Prosperity Watch Issue 43, No. 1: North Carolina must continue above average performance in race to recovery for all groups

The improvement in the state’s unemployment rate may appear to signal a strong economic recovery but several factors point to the problems inherent in that assessment.  The drop in the unemployment rate can occur when the labor force shrinks, a trend that demonstrates a lack of an adequate level of jobs available and frustration for jobless workers. North Carolina’s unemployment rate, despite declining, still remains 1.7 percentage points above where it was in December 2007, signaling that more progress is needed for all those who want to work to find it.

The state unemployment rate masks the different unemployment rates experienced by subgroups in the state’s population. New data released by the Economic Policy Institute on a quarterly basis demonstrates that, once again, employment opportunities remain hard to come by across the country, particularly for African-Americans and Latinos. North Carolina performs better relative to other states in terms of the employment opportunities for all racial and ethnic groups (where data is available). Yet barriers persist within the state for African-Americans and Latinos relative to whites.

In North Carolina, the unemployment rate for African-Americans and Latinos remains 2.2 percentage points and 1.7 percentage points above pre-recession levels, respectively. North Carolina ranks 11th for the smallest percentage increase in the African-American unemployment rate. For those states with data on Latino unemployment, North Carolina ranks 10th for the smallest percentage increase in that group’s unemployment rate. North Carolina’s percentage change in unemployment for African-Americans over the period is below the national average but above for Latinos.

African-Americans in North Carolina are doing better than the national average. Yet the change in the unemployment rate since the recession began for this group is nearly twice that for whites in the state who saw their unemployment rate increase by just 1.4 percentage points above pre-recession levels. Moreover, the unemployment rate for African-Americans has lowered to its pre-recession levels in Ohio and South Carolina. Pre-recession unemployment rates have been reached for Latinos in Georgia and Colorado, signaling that other Southern states have made greater progress than NC in eliminating barriers for all groups.

NC unemployment rates remain most elevated for workers of color
Percentage point change in unemployment rate 2007 4Q to 2014 3Q

Several factors are driving the difference in unemployment rates by groups. One already detailed previously in this space is the greater labor force resiliency for African-Americans that has meant more unemployed workers remained in the labor force looking for work. The higher levels of unemployment and greater job loss in communities that have majority populations of color is another barrier to improving access to employment opportunities. The variation in labor market improvement by racial and ethnic group represents a significant challenge to the sustainability of the recovery given the growing share of these groups in the state’s labor force and to the ability of the overall state economy to show true improvement.

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