MEDIA RELEASE: Disappointing jobs numbers reflect weakening private sector, long-term decay in public sector employment base

RALEIGH (September 21, 2012) – Newly released job numbers from the Employment Security Commission reflect a weakening private sector, which has been exacerbated by the long-term decay in public sector employment base.

Last month, the unemployment rate increased from 9.6 percent in July to 9.7 percent. In addition, the number of employed people in North Carolina dropped by 5,800 and the labor force – the pool of prime-age workers either employed or actively seeking work – remained stagnant, having lost almost 7,000 workers since August 2011.

Even more troubling, the private sector shed more than 7,000 jobs last month, and only grew by 1% over the past year.

Historically, during most economic recoveries, public sector employment is able to cushion downturns in private sector employment. But this recession has been different—North Carolina shed almost 4,000 government jobs in the last year—almost 3,000 of which are in local government. Even more remarkably, the state has lost more 6,000 state government jobs since August 2010.

Although the new employment numbers show an 8,400 increase in government jobs from July to August of this year, including a 5,400 increase in local government employment, this improvement is likely a statistical anomaly related to the fact that many local government employees work in the school system on a ten-month payroll calendar, leaving their jobs in May and returning August.

We’ve seen a similar bump in local government employment from July to August in each of the past two years, while overall local government employment has dropped, suggesting some troubling trends.

"I wish this indicated genuine improvement, but this just looks like history repeating itself, while over the long-term, we’re shedding large numbers of public sector jobs," said Allan Freyer, a public policy analyst with the Budget and Tax Center, a project of the North Carolina Justice Center. “This is undoubtedly a disappointing jobs report that furthers shows government employee layoffs increase the number of individuals out of work and will only increase overall unemployment in the future.”

FOR MORE INFORMATION CONTACT: Allan Freyer, BTC, Public Policy Analyst, allan@ncjustice.org, 919.856.2151; Jeff Shaw, Director of Communications, jeff@ncjustice.org, 503.551.3615 (cell).

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