Prosperity Watch Issue 3

Prosperity Watch, Issue 3, No. 3: The ever-growing job deficit

 

North Carolina’s unemployment rate increased to 10.1% in July, driven almost entirely by layoffs from state and local government. State and local governments shed a total of 12,100 jobs, while the private sector only created 6,900 jobs and the military created another 1,000 jobs. For the second straight month, public sector layoffs completely wiped out any job gains generated in the private sector.

The continued loss of jobs is digging a deeper hole for North Carolina’s workers. The jobs deficit in July or the difference between the number of jobs North Carolina has and the number it needs to regain its pre-recession employment rate, is 502,500. That number includes the 303,700 jobs North Carolina lost plus the 198,800 jobs it needs to keep up with the 4.8% growth in population that North Carolina has experienced in the 43 months since the recession began.
 

Prosperity Watch, Issue 3, No. 2: Recession's Impact Uneven Across
North Carolina's Metro Areas

 

The Bureau of Economic Analysis’s recent release of 2010 total personal income data for all 366 metropolitan areas illustrates how the impact of the Great Recession varied significantly across North Carolina’s metropolitan areas.

All but two of North Carolina’s fourteen metro areas experienced faster personal income growth between 2008 and 2010 versus the national average of 1.0-percent growth. Even among the dozen North Carolina metros that experienced better-than-average personal income growth from 2008 to 2010, in only five metros – Durham-Chapel Hill, Raleigh-Cary, Fayetteville, Jacksonville, and Greenville – did private, non-farm earnings experience positive growth. In seven of the eight other North Carolina metros experiencing personal income growth, transfer receipts, primarily in the form of unemployment insurance and Social Security benefits, prevented total personal income from falling during the recession.

Yet in the midst of the worst recession since the Great Depression, two metropolitan areas in North Carolina bucked the national and statewide trend and experienced significant growth in local personal incomes. These two military-dominant metro areas – Fayetteville and Jacksonville – saw total personal income rise by 9 percent and 14 percent, respectively, from 2008 to 2010. The Jacksonville metro area actually experienced the most personal income growth during those two years among all 366 US metro areas.

At the other end of the economic spectrum were Winston-Salem and Rocky Mount. Among all fourteen North Carolina metros, Winston-Salem was the only one to experience a net decline in personal income, putting it in the bottom fifth of all US metros in terms of personal income growth. Rocky Mount, which fared better than Winston-Salem in terms of total personal income growth, was the only North Carolina metro to experience two consecutive years of declining net earnings. Only a substantial increase in transfer payments and better-than-average returns on unearned income (dividends, interest, and rent) kept Rocky Mount from experiencing a net decline in total personal income.

What all North Carolina’s metro’s have in common, however, was the importance of public-sector support from transfer receipts and/or military spending in keeping local economies afloat during the first two years of the Great Recession.
 

Prosperity Watch, Issue 3, No. 1: Unemployment Rate Masks the Depth of Labor Market Challenges for Workers

Source: Bureau of Labor Statistics, A-15 Historical Tables. *Measures Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers. Shaded area represents the period of official recovery from the Great Recession.

Underemployment—reflecting workers unemployed, discouraged workers or workers who have taken part time for positions for economic reasons—remains a critical challenge facing our economy, as evidenced in the new national jobs numbers released by the Bureau of Labor Statistics on Friday. Despite the addition of 117,000 jobs in July, the country continues to face not just high unemployment but high underemployment, and with it a sputtering economic recovery.

In July 2011, 16.1 percent of the nation’s workers were underemployed. That figure has remained persistently high since 2009. For North Carolina, underemployment was at 17.5 percent in the first quarter of 2011.

Without jobs, workers will continue to face challenges in finding employment and the nation will continue to underutilize its workforce.