MEDIA RELEASE: Shrinking Labor Force Masks Real Jobs Picture across North Carolina

(RALEIGH - May 25, 2012) — North Carolina’s unemployment rate dropped across 93 counties and all 14 metro areas last month, according to new monthly data released by the Division of Employment Services today.

Although these numbers reflect some small positive job growth, they mask a deeper, more troubling trend in the state’s labor market—the ongoing shrinkage in the labor force across the state’s regions. With the sole exceptions of the Research Triangle and the Piedmont Triad regions, the remaining five regions—Northeastern, Southeastern, Western, and Greater Charlotte—all experienced significant decreases in their pools of available, prime-age workers over the last year.

Specifically, the Triangle grew its labor force by 1.1% and its employment by 1.9% in the last year, closely followed by the 0.3% workforce growth and 1.5% employment growth over the same period in the Piedmont.

At the opposite end of the employment spectrum, the Northeastern region, encompassing 12 counties in the Tidewater and along the Virginia border, experienced the most significant drops last year, with a 3.3% decrease in the labor force and a 2.9% drop in employed people. Similarly, Southeastern North Carolina—stretching along the South Carolina border—saw its labor force shrink by 1.1% and its employment by 1.9%. Contributing to this trend, the Southeast is home to three of the 10 counties with the highest unemployment rates in North Carolina (Scotland, Robeson, and Richmond) and the only metropolitan or micropolitan area—Laurinburg—to see its unemployment rate go up over both the last month and the last year.

“Although the drop in the unemployment rate is unquestionably a positive sign, we should not read too much into this as a measure of our state’s long-term recovery—especially since much of the mathematical drop in the unemployment rate is simply due to the decrease in the labor force in most of these regions across the state,” said Allan Freyer, Policy Analyst with the NC Budget & Tax Center. “We’re also seeing troubling signs of a two-tier recovery in the state, with regions like the Triangle and the Piedmont growing their labor force and employment base, while the rest of the state gets left behind.”

FOR MORE INFORMATION CONTACT: Allan Freyer, Policy Analyst, 919-856-2151;  Alexandra Forter Sirota, Director of the Budget & Tax Center, 919-861-1468.