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NC Budget and Tax Center

Crossposted from Prosperity Watch.

In recent months, North Carolinians have continued to hear good news about the state’s labor market.  The state’s unemployment rate for February dropped below 10% for the first time since 2009, while local unemployment rates—which are not seasonally adjusted—have dropped across 81 North Carolina’s counties since February 2011.

Despite these positive trends, however, it is clear that the state’s job gains are not occurring evenly across the state, and that some regions are experiencing a greater share of the state’s job creation than other regions.

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NC Budget and Tax Center

BTC recently released a report examining the economic consequences of the “whole budget”—taking into account both the plan’s $2.6 billion in spending cuts and its $1.6 billion in tax changes in FY2012-13—for all seven regions across the state. This blog post is one in a series detailing the results of this analysis.

Job losses over the last year have hit rural North Carolina disproportionately harder than urban areas, according to new unemployment data released by the N.C. Employment Security Commission last Friday—and worse may be coming as spending cuts in the recently passed state budget slowly phase in over the coming months.

First—the bad news about current jobless conditions in rural North Carolina:

Out of North Carolina’s 85 rural counties, 53 had unemployment rates over 10 percent in September, while only 5 out of the state’s 15 urban counties had similarly high rates. The average unemployment rate for rural counties (10.7 percent) is a full percentage point higher than the average jobless rate of 9.7 percent for urban counties. This leaves rural areas far more vulnerable to the negative economic impacts of budget-related spending cuts.

Over the past year, rural counties have seen their unemployment rates go up significantly more than their urban counterparts. Since September 2010, the rural unemployment rate jumped from 9.8 to 10.7 percent. Urban counties only saw a minimal increase, from 9.3 to 9.4 percent.

On top of high unemployment, rural North Carolina is experiencing a serious jobs deficit between the number of jobs filled in the months before the recession began in December 2007 and the number of jobs filled this September. Rural communities would need to expand their employment by 165,300 jobs simply to return to the employment levels seen before the recession in September 2007. Meanwhile, urban labor markets have recovered somewhat better—urban counties have a jobs deficit of only 111,234.

It is clear from these numbers that the labor market across the state is still struggling to recover from the recent recession, and rural communities are unquestionably suffering the most. Rural North Carolina is seeing higher unemployment rates and need to create thousands more jobs than the state’s urban counties in order to catch up to pre-recession levels.

Second—the worst is likely yet to come, as the spending and tax changes included in the recently passed state budget will hurt rural areas disproportionately harder than urban communities.

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