NEWS RELEASE: Jump in Jobless Rate Raises Concerns about Budget Cuts


(RALEIGH) - North Carolina's unemployment rate jumped to 11.1% in May - the highest rate on record for the state and well above the national average. The new number heightens concerns of how proposed state budget cuts and layoffs will impact working families.

"When unemployment is this high, neither businesses nor individuals are generating the economic activity necessary to help lift North Carolina out of this recession," explained Elaine Mejia, director of the NC Budget & Tax Center. "This is when the private sector relies on the public sector to create jobs and spend money. If the budget cuts and layoffs now being considered in the General Assembly are implemented, it will make the recession worse while putting thousands of families into dire financial situations."
After hovering at around 10.7% for three months, North Carolina's unemployment rate rose 0.4% in May. The national rate rose half a percentage point to 9.4%. North Carolina currently has the seventh highest unemployment rate in the country. (Employment Security Commission of NC's release on the unemployment numbers)
"State leaders need to consider the job market when crafting a revenue package this year," said Meg Gray Wiehe, tax policy analyst for the NC Budget & Tax Center. "The General Assembly is now considering some smart reforms - such as creating two new upper income-tax brackets and closing corporate tax loopholes - that will require those who can afford to contribute more to do so. The state must find a way to maintain public services while not putting additional burdens on low-income families."

"State services play a vital role in helping families weather economic storms," added Mejia. "As the jobless rate rises, the state needs to ensure that laid-off workers have access to health insurance for their children and that the doors to community colleges stay open so they can get needed training."

Contact: Elaine Mejia, Director, NC Budget & Tax Center -, 919-856-2176 or Meg Gray Wiehe, NC Budget & Tax Center -, 919-856-3192