MEDIA RELEASE: The Greater the Fall, the Tougher the Climb — State employment fell faster, farther in Great Recession than in 1981, 1990 and 2001 recessions and is struggling to recover

RALEIGH (May 31, 2012) – Despite improvements in North Carolina’s unemployment rate in recent months, the state’s labor market continues to struggle, a new report says, as large numbers of workers continue to face chronic unemployment due to the fundamental absence of available job opportunities.
 
During the Great Recession, the state’s employment rate fell faster and farther than in recessions in 1981, 1990, and 2001, and as a result, the state’s labor market has taken longer to recover, leaving more workers unemployed for longer periods of time, according to a report released this morning by the Budget and Tax Center, a project of the NC Justice Center. The lagging recovery is largely a result of a pre-recession labor force concentrated in sectors that experienced the worst job losses during the recession, the report said.
 
By this point in previous recoveries, the report said, North Carolina’s job losses had been replaced and the state’s economy experienced significant positive employment growth. In April, North Carolina’s economy entered the 52nd month since the beginning of the Great Recession in December 2007. At the 52nd month after the start of previous recessions in 1985, 1994 and 2005, the state’s unemployment rate stood at 5.4 percent or lower, while the state currently faces a job deficit of more than 532,000 jobs, and the unemployment rate rests at 9.1 percent.
 
The most commonly used measure of unemployment generally ignores discouraged workers who have dropped out of the labor force, the report said, meaning the difference in unemployment rates is that much greater. The percentage of the state’s working-age population currently employed is a better measure of the actual jobs picture. While the percentage of North Carolinians employed never dropped below 62 percent in 1990 and 2001, the employment-to-population ratio fell below 57 percent in 2009, where it has largely remained for the 34 months since the end of the recession.
 
North Carolina’s workforce used to rely heavily on jobs in industries that have suffered the most from the recession, the report said, such as manufacturing and construction. This rendered the state especially vulnerable when the recession disproportionately affected the “legacy industries” – textile, tobacco, and furniture manufacturing. Having lost these pre-recession pillars of its employment base, North Carolina now faces the challenge of shifting its workforce toward industries that are more likely to experience long-term growth and stability.
 
As the General Assembly reconvenes for its short session and grapple with the challenges of high unemployment and an anemic economic recovery, North Carolina’s officials must recognize the reality facing the state’s labor market the report said.
 
“The state’s employment fell farther in the Great Recession than in any recession in 30 years, and pre‐recession specialization in vulnerable industries for the state’s employment base has contributed to a slower recovery for North Carolina than for the nation as a whole,” said Allan Freyer, public policy analyst with the Budget and Tax Center and author of the report. “In the nation as a whole, there are 2.9 workers for every available job opening, and the situation is even more difficult in North Carolina, where our state’s workers face unusually high levels of unemployment and a critical absence of available employment opportunities. This represents the key challenge facing the state’s policymakers as they address jobs and the economy.”
 
FOR MORE INFORMATION CONTACT: Allan Freyer, Public Policy Analyst, Budget & Tax Center, allan@ncjustice.org, 919.856.2151; Julia Hawes, Communications Specialist, Julia@ncjustice.org, 919.863.2406.