New NC labor data indicate Unemployment Insurance wasn’t keeping people from working

Slow employment growth persists through last month

RALEIGH (Oct. 22, 2021) — Practical issues, like the Delta variant, lack of affordable child care, and transportation, continue to be the biggest barriers to a full recovery for NC. In the month after Federal supplementary Unemployment Insurance benefits expired on Sept. 4, it’s all the more clear that families need support to cope with the persistent financial ramifications of COVid-19.

“If conservative claims that Unemployment Insurance was keeping people from working were right, September should have seen a wave of people returning to the labor market. What we got instead was a trickle,” said Patrick McHugh, Research Manager with the NC Budget & Tax Center. “We should always be cautious about reading too much into one month of data, but in the first month since Federal supplementary benefits expired, job growth was meager and the smallest number of people left the ranks of the unemployed since the start of COVID-19.”

Click for charts with new labor market data

Economic challenges facing North Carolina include:

  • Month following expiration of Federal Unemployment Insurance benefits saw poor economic growth:
    • Surveys indicate that businesses added fewer than 4,000 jobs in September, once of the lowest monthly growth figures since the start of COVID-19.
    • The number of people actively looking for work in North Carolina fell in September by roughly 5,000, the smallest decline since this time last year.
    • The combined number of people working and looking for work inched up in the past month, but North Carolina labor force participation remains more than 80,000 people below pre-pandemic levels.
  • Practical barriers keeping a huge number of people from rejoining the labor market: As we documented in a recent report, Census surveys conducted between April and July 2021 indicate practical barriers are keeping many North Carolinians out of the labor market:
    • Lack of child care was cited by roughly 250,000 people as the main reason they were unable to work.
    • Concerns about contracting or transmitting COVID-19 was cited as the main reason by 100,000 people, a number that may have increased since July as the Delta variant drives cases higher.
    • Lack of transportation prevented roughly 50,000 people from working.
    • Providing care for an elderly person was the primary reason 50,000 people could not work.
  • More North Carolinians still looking for work: While the headline unemployment rate has declined in recent months, the recovery still has not created enough jobs for everyone who wants to work. Roughly 28,000 more North Carolinians reported looking for work in September than before the COVID-19 outbreak.

  • Worst job losses persist in many low-wage industries: The COVID-19 recession has devastated workers in some industries, while others have almost fully recovered. The largest persistent job losses since February of 2020, prior to the start of COVID-19, have occurred in industries like Accommodation and Food Service (-53,600), Education and Health Services (-37,700), and Health care and social assistance (-27,800).
  • A tale of two labor markets – high-wage recovery and low-wage recession: The headline employment figures mask a deep divide that has persisted throughout the pandemic between the job prospects in highly paid professions and lower-wage industries. Data from mid August indicate that while jobs paying over $60,000 a year have increased substantially compared to pre-COVID levels, more than 1 out of every 5 jobs paying less than $27,000 are still missing. Given that many of the good-paying jobs where growth is happening require specialized skills and experience, substantial support is needed for people who lost low-wage positions during the pandemic to access those opportunities. Many North Carolinians who were already struggling to make ends meet before COVID-19 cannot simply drop everything so they can get the training needed to access the careers where job growth is strongest.

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 patrick.mchugh@ncjustice.org or 919-856-2183; or Mel Umbarger, Budget & Tax Center Senior Communications Specialist, at mel@ncjustice.org.