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The lead editorial in Raleigh’s News & Observer this morning rightfully laments the fact that North Carolina’s economic recovery appears to be petering out while other states rebound more quickly.

In the end, however, there’s no mystery. The persistence of unemployment points to how badly the job market deteriorated and how tax cuts and spending cuts do little to restore it. North Carolina has cut taxes in a way that disproportionally benefits higher earners while expanding taxes or removing exemptions that helped middle-income and low-income earners and retirees. Tax breaks for the wealthy tend to go into savings while a tax break for lower income earners would have gone directly into the economy.

North Carolina’s cuts in state funding for education have an outsized impact on the economy. Unlike many states where local governments bear most of the cost of schools, North Carolina funds education primarily from the state level. Meanwhile, North Carolina’s refusal to expand Medicaid has cost the state’s economy billions of dollars in federal funds and reduced or blunted employment by hospitals.

There’s not much state government can do to escape the influence of the national economy. But states can do more to soften the effects of a national recession and speed the effects of a recovery. North Carolina should spend aggressively on education, participate fully in the Affordable Care Act and focus tax breaks lower down the income scale.

That’s not being done, and the economic pain is being extended.

Meanwhile, an editorial in the Charlotte Observer offers a glimmer of hope on this front in the form of additional confirmation from the McCrory administration that it has finally recognized one of its biggest blunders when it comes to pumping dollars into the state’s economy — the failure to expand Medicaid:

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News

North Carolina’s unemployment rate shot up in August, as the state’s labor force continues to shrink.

The state had 6.8 percent of its labor force actively looking for jobs in August, an increase from 6.5 percent the prior month, according to the monthly jobs report released by the N.C. Department of Commerce’s Labor and Economic Analysis Division.

August’s unemployment, however, is still a big drop from the 8 percent unemployment rate North Carolina experienced a year ago, in August 2013.

The jobs report (click here to read) also show that the number of employed workers dropped by 28,666 from the prior month to 4.34 million while the state’s overall labor force (which consists of those in jobs and those looking for jobs) dropped by nearly 20,000 to 4,66 million in a month’s time.

Unemployed workers increased by more than 10,000 from July to August, but the 314,962 people looking for work in August. That’s down from a year earlier, when 372,467 North Carolinians were out of work. Read More

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North Carolina had 20,000 fewer people working in July than the previous month, as the state’s unemployment ticked up slightly to 6.5 percent.

The July jobs report that came out Monday morning (click here to read) puts the state’s unemployment rate at 6.5 percent, much lower than the 8.1 percent unemployment the state experienced a year ago, in July 2013.

The national unemployment rate is 6.2 percent.

July’s unemployment rate in North Carolina was an uptick from recent months, when the unemployment rate dipped as low as 6.2 percent in April.

North Carolina has seen its labor pool shrink steadily as it has emerged from the recession, and there were 19,848 fewer people receiving paychecks in July than there were in June.

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June’s jobs numbers are out for North Carolina, showing that the state has held on to its unemployment rate of 6.4 percent for the second straight month.

Jobs-buttonThe national unemployment rate was 6.1 percent for June.

The North Carolina numbers for June released by N.C. Commerce Department show a much lower unemployment rate than a year ago, when unemployment was at 8.3 percent and one of the highest rates in the nation.

This month’s job report (click here to read) also shows the state’s labor pool is still shrinking, with 8,577 less people working in June than May.

Over the last year, the state’s labor force has shrunk by nearly 12,000, while the ranks of unemployed dropped by about 90,000 people, according to North Carolina job numbers.

That difference (a shrinking labor pool corresponding with a much larger drop in the numbers of the unemployed) has lead some economists to attribute North Carolina’s drop in its official unemployment rate not to a healthy economy, but to large numbers of long-term unemployed people dropping out of the workforce completely after last year’s cuts to unemployment benefits.

“There is zero evidence that cutting unemployment benefits in North Carolina did anything to spur job growth,” wrote Washington-based economist Dean Baker in an editorial in the News & Observer earlier this month. “There is much evidence that it led those who saw their benefits end to give up looking for work and to drop out of the labor force.

Read more here: http://www.newsobserver.com/2014/07/11/4000035/zero-evidence-that-benefit-cuts.html#storylink=cp
Read more here: http://www.newsobserver.com/2014/02/13/3619704/benefit-cuts-pushed-people-out.html#storylink=cpy

Gov. Pat McCrory and state legislative leaders disagree, and say those changes to the unemployment system and North Carolina’s subsequent rejection of federally-funded long-term unemployment help has put North Carolina in a better economic position.

“Yes, there are some people who probably took jobs they didn’t want instead of staying on unemployment,” McCrory said earlier this week in an interview with Charlotte’s WFAE radio program (discussion begins at 35:00).

“By the way, in my career, I’ve taken jobs that I don’t want,” McCrory said.  He added, “but it gets you in the door, it gets you working and it gets you off the government payroll.”

Click here to read the entire release on North Carolina’s jobs report for June.

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Dean BakerIn case you missed it, be sure to check out the latest from one of the nation’s sharpest economists, Dr. Dean Baker on the one-year anniversary of North Carolina’s harshest-in-the-nation cuts to unemployment insurance. In a post that originally appeared on the website of Baker’s Center for Economic and Policy Research, Baker specifically takes one of North Carolina’s right-wing think tank denizens to task for his recent column in the Wall Street Journal celebrating the cuts.

As Baker notes, the local pundit is simply and plainly wrong in his contention that the cuts are responsible for a job boom in the state — or that such a boom is even occurring: Read More