Prosperity Watch Issue 21, No. 3: North Carolina's unemployment rate remains stubbornly high, while unemployed workers outnumber available job openings by 3-to-1
As policymakers consider reforms to the state’s unemployment insurance system, it is critical to address the ongoing sluggishness in North Carolina’s labor market, sluggishness driven largely by the fact that workers outnumber available job openings by almost 3-to-1. As a result, one of the central challenges facing North Carolina’s employment growth and economic recovery is the fundamental lack of open, available jobs.
Although the long-term trend of the state’s unemployment picture is moving in the right direction—the state’s unemployment rate dropped from 10.4% December 2011 to 9.2 percent in December 2012—the rate of job growth in the state still remains stubbornly listless. In fact, the state’s jobs deficit—the number of jobs that need to be created in order to replace the employment lost in the Great Recession and to keep up with the state’s 8.3 percent population growth—has continued to remain high, now standing in excess of 520,000 jobs.
Some policy makers have argued that these trends are due solely to the absence of qualified workers unable to take advantage of available openings because they lack the requisite skills.
The reality, however, is very different.
The real problem facing North Carolina’s labor market’s recovery is the fact that there are too many unemployed workers chasing too few job openings. In fact—making the safe assumption that North Carolina mirrors the rest of the South—there are almost 3 unemployed workers for every one available job opening in the state. In essence, there are just not enough open jobs to meet the needs of our unemployed workforce. While promoting a skilled workforce training certainly matters for ensuring the long-term competitiveness of North Carolina’s employment base, the immediate problem is the lack of available job openings—a challenge which no amount of training can fully address.