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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.

Commentary

Be sure to check out the Sunday edition of Raleigh’s News & Observer for an excellent column by NC Budget and Tax Center economist Patrick McHugh: “Hold the applause for NC’s sputtering economic recovery.” As Patrick notes:

“The worst of the Great Recession is in the rearview mirror, but the recovery has left far too many people, families and communities worse off. When you take a sober look at North Carolina’s economic reality, the breathless self-congratulations ring a bit hollow. An alarming pattern has emerged: Economic growth is not producing broad prosperity, which is trouble for everyone….

We’ve also replaced a lot of middle-class careers with low-paying, dead-end jobs. Thousands of jobs have been lost in industries that were the bedrock of middle-class North Carolina for generations, particularly manufacturing and construction. These were jobs where hard work brought livable wages and opportunities for advancement, jobs that could support a family, and jobs that offered a piece of the American Dream.

At the same time, we’ve seen an explosion in low-wage service jobs with few opportunities to move up. The average wage in industries that have grown since 2007 – like hotels and restaurants – is almost $10,000 less than in industries that have declined. When growth doesn’t create good-paying jobs, the lack of prosperity reverberates through the entire economy as people stop going out to eat, buying houses, getting new cars and scale back in a host of other ways….

Leaders in Raleigh need to be constantly reminded that we cannot accept growth without broad prosperity. Too many people are out of work, too many paychecks are coming up short and too many communities are being left out of the recovery.

We have neglected the investments needed to provide our children a 21st century education and our working men and women skills training; to build a transportation system that can move at the speed of business; to help small businesses withstand the competitive pressure of the modern market. This lack of investment has blunted the recovery and left the deepest problems with North Carolina’s economy unaddressed.

Instead of taking pride in finally escaping the recession, we should be focused on building a future that North Carolina can really be proud of.”

Read the entire op-ed by clicking here.

Commentary

If you’re an unemployed or underemployed North Carolinian trying to get by in a community that’s never recovered from the Great Recession, take heart: things are actually just ducky according to conservative think tanks — no matter what your eyes and bank account tell you.

For “confirmation” check out this morning’s Locke Foundation missive from the group’s former director: “Job Growth Sizzled Last Year.” The column is just the latest in an ceaseless series of articles designed to spin the situation in North Carolina and convince people that two obvious things are not true: a) The state economy continues to struggle to generate good jobs to replace the ones lost in the Great Recession and b) the North Carolina recovery that has occurred is mostly just a reflection of national trends.

Happily, some analysts and experts aren’t just trying to cover up for the destructive and counter-productive policies of the McCrory administration and the General Assembly (which, together, have about as much to do with the limited good news that has taken place in the state as they do with the price of tea in China).

Patrick McHugh of the Budget and Tax Center, for instance, explained what’s really going on in the North Carolina economy Monday in this new report: “Growth Without Prosperity.” This is from the release that accompanied the report:

“The worst of the Great Recession is behind us, but the damage lingers, weighing down communities and families across North Carolina. We are now seven years removed from the financial crisis of 2008, but in North Carolina wages are down, job creation is lagging, and many communities are still stuck in recession. Read More

Commentary

Budget and Tax Center economist Patrick McHugh is out with a powerful new report entitled “Growth Without Prosperity: Seven years After the Great Recession Started, Recovery Still Eludes North Carolina.” This is from the release that accompanied the report:

The worst of the Great Recession is behind us, but the damage lingers, weighing down communities and families across North Carolina. We are now seven years removed from the financial crisis of 2008, but in North Carolina wages are down, job creation is lagging, and many communities are still stuck in recession.

Given all of the positive headlines lately, it’s easy to get the impression that the recovery is in full swing. Last year was the best since the financial crisis, with North Carolina and the nation finally getting back to the number of jobs that existed before the recession. The unemployment rate has also been dropping since the bottom of the Great Recession in 2009. However, these positive trends do not tell the whole story, particularly in North Carolina.

There are still not enough jobs for everyone who wants to work in North Carolina, but that’s far from the only problem. Simply put, North Carolina’s economy is not working for everyone:

Growth without prosperity: Economic output has rebounded nicely since the worst days of the recession, but it is not translating into larger paychecks for many North Carolinians. Adjusting for inflation, gross state product—which measures the value of all goods and services sold—is up 18.5% compared to 2007, but wages are actually down slightly. Read More

News

srs-unemployment3While it is positive news that fewer North Carolinians were unemployed in 2014 than in 2013, the reality is that we are still far from pre-recession employment rates.

As the Budget and Tax Center pointed out a in a release today:

Despite the decline in metro area unemployment year over year, there were still more unemployed North Carolinians in nearly all metro areas in December 2014 than there were in December 2007.

The latest data from the BTC’s County Labor Market Watch and Recession Watch shows that:

Many counties were better off in December 2007 than December 2014. There are still 24 North Carolina counties with unemployment rates higher than what they had in December 2007. There are 60 counties that had more unemployed workers in December 2014 than they did in December 2007, and 72 counties had fewer people in the labor force this past December than in December 2007.

Based on the data, slightly over half of North Carolina counties have an unemployment rate that is higher than the statewide 5.5 percent unemployment rate. Graham County at 12.3 percent has the highest unemployment rate in the state. These numbers are evidence that while the employment situation is improving in some counties, others are clearly not getting the help they need to recover from the recession.

“Any approach to badly needed economic development must consider this uneven recovery,” said Alexandra Forter Sirota, director of the BTC. “Lawmakers must pursue tools that deliver targeted support to grow opportunity in communities that continue to struggle now seven years after the start of the Great Recession.”