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Business & Economy
Thu May 22, 2014
NC's Jobless Rate Drops; So Do Benefits
At first glance, there are several signs North Carolina’s job market is improving. In fact, last week, the state Commerce Department reported the jobless rate in April was down to 6.2-percent. That’s the lowest it’s been since 2008.
But some economists and advocates say unemployed workers are still facing a tough job market and less help from the state.
North Carolina’s 6.2 percent jobless rate isn’t just the lowest it’s been since the recession. It’s lower than the national rate of 6.3 percent. That also hasn’t happened for several years.
Governor Pat McCrory said, “We continue to see encouraging signs in North Carolina’s economy with each month that passes.” The governor also says there is still a lot of work to be done.
John Quinterno agrees.
“Well I mean, I think there, I think there’s truth to that. If you look at conditions, we have seen improvement in a number of labor market indicators over the past year or so.”
Quinterno is a principal with South by North Strategies in Chapel Hill, a research firm specializing in economic and social policy. He also agrees with the governor there is a LOT of work to be done.
“In many ways, we have a labor market that is not performing as well as it did before the recession. So, on many indicators, we actually are still worse off than we were in North Carolina a little over six and a quarter years ago," said Quinterno.
The state Commerce Department reports the number of people working in the state increased by 69,300 people in the past year.
But Quinterno says, compared to December 2007, when the national economy fell into recession, North Carolina is still short by tens of thousands of payroll jobs. And many of the jobs that have been created are low wage.
So what does 6.2 percent unemployment really mean in this state?
Economists, analysts and workers rights groups say one main reason the jobless rate is dropping is because the labor force is shrinking.
“We’re seeing that there are thousands of people dropping out of the labor force in North Carolina and that’s troubling," said Bill Rowe, General Counsel and Director of Advocacy for the North Carolina Justice Center.
“But probably the biggest problem is the rate does not capture the number of people who are dropping out of the labor force because they can’t find work," said Rowe. "And if you really factor that in, the unemployment rate is probably over 10 percent.”
Unemployment was on the minds of many of those who protested this week at the Moral Monday demonstration outside the legislature. Hundreds of people often chanted, "Forward together, not one step back!"
One of the speakers was James Andrews, president of the North Carolina State AFL-CIO. He recalled the new state law that overhauled unemployment. It resulted in the state not qualifying for federal emergency unemployment benefits.
“170,000 hard-working people lost their benefits during that period of time. $700 million of our tax money went to the recovery in other states, not North Carolina. Something is wrong with that," said Andrews.
Rennis Bidgood was next to speak at the rally in Raleigh.
“My name is Rennie Bidgood. But the people across the street may know me better as Couch Potato," Bidgood said, recalling an article where some lawmakers referred to the unemployed in that way.
Bidgood lost her full-time job as a technical writer in Research Triangle Park back in 2011. She was one of the 170,000 people in North Carolina who did not get federal extended benefits. Bidgood says she’s struggled longer than needed because of new state policies.
“No one on unemployment benefits wants to stay on unemployment benefits! Because the longer we stay on unemployment benefits, the more we drain our American Dream!" Bidgood screamed. "We drain our savings!”
So, as the state jobless rate goes down, so does the number of weeks of benefits. The idea is a lower jobless rate means it’s easier to find a job. The change applies to jobless workers no matter where they live – in Chatham County where the unemployment rate is 4.6 percent or Cherokee County, where it’s 8.6 percent.
State Representative Julia Howard co-chairs the Joint Legislative Oversight Committee on unemployment insurance.
“Unfortunately federal law will not let us take the whole state and divide out by 100 counties and do something different for each county. They won’t allow that so we have to take the state as a whole," said Howard.
People who are currently receiving benefits are eligible for up to 20 weeks, it used to be 26 weeks. Now, with an unemployment rate of between 6 and 6.5 percent, workers who lose their jobs after July 1, 2014 can expect a maximum of 14 weeks of unemployment benefits.
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