizzying 7.6 percent.

This landmark paper is especially important because Read More


New from our colleagues at the Budget and Tax Center:

Much of North Carolina has still not recovered from the Great Recession, according to the latest employment data for May.

Roughly two-thirds of North Carolina’s counties have fewer people working today than before the recession, and almost a quarter of the counties in North Carolina saw employment decline since May of 2014, a distressing sign given that it comes amidst generally strong national growth.

“The picture in many small towns and rural communities is not good,” said Patrick McHugh, Economic Analyst for the Budget & Tax Center, a project of the NC Justice Center. “Even in some cities that are largely seen as doing better, wages have not kept up with inflation over the last seven years.”

Notable data from the labor market release include:

  • 88 of North Carolina’s 100 counties have more people looking for work today than before the Great Recession.
  • 64 of North Carolina’s 100 counties have not gotten back to pre-recession levels of employment.
  • 14 of North Carolina’s 15 metropolitan areas still have more people looking for work than before the recession.
  • Adjusting for inflation, only metropolitan areas (Charlotte, Durham-Chapel Hill, Greenville, New Bern, and Wilmington) have seen better than 4 percent growth in wages over the last year.
  • Wages have not kept up with inflation in eight of North Carolina’s 15 metropolitan areas.

“The current period of economic growth is not creating enough jobs in many communities and most workers are not seeing their paychecks grow,” McHugh said. “We’re doing better than a few years ago, but this economy still isn’t working for a lot of working North Carolina.”

The Budget and Tax Center provides summaries of each county’s current labor market data, and how each county has fared since the start of the recession.


If you want to understand why North Carolina continues to struggle to fund the basic public services that provide a framework for a middle class society, check out the following graphic. As it demonstrates, even with the much ballyhooed bumps in spending contained in the House budget proposal, the state would still be spending less than it did before the Great Recession — a point at which public investments were already anemic in many critical areas.  And, of course, inadequate as it is, the House proposal is already being dismissed by members of the Senate and their Tea Partying allies as overly generous. The bottom line message from the power-that-be for their fellow North Carolinians : The pain will continue until morale improves.

House budget

NC Budget and Tax Center

For all of the positive growth numbers touted at the statewide level in the last year, the recovery ranges from partial to virtually nonexistent in many parts of the state. The headline unemployment rate dropped for most counties between February 2014 and this year, but unfortunately that is not a sign that all in well. As can be seen when you look at the current labor market conditions and how counties stack up to where they were before the recession, there are many communities where employment is still below pre-recession levels, some communities that actually lost jobs during the last year, and people looking for work outnumber job openings in most counties.

Most counties have not returned to pre-recession levels of employment. While the last few years have seen the state make some good economic strides as the national economy has continued to improve, it has not done enough to get most communities back to the level of vitality that existed before the Great recession. The majority of counties in North Carolina (70 out of 100), had fewer jobs in February 2015 than they did in 2007. In fact, the unemployment rate is still higher now than it was in 2007 in more than 80 counties across the state.

Unemployed people outnumber job openings in almost every county. Only 8 counties in North Carolina have at least as many job openings as unemployed people. Many counties have 2 or 3 unemployed people for every job opening, and in some counties there are as many as 5 or 6 unemployed people competing for every job. The number of people who are looking for work did come down in most counties from February 2014 through this year, but there are still far more people looking for work than there are jobs. In fact, roughly three-quarters of the counties had more people looking for work in February of this year than they did in 2007. There are still too few jobs for those who want to work which not impacts jobless workers but everyone as employers aren’t compelled to provide wage increases to keep or attract talent.

Many counties took a step back over the last year. While it is cause for pause that most counties have not returned to pre-recession levels of employment, the fact that almost half of the counties (47) lost employment from February of 2014 to February of 2015 is cause for a full-on double-take. 2014 was the strongest year for job creation since the start of the Great Recession, yet nearly half of the counties lost jobs during that time. That’s an extremely alarming sign. It is natural to expect some counties to grow faster than others, but a truly strong growth period should not be leaving so much of the state worse off.

All told, the February county labor market data show that North Carolina is not uniformly on the road to prosperity. There are pockets of very strong growth in and around the major metropolitan areas, but the labor market outside of the urban centers is much weaker. As the General Assembly talks about another round of tax cuts, and spending more on incentives, remember that these have been the proposed answers for several years, and they have not delivered the goods for many communities in our state.