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In remarks at Monday’s economic forecast forum, a number of speakers sought to take credit for enacting policies in 2013 that they believe have contributed to big drops in the unemployment rate since last January, an idea that has been repeated in recent business news reports. Unfortunately, as much as we all want to make progress reducing North Carolina’s persistent joblessness, we’re still waiting for a jobs recovery to actually happen.

The unfortunate reality is that the unemployment rate may have fallen due to mathematical quirk in how it’s calculated, but unemployment itself still remains high due to anemic job creation and a contracting labor force.

Perhaps the most problematic claim involves the mistaken notion that the General Assembly’s deep cuts to unemployment benefits that took effect in June somehow spurred an impressive reduction in unemployment in the following months. According to this view, the “employment effect” associated with cutting unemployment benefits forces workers to find jobs that they otherwise would not have accepted because the wages of those new jobs pay less than what their old jobs paid. And since the unemployment rate has gone down, proponents of these cuts have argued that the employment effect must have worked in just this way.

There is a serious problem with this idea—it assumes that unemployed workers who lost their benefits in June went out and found jobs in August through November, a claim that just doesn’t bear up under serious scrutiny.

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Traditionally, official press releases issued from the offices of high public officials carry some imprimatur of solemnity and seriousness. While one realizes at some level that they’re ultimately just a way of the official in question to communicate with the media and the public, the releases still typically come with (and convey) an air of officialdom — i.e. that they are public documents issued by the public official in his or her official government capacity.

With this as background, check out a couple of recent “press releases” from Gov. Pat McCrory that sound and look more like dashed-off blog posts.

On Tuesday of this week, the Governor of North Carolina issued an official press release that was simply a reprinted Wall Street Journal editorial about the evils of extended unemployment benefits. It even included the social media abbreviation “ICYMI” in the headline – as in “ICYMI: Wall Street Journal: How to Keep Workers Unemployed.”

Then, just yesterday, the Governor issued another “official” press release. It said the following: Read More

In recent months, we’ve been hearing a lot from legislative leaders about how much the state’s economy has “improved” over the past couple years. Unsurprisingly, it turns out that much of this improvement never happened.

As seen in the latest issue of Prosperity Watch, North Carolina still has higher unemployment and lower shares of employed people than the national average–a trend that has remained consistent since 2011 and has actually gotten worse in 2013.  See the latest Prosperity Watch for details.

Art Pope 3Among the many topics on which Gov. McCrory has made repeated misleading statements and told downright whoppers in recent months, none has been more frequently front and center than unemployment insurance. Time and again, the Guv has claimed that the state did not take away benefits and/or that the reason for the cut off in federal emergency benefits was that it was President Obama’s fault for not granting North Carolina an exemption or allowing the GOP legislature’s changes to be “grandfathered.”

As has been reported repeatedly, however, these claims are simply false. That’s why the Guv has had to issue clarifications and retractions on more than one occasion. The simple truth is that when Congress put extended emergency benefits in place as part of the economic recovery/stimulus law back in 2009, it told states that they could only continue to access those federally-funded benefits if they didn’t cut benefits and eligibility at the state level. This is a standard congressional practice used by leaders of both parties to help make sure that federal initiatives aren’t undercut by free-riding states with no skin in the game. Federal officials repeatedly told North Carolina this and warned them not to cut benefits lest they jeopardize the state’s participation in the federal emergency program.

The state’s response: A big raspberry. Despite the plain warning (and pleas from advocates to merely delay new cuts until 2014 so as not to run afoul of federal law), legislative leaders and Gov. McCrory plunged ahead with unprecedented cuts to benefits and eligibility that were quite possibly the largest in American history. As a result, the federal government was left with no choice but to abide by the congressional mandate and cut North Carolina off July 1.

So why does McCrory keep making the bizarre claim that it was the feds who are responsible for the cuts? We got a hint as to the answer to that question yesterday when State Budget Director Art Pope made his strange appearance at a protest outside his office organized by the NAACP and others.  Read More

North Carolina Gov. Pat McCrory, in an interview aired yesterday on a Charlotte radio station, downplayed cuts to unemployment benefits caused by made this year to the state’ s unemployment insurance system.

“We didn’t take away unemployment benefits,” McCrory said on WFAE’s “Charlotte Talks” program in response to a question about cuts to the unemployment insurance system. “We didn’t extend them. We were following the existing policy.”

Audio clip from WFAE in Charlotte

The state, through legislation signed into law in February by McCrory, did cut both the length of time a person can collect unemployment (reduced from six months to a sliding scale of 12 to 20 weeks) and also cut the maximum weekly benefit from $535 to $350 a week.  The cuts were part of an extensive plan to repay more than $2.6 billion the state unemployment insurance system borrowed during the height of the recession.

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