Headline unemployment rate drop hides how far we are from true recovery
RALEIGH (April 16, 2021) — The half-point drop in the headline unemployment rate from February to March (5.7 to 5.2) is actually more driven by people not looking for work than finding new employment. Based on these preliminary data, nearly 17,000 fewer North Carolinians were looking for work in March than February, significantly more than the number of people who found work. The actual employment data show that recovery continued to be slow in March.
“Hopefully, the American Rescue Plan will be a proverbial economic shot in the arm, but we’re still a long way from full recovery,” said Patrick McHugh, Research Manager with the North Carolina Budget & Tax Center. “More North Carolinians actually left the labor market in March than found a job, and at this rate of people moving back to work, we wouldn’t recover to pre-COVID levels of employment until the end of the year.”
Economic challenges facing North Carolina include:
- At current rate of recovery, it would take another 9 months to get back to pre-COVID levels of employment: If recovery continues at the modest pace recorded in March (adding 17,300 jobs), North Carolina would not recover to pre-COVID levels of employment until December of this year. After recovering more than half of the jobs lost at the start of the pandemic by August 2020, the recovery has proceeded at a much slower pace since then. Over the past six months, North Carolina has added fewer than 15,000 jobs, on average, per month.
- Low-wage workers are still in a deep recession, while people with high-wage jobs have recovered. Data through mid-February show North Carolina has more jobs paying over $60,000 than before COVID-19, while more than 1 in 7 of the jobs paying less than $27,000 are still missing.
- Job losses are heavily concentrated in some industries, particularly among worst-paid workers: The COVID-19 recession has devastated workers in some industries, while others have almost fully recovered. The largest persistent job losses since February of last year have occurred in industries like Accommodation and Food Service (-62,500), Government (-39,800), Health Care and Social Assistance (-20,000), and Arts, Entertainment and Recreation (-18,700).
- Lack of aid has undermined local government services: Many local governments across North Carolina have not been provided the assistance they need to cope with this crisis. Even as local governments were trying to serve residents facing a global pandemic, total local government employment is nearly 24,000 below February of last year.
For charts showing the most recent labor data and COVID-19 job data, visit the Budget & Tax Center’s Labor Market page at www.ncjustice.org/labormarket.
For more context on the economic choices facing North Carolina, check out the Budget & Tax Center’s Prosperity Watch report.
The nonpartisan Budget & Tax Center is a project of the NC Justice Center, which works to eliminate poverty in North Carolina by ensuring every household in the state has access to the resources, services and fair treatment it needs to achieve economic security.
FOR MORE INFORMATION, CONTACT Patrick McHugh, Budget & Tax Center Research Manager, at firstname.lastname@example.org or 919-856-2183; or Mel Umbarger, Budget & Tax Center Senior Communications Specialist, at email@example.com.