North Carolina's Labor Market Unravels
Justice Center expert: Latest employment report "atrocious"
RALEIGH (March 27, 2009) -- North Carolina's labor market continued to unravel in February, according to data released this morning by the Employment Security Commission. Since the recession's start in December 2007, the state has lost, on net, 176,000 payroll jobs. The share of the population that is unemployed also has ballooned to 10.7 percent.
In February, employers eliminated 27,900 positions. Losses were severe and widespread across most every major sector. All told, 52,000 more North Carolinians joined the ranks of the unemployed in January, thereby bringing the total number of individuals who are jobless and actively seeking work to 491,000.
"The labor market continued to unravel in February," said John Quinterno, research associate at the NC Budget & Tax Center. "Since the start of the recession, North Carolina has lost 176,000 jobs, on net," added Quinterno ."What is remarkable is just how swiftly and suddenly the labor market has unwound. Some 77 percent of the jobs losses have occurred just since September."
"The current labor market recession has surpassed the 1981-82 recession in terms of severity and will soon surpass it in terms of length," added Quinterno.
Data from the past few months tell a devastating story for hundreds of thousands of working Tar Heels. In 2009 alone, the number of unemployed North Carolinians has grown by 33 percent, and the unemployment rate has climbed to 10.7 percent from 8.1 percent. And since the start of the year, the state's employers have eliminated 54,000 payroll positions, on net. In terms of specific industries, professional services, manufacturing and construction have been especially hard hit.
"The numbers are simply atrocious," said Quinterno. "North Carolina's labor market is spiraling downward. While the federal recovery package likely will slow the decline, conditions have deteriorated even more rapidly than the package's architects envisioned. The situation only is getting worse, and more aggressive action is needed."
The chilling numbers further compound the difficult situation facing state legislators coping with severe budget shortfalls. Due to the state's outmoded revenue system, a labor market in free fall will cut further into revenues while increasing the demand for key public services like education at community colleges.
Recognizing economic realities, Quinterno said, requires understanding that the state cannot slip the budgetary vise simply by cutting spending.
"Not only is relying solely on budget cuts insufficient, it could well be counter-productive," said Quinterno. "Government spending is perhaps the only source of demand in the economy, and it helps support the economy's only growth sectors over the past year -- health care jobs and education jobs. Eliminating jobs in those areas only will exacerbate the downward spiral."
For More Information, Contact:
John Quinterno, 919-856-3185 (office); 919-622-2392 (mobile).
The NC Budget & Tax Center provides timely, accessible and credible analysis of state and local budget and tax issues with a special focus on the impact on low- and moderate-income North Carolinians.