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NC Budget and Tax Center

Last week, the folks at five thirty eight, a non-partisan website dedicated to statistically robust analyses of social, political and economic phenomena led by Nate Silver, released an analysis of claims that unemployment insurance cuts at the national level have been good for the country’s economy and jobless workers.

The claims sound eerily familiar to those in North Carolina of a Carolina Comeback. But similar to those claims, the folks at five thirty eight find these national claims to lack support from available evidence.

First from their findings specific to those who have lost unemployment benefits: “Of the roughly 1.3 million Americans whose benefits disappeared with the end of the program, only about a quarter had found jobs as of March, about the same success rate as when the program was still in effect; roughly another quarter had given up searching.”

Second, jobless workers, particularly the long-term unemployed, are not moving to employment. From the article: “Only about 10 percent of the long-term unemployed find jobs each month, a metric known as the job-finding rate. Among those unemployed six months or less, the finding rate is nearly 25 percent….”

Cutting off unemployment benefits have not delivered improved job prospects for the hundreds of thousands still seeking work across the country and in North Carolina. A different approach is needed.

Missing Workers, NC Budget and Tax Center

Last week the Bureau of Labor Statistics and the NC Division of Employment Security released data on the state of North Carolina’s labor market. While the decline in the official unemployment rate may have generated headlines, the reality is the labor market continues to provide too few job opportunities for those who seek work.

The number of missing workers, which estimates who would be in the labor market if job opportunities were stronger, provides additional insight into the state of North Carolina’s labor market.  As of April 2014, there are an estimated 242,164 missing workers in North Carolina.  Again, these are North Carolinians who would be seeking work if jobs were available. If these workers were included in the official unemployment rate that rate would be nearly twice the official unemployment rate: 11.4 percent rather than 6.2 percent.

BTC - Missing Workers April 2014

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The April employment numbers released Friday show that North Carolina’s unemployment rate is continuing to drop, with 6.2 percent of the state’s residents out of work and looking for jobs.

The drop is a full 2.2 percentage points lower than what it was last April, when 8.4 percent of the state’s labor force was looking for work.

Republican Gov. Pat McCrory, in a written statement, hailed the unemployment drop as a success, but said more progress is still needed.

“We continue to see encouraging signs in North Carolina’s economy with each month that passes,” McCrory said.

Today’s job numbers (click here to read the whole report) show that the state added 14,000 from March to April, and that the overall labor pool (which includes those on the job and those actively looking for work) also grew by about 10,000 from the previous month.

Here’s a quick glimpse of the number’s released today by state commerce department’s labor and economics division:

jobsnumbersapril

Source: N.C. Commerce Department

 

The larger meaning of jobs report data have become heated topics in policy and political circles, with sometimes competing theories about what the steady drop of unemployment in the state means.

The state’s labor pool is significantly lower (by 33,005 people) than it was a year ago, a circumstance that has led some, including the N.C. Justice Center’s Budget and Tax Center, to point out that many of the state’s long-term unemployed stopped looking for work and are not being accounted for in federal labor data. That comes after the state slashed both the length and amount of unemployment people can collect as part of an extensive overhaul of the unemployment system last year.

The state is also seeing huge disparity in different regions when it comes to unemployment, with areas surrounding the economic powerhouses of the Triangle and Charlotte showing low unemployment while more troubled areas still have counties with unemployment topping 10 percent.

Dare, Edgecombe, Graham, Hyde  Scotland and Swain counties all had unemployment rates over 10 percent in March. (Note, these numbers are not seasonally-adjusted, unlike the statewide numbers released today.)

Supporters of that unemployment reform policy, including McCrory and other Republican leaders, say the drop in benefits may have spurred many of the jobless to accept jobs they wouldn’t otherwise have looked at.

The Washington Post had this national perspective on the shrinking labor pool last year, finding that the contracting stems from a combination of the baby-boom generation entering into retirement, younger workers headed back to school and the long-term jobless throwing up their hands.

Here’s a great explainer from the New York Times earlier this month about how federal jobs data (which is released every month and is based on surveys) can fit a number of different narratives (economy better, economy worse, more jobs, less jobs) and all be right.

From the aptly-tilted article, “How Not to be Mislead by the Jobs Report“:

We obsess far too much on the Labor Department’s monthly jobs report.

Think about it this way: It’s the first Friday of the month, and the Labor Department has bad news. The economy has added a mere 64,000 jobs last month, a steep slowdown from 220,000 the month before. From Wall Street to Twitter, the reaction is swift and negative.

The price of oil falls, as do the prices of blue-chip stocks like General Electric. The Federal Reserve faces calls to push interest rates lower. The lead headlines in the next day’s papers talk of faltering job growth.

But what if all the worries were based on nothing more than random statistical noise? What if the apparent decline in job growth came from the inherent volatility of surveys that rely on samples, like the survey that produces the Labor Department’s monthly employment estimate?

 

You can read more here.

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jobseconomyThis is new from the experts at the N.C. Budget and Tax Center:

Labor force decline still driving drop in unemployment for many metro areas

RALEIGH (April 29, 2014) — Despite falling unemployment rates, most of North Carolina’s metro areas are still waiting for meaningful job creation, according to new jobless numbers released by the Division of Employment Security this morning. Nine out of the state’s 14 metros saw weaker job creation over the last year than they did over the same period in previous years. In 7 of 14 of the state’s metro areas, the drop in the unemployment rate between March 2013 and March 2014 was driven by a shrinking labor force and not by large-scale employment growth. Read More

NC Budget and Tax Center

Another month, another underwhelming jobs report for North Carolina. The Tar Heel state created fewer jobs and saw a smaller percentage of unemployed workers find employment than the rest of the nation over the last year, according to the February jobs report released by Division of Employment Security this morning.

The numbers tell a clear story: 2013 was a rough year for the state’s labor market. While the state saw its payrolls expand by 65,000 new jobs (1.6 percent) since March 2013, this represents slower job growth than the 1.7 percent rate of job creation in the nation as a whole. Even more troubling, this represents a reversal from the previous year (March 2012 to March 2013), during which North Carolina outpaced the nation in job creation 1.6 percent to 1.5 percent.

Not only did North Carolina underperform the rest of the nation over the last year, the state’s performance in 2013 stacks up poorly compared to its performance in previous years. Over the past year (March 2013-2014), the state created 200 fewer jobs than it did over the same period the year before (March 2012-2013), and only created 100 more jobs than were created from March 2011-2012—hardly signs of an increasing job creation trajectory.

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