Prosperity Watch Issue 1

Prosperity Watch, Issue 1, No. 3: Public Sector Layoffs Hamper Long-Term Job Creation

Last Friday, the U.S. Department of Labor released its regular monthly employment report, revealing that nation-wide job creation has lagged significantly over the past two months.

At the national level, the U.S. economy created only 18,000 new jobs in June, a number virtually unchanged from those reported for the month of May.  Contrary to the view that public sector employment somehow does not count as “real jobs,” it is precisely the 39,000 layoffs from federal, state, and local governments in June that has dragged down the national job creation numbers: without these public sector job losses, the American economy would have generated 57,000 new jobs last month, almost three times the actual job creation numbers reported for June.

This problem is mirrored at the state level, according to data released by the NC Employment Commission.  From March to May, the North Carolina economy actually lost 3,800 jobs, despite a temporary uptick in employment in April.

As the following graph indicates, these short-term job losses have been largely driven by the 2,600 public sector layoffs since March, layoffs which have obviously hampered North Carolina’s recovery, dragging down the state’s job creation efforts after four months of anemic—but consistent—total job growth from December 2010 to March 2011.

Perhaps even more critically, the graph reinforces the ongoing interrelationship between public employees and the state’s long-term job creation numbers.  It also demonstrates the longer term trend of declining total employment since May 2010, during which North Carolina lost a total of 15,000 state and local government jobs. Despite growth in total employment in the first quarters of 2010 and 2011, sustained layoffs from state and local governments in the second quarter of both years have contributed to the subsequent downturn in total employment over the remainder of each year.[1] 


[1] These numbers have been adjusted by the ESC to reflect regular seasonal swings in employment.


Prosperity Watch, Issue 1, No. 2: The Majority of North Carolina Counties Still Need to Experience Sustained Positive Employment Growth to Reach Pre-Recession Employment Levels  

Source: Employment Security Commission, April 2011, County Data from the Local Area Unemployment Survey.

Data on the labor market in North Carolina's counties provides another way to look at the state's economic recovery and employment opportunities for its growing workforce. Looking at how long it will take North Carolina to reach pre-recession employment, as measured by the percent of the total population that is working, provides a metric for how different counties are faring in the recovery.

It does not, however, mean to suggest that pre-recession employments are a high benchmark. For many counties, pre-recession employment levels were already depressed, representing significant challenges to workers and their communities.

A comparison of employment growth over the 12-month period from April 2010 to April 2011 suggests that the vast majority of counties (69) saw a decline in the number of employed persons, adjusting for population growth. If current employment growth rates were to continue, thirteen counties would take until after 2040 to reach pre-recession employment levels. Fifteen counties would reach pre-recession employment levels between 2020 and 2030.

Two small eastern counties-- Hyde and Washington Counties--have already reached pre-recession employment levels.

The disparity across counties in the experience of the recovery suggests a very real need to target investments in public structures and consider comprehensive place-based and regional job creation efforts that can sustain good, quality jobs for North Carolina's workers.

**Note: Temporary Census employment in April 2010 accounted for roughly 3,000 additional employed workers across the state. Removing these temporary workers from the April 2010 county employment figures would not significantly change the reported findings.


Prosperity Watch, Issue 1, No. 1: As of May 2011, North Carolina's job deficit stands at 479,900


Source: Economic Policy Institute analysis of Bureau of Labor Statistics data, May 2011

When the recession began in December 2007, North Carolina had 4,171,800 jobs. Since then, North Carolina has experienced 30 months of job loss. North Carolina 's employment trough occurred in February, 2010 when North Carolina had 323,000 fewer jobs than it did before the recession started. Now in May, 2011, North Carolina has 288,700 fewer jobs.

North Carolina's jobs deficit, or the difference between the number of jobs North Carolina has and the number it needs to regain its pre-recession employment rate, is 479,900. That number includes the 288,700 jobs North Carolina lost plus the 191,200 jobs it needs to keep up with the 4.6% growth in population that North Carolina has experienced in the 41 months since the recession began.

Continued job loss further adds to the jobs deficit. From April 2011 to May 2011, more than 7,000 jobs were lost. The unemployment rate remained unchanged at 9.7 percent because despite growth in the number of employed the loss in jobs and the decline in the labor force have kept the rate constant.