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Commentary, NC Budget and Tax Center

Talking about a single North Carolina “economy” doesn’t make very much sense. Whenever new labor market data comes out, there is talk about how the North Carolina economy , or the US economy, or the global economy, are doing. The macroeconomic perspective is important, and talking in broad terms is convenient, but the economy is not some monolithic abstraction, a disembodied thing that we can’t really see. Even in an interconnected global market, the day-to-day economies that human beings experience are local. The economies we see impacting our neighborhood, our circle of friends, our family, and our wallet, those are the economies that we live in.

2014 was a very mixed economic bag for local economies in North Carolina. As will be shown below, parts of North Carolina are growing quite nicely, but it is still very tough sledding in a lot of communities across the State.

2014 End of Year Charts_uneven recovery

Location, location, location warns the old business adage. That’s great if you’re in a hot spot, but as the map above shows, most of North Carolina is not booming. While the November data (see here for the latest county data) are not updated for this map, the fundamental story has not changed. On the one end, counties that are in or around metro centers have largely surpassed pre-recession levels of employment, with some counties posting 10% or greater gains. That sounds like healthy growth, and it is. On the other end, however, many counties have not experienced what anyone would consider a return to robust economic performance. Sixty of North Carolina’s 100 counties have not gotten back to their pre-recession levels of employment, and in fifteen counties current employment is more than 10 percent lower than it was in 2007.

One could argue that some of the shifts seen here are simply the result of increasing urbanization, a trend that goes back well before the Great Recession. As more and more working age people move toward urban centers, the employment level in many rural areas should naturally drop. However, the losses in employment that many counties have experience cannot be entirely explained by urban migration. Based on data from the North Carolina State Demographer, there are only 23 counties in North Carolina where the change in employment between 2007 and 2014 outpaced the change working age residents. Put another way, the growth of employment has not kept up with working age population in more than three-quarters of the counties in North Carolina.

2014 End of Year Charts_barriers for communities of color

Geography is not the only knife dicing up the North Carolina economy. As can be seen above, the recovery is less complete in communities of color around the state. Unemployment remains higher than it was before the recession for all ethnic groups, so there’s still cause for concern across the board. However, unemployment remains even more elevated for black and Hispanic North Carolinians. The unemployment rate for African-Americans remains 2.2 percentage points above pre-recession levels and for Latinos   1.7 percentage points compared to 2.7 and 1.3 percentage points nationally for both groups respectively.  While African-Americans in North Carolina are doing better than the national average, the change in the unemployment rate for this group is nearly twice that for whites in the state who saw their unemployment rate increase by just 1.4 percentage points above pre-recession levels.

Of course this is hardly an exhaustive analysis of the geographic and social lines that shape the economic landscape of North Carolina. But when we start to look more closely at specific local economies, we see very different stories about different parts of our state. While we celebrate the economic bright spots, we can’t let struggling North Carolina communities fall into shadow.

News

Many North Carolina counties are seeing steady drops in their unemployment rates, while a fifth of the counties saw unemployment rates climb in November from the prior month, according to county-level jobs numbers released by the N.C. Commerce Department’s Labor and Economics Division.

This month’s results (scroll down to see county rankings) show that all 100 counties lowered their unemployment rates over the last year. Two counties — Graham and Scotland – had unemployment rates over 10 percent, while

But there’s still a gap in most of the state from where local economics were before the nation’s Great Recession began in early 2008.

Two-thirds of North Carolina 100 counties in North Carolina had unemployed people now than they had in December 2007, and 67 counties also had smaller labor forces.

(The state overall had 246,318 unemployed people in November 2014, an increase of 34,482 from December 2007 levels. The labor force, however, has grown from 4.5 million in Dec. 2007 to 4.62 million in November 2014.)

This chart (which has data through Oct. 2014 and hasn’t been updated to include today’s data) from the N.C. Budget and Tax Center shows that 15 counties in the state have seen drops of higher than 10 percent of the number of people employed in counties. (Note: Both N.C. Policy Watch and the Budget and Tax Center are part of the N.C. Justice Center, an anti-poverty non-profit).

BTCemploymentchart

 

Jobs data for November 2014 shows that the state, as a whole, had 25,373 more people working now than it did a year ago. Unemployment rolls also dropped in that time period by nearly 80,000, and several economists say that gap is caused in large party by “missing workers” that exited the labor force after struggling and not finding work.

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Commentary

New from the good people at the Budget and Tax Center:

Five years into the official economic recovery, there were signs of a strengthening recovery in North Carolina albeit uneven and insufficient to deliver improved economic well-being broadly. The result is far too many North Carolinians remain without jobs or working for low-wages. Poverty levels have remained high and inequality has grown, both contributing to a less sustainable economy in the long-term. Here are 12 charts that tell the story of North Carolina’s economy in 2014.

Click here to see all twelve.

Missing Workers, NC Budget and Tax Center

This is the season of absolutes, a time for reflecting and rendering judgment. Has it been a year to remember or a year to forget? Are we on the right path, or hopelessly lost? The truth is usually somewhere in the middle, but that doesn’t make provocative copy, and so it is often ignored. While some voices in North Carolina would have you believe that we have finally put the Great Recession in the rear-view mirror, the economic damage lingers. As the two charts below show, a year of generally positive economic performance has not erased the imprint that the Recession left on North Carolina.

2014 End of Year Charts_stll not enough jobs

There is still a larger percentage of North Carolinians without employment than before the Great Recession. From the start of the millennium through 2007, more than 62% of North Carolinians had participated in the workforce each year. That rate dropped precipitously in 2008, and kept sliding until it hit a low of roughly 58% in 2011. While there have been modest gains in the last few years, the labor market in North Carolina still has not recovered sufficiently to return employment levels to where they were before the financial crisis.

2014 End of Year Charts_real unemployment high

Proponents of the “Carolina Comeback” story point to the fact that North Carolina’s headline unemployment rate has come down over the last year, so what’s the worry? The problem is that many people have such a hard time finding work that they don’t appear as “unemployed” in the official figures. A BTC analysis of labor data indicates that the real unemployment rate is twice the official level once we consider all of the people who are not currently looking for work because job opportunities are too few. To be clear, this is not a tally of people who have retired or gone back to school, but rather an estimate of what the unemployment rate would be if we include all of the people who would otherwise be expected to be in the labor force based on historic figures. Including these missing workers pushes North Carolina’s real unemployment rate to almost 13%, twice the official estimate.

The central point here is that we cannot lose sight of the work that still remains to be done. While there has been a good deal of encouraging economic news this year, there are still far too many North Carolinians for whom the recovery remains a promise unfulfilled.

Stay tuned over the next several days for a series of BTC posts that illuminate the 2014 economic landscape and the challenges that need to be addressed in 2015.

NC Budget and Tax Center

BTC - Missing Workers November 2014

The latest report on labor market conditions was released on Friday showing that despite improvements in North Carolina, there remains a long way to go to proclaim a fully recovered economy. One measure of just what remains unaddressed is the number of missing workers in the state, those workers who if job opportunities were stronger would be in the labor market looking for work.

In November 2014, there were an estimated 302,285 missing workers in North Carolina. If these workers had actually been counted in the official unemployment rate that rate would be 12.4 percent, more than twice the official rate for November of 5.8%.