NC Budget and Tax Center

Unemployment much higher than official rate

North Carolina’s economy is still not creating enough job opportunities. According to the latest unemployment figures, there are more than a quarter million people actively looking for work across the state. However, the problem goes much deeper. As shown below, the unemployment rate is likely closer to 10% if we account for all of the people who have left the labor force because there are not enough job opportunities, a group commonly referred to as “missing workers”.

Missing Workers Graphic - Feb 2016

A quirk in how the official unemployment rate is calculated effectively hides many North Carolinians who would like to work. The official rate only includes people who report that they have actively applied for jobs in the past month. This means that anyone who has become so disheartened by the lack of job opportunities that they have not applied for jobs in the last few weeks do not count in the official tally. According to national statistics missing workers are very likely to become employed if there are jobs available. In essence, the official unemployment rate excludes hundreds of thousands of North Carolinians who want to work but can’t find opportunities in the current economic environment.

Ignoring missing workers can bias the policy discussion toward complacency and inappropriate satisfaction. It is vital that elected leaders honestly confront the fact that North Carolina still has an unemployment problem.

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