As this week’s edition of The Weekly Briefing made plain, state leaders remain absurdly out of touch with the economic reality on the ground in North Carolina. The following announcement from colleagues at the N.C. Justice Center highlights this problem once more

Jobless workers struggle even as Division of Employment Security announces $600 million in tax cuts to employers
Employment remains more than 4 percentage points below pre-recession levels, according to October data 

Jobless workers continue to struggle with an economy that fails to provide enough jobs and an unemployment insurance system that is ill-equipped to deliver partial wage replacement to stabilize the economy, even as North Carolina’s Division of Employment Security announced $600 million in tax cuts to employers.

Employment levels as a share of the population remains more than 4 percentage points below pre-recession levels, according to today’s announcement on labor market conditions for October 2015.

Last month’s state employment rate was 5.7 percent, the same level as one year ago. However, the number of unemployed North Carolinians has increased over that period by 11,591 jobless workers. The national unemployment rate was 5.0 percent in October, dropping by 0.7 percentage points over the year.

“North Carolina should not be issuing tax cuts for employers when we have failed to reach what are generally agreed to be safe levels for our state’s Unemployment Insurance Trust Fund,” said Alexandra Forter Sirota, Director of the Budget & Tax Center, a project of the North Carolina Justice Center. “Instead, our state policymakers need to re-balance their approach to ensure the system can deliver partial wage replacement to jobless workers and in so doing serve as a stabilizing force in the economy.”

Important trends in the October data also include:

  • The percent of North Carolinians employed is still near historic lows, and below the nation. October numbers showed 57.5 percent of North Carolinians were employed, leaving the state well below employment levels commonplace before the Great Recession. In the mid-2000s, employment levels reached a peak of about 63 percent. The percent of North Carolinians with a job remains below the national average, as it has been since the Great Recession.
  • There are still more North Carolinians out of work than before the Great Recession. There were more than 270,000 North Carolinians looking for work in October, almost 50,000 more than before the Great Recession.
  • North Carolina’s unemployment insurance system only provided temporary wage replacement to 22,545 North Carolinians. The number of jobless North Carolinians receiving unemployment insurance has dropped precipitously since 2013, ranking us 49th in the country on this measure and hindering the ability of the program to serve as a stabilizing force in the economy.

“North Carolina’s labor market is still too weak to ensure jobs are available for all those who seek employment,” Sirota said. “This affects all of us, as wages are falling short of the growth needed to boost the economy in the immediate and long-term.”

For more context on the economic choices facing North Carolina, check out the Budget & Tax Center’s weekly Prosperity Watch platform.

Commentary, News

The latest “Prosperity Watch” update from the folks at the N.C. Budget and Tax Center makes clear that if there is any kind of “Carolina Comeback,” it is pretty much bypassing our small towns:

As of September 2015, 22 of the state’s 25 smaller cities and towns known as micropolitan areas continued to have more unemployed people than before September 2007 just before the Great Recession began.

Persistent high numbers of unemployed are occurring even as the unemployment rate declines.  This rate drop masks the range of challenges in weak labor markets including insufficient job creation to meet the growing population, declining numbers in the labor force and the resulting failure of wages for the average worker to increase.

For the state’s micropolitan areas with elevated numbers of unemployed, 17 also continued to experience a lower number of employed.  Of the three areas where the number of unemployed decline, Mount Airy, Rockingham and Laurinburg, the labor force and number of employed also declined over the period.  This demonstrates that a decline in the number of unemployed alone is not sufficient indication of a healthy labor market.

In order to see improvement in the labor markets of micropolitan areas as well as the state, it is important to look for increases in the number of employed, growth or stability in the labor force AND declines in the number of unemployed.



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

NC Budget and Tax Center

The General Assembly used a few of the last hours of the 2015 session to cut back how long unemployed North Carolinians in economically distressed counties can receive food assistance. Even though this weeks’ labor market data show that 9 out of 10 counties have more out of work people than job openings, the new rule would cut unemployed people off regardless of how hard it is to find work. The change could take food off more than 100,000 tables across North Carolina, and will pull money out of already struggling local economies, a doubly bad deal.

The one-sentence provision in the ratified bill (see section 16.a) permanently prevents the state from seeking to extend food assistance for people who can’t find work in their local economies, except in times of emergency. The federal Supplemental Nutrition Assistance Program (SNAP) allows states to temporarily waive a three-month time limit for unemployed childless adults who live in areas where few jobs are available.77 waiver counties - Updated for Blog Post

Recognizing that cutting off food aid to areas where there aren’t enough jobs hurts entire local economies, North Carolina sought this waiver for 77 of our 100 counties earlier this year. If the Governor signs this measure and SB119 into law, the ban on the waiver would go into effect in July 2016. Without the modest support of SNAP (formerly known as food stamps), between 85,000 and 105,000 North Carolinians would be subject to the three month-time limit and potentially will not be able to purchase food at their local grocery stores, depressing consumer demand further and driving use of food banks already stretched to capacity. Read More


The Charlotte Business Journal reports that MillerCoors will close its brewery in Senate President Pro Tem Phil Berger’s hometown of Eden. This is from the CBJ story:

“The closure will affect 520 workers at the brewery, which opened in 1978 and is one of Rockingham County’s largest employers.

Rockingham County Manager Lance Metzger said after the company made the announcement to its employees, they were allowed to go home for the day to spend time with family.

MillerCoors expanded its Eden plant just four years ago with the addition of about 70,000 square feet of warehousing space, and at that time employed about 600 at the plant.”

Meanwhile, Senator Berger will hold a presser this afternoon at 3:00 to tout his latest austerity state budget — you know, like the last two, which were supposed to have turned North Carolina into a job-creating juggernaut. One wonders if he’ll take the opportunity to highlight the new state law (which started in the Senate) that makes unemployment insurance even harder to collect.

Meanwhile, Governor McCrory is on top of things at this critical juncture in state policy debates. His office has distributed one press release today — an announcement that the Guv and First Lady will host an “adopt a pet” event next month at the Governor’s Mansion.