What Happened to the Jobs? A Tale of Two Economic Cycles

BTC Reports, Dec. 2008
By John Quinterno, Research Associate

Executive Summary
* Since 2000, North Carolina has not created enough jobs to keep pace with
the growth of the workforce. As a result, proportionally fewer prime-age
adults (ages 20-64) are employed now than in 1990.

* This pattern is the opposite of the one that prevailed during the 1990s,
when job growth consistently outpaced workforce growth. If the 1990s
trend had continued, holding all else equal, there currently would be up
to 487,000 more positions on North Carolina payrolls.

* Sluggish job growth has contributed to the economic hardships facing the
state’s households. The failure to create adequate numbers of jobs has
resulted in relatively high levels of unemployment and underemployment,
which have held down wages and incomes. The result: stagnant or
declining living standards for working households.

* The 2008 recession has exacerbated these difficulties. Between January
and September, job creation in North Carolina essentially ground to a halt,
and unemployment climbed to a level reached on only one other occasion
since 1990.

* Even if the recession proves brief, North Carolina’s labor market likely will
limp through 2012 and perhaps even longer if the rebound is a “jobless”
recovery marked by relatively high unemployment and stagnant wages.
The recovery following the 2001 recession was a jobless one in which few
households experienced few tangible improvements in their well-being.

* Both federal and state actions are needed to recover from the downturn,
renew broadly shared economic growth and rebuild pathways to
opportunity. The federal government must take the lead and make the
large-scale investments needed to aid struggling households and stimulate
the larger economy. Meanwhile, state leaders must avoid making the
situation worse must by attempting to “cut” their way to a balanced
budget.

 

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