Prosperity Watch Issue 35, No. 4: Labor force declined across 89 counties in North Carolina last year

A growing labor force is essential to ensuring a robust and long-term economic recovery from the Great Recession. Unfortunately, the state’s labor force saw unprecedented decline over the last year, shedding more than 60,000 workers since January 2013. Even more troubling, however, is the fact that the state’s rural areas have clearly borne the brunt of the shrinking labor force.

The labor force is the pool of workers between the ages of 16 and 65 who are either employed, or unemployed and looking or work. Typically, the labor force falls during economic recessions, as unemployed workers fail to find jobs and give up looking for work, and rises again during economic recovery, as new people enter the workforce and jobs become more plentiful. When large numbers of workers begin dropping out of the labor force after a recession is over, it usually means that there are just not enough job openings to meet the needs of unemployed workers.

At a time when there is just one available job opening for every three unemployed workers in North Carolina, it is not surprising that the state’s labor force experienced historic decline over the last year, since January 2013. But as the following figure makes clear, changes in the labor force have been uneven across the state—while 89 out of 100 counties saw their workforce decline over this period, the biggest drops were experienced by rural counties. Eastern North Carolina, in particular, appears particularly hard hit, with 15 counties experiencing a labor force contraction of more than 5 percent.

 

At the same time, the state’s urban centers saw minimal losses or even outright growth in their labor forces, more evidence that metro North Carolina is recovering much faster from the recent recession than rural North Carolina. In fact, two of the counties with the most positive labor force trends—Mecklenburg and Wake—are at the center of the two metro areas that account for the overwhelming majority of the state’s overall employment growth.

In order to address labor force decline in rural North Carolina, the state’s policy makers must address the shortage of available job opportunities by targeting economic development efforts to those industries most likely to grow and pay decent wages.  It will also be necessary to ensure that the workers in these counties have access to the critical job training services they need to find employment in modern, skill-intensive industries and other supports to work.

 

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