25.03.2011
News Releases, Policy Points
CHAPEL HILL (March 25, 2011) – In February, North Carolina’s employers added 17,400 more payroll positions than they eliminated, according to data released today by the Employment Security Commission. This monthly gain was the single-largest one recorded since the state’s labor market bottomed out in late 2009. Nevertheless, joblessness remains a serious problem in North Carolina. Over the past year, total payroll employment in the state rose by just 0.8 percent—a pace that will not close the large jobs gap anytime soon.
“Solid job growth in February was a nice change from the unimpressive numbers recorded in recent months,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “February was the best month of job growth since the state’s labor market bottomed out in December 2009. While positive growth is good news, the pace of growth remains insufficient to close the jobs gap anytime soon.”
Last month, North Carolina employers added 17,400 more payroll positions than they cut. Net gains in the private sector (+20,400) were offset by net losses in the public sector (-3,000). Among private industries, professional and business services netted the most positions (+6,800), followed by construction (+4,500), and education and health services (+4,100). The gains were offset by drops in trade, transportation, and utilities (-1,600) and financial activities (-700).
Additionally, a revision to the January data found that the state gained 500 more payroll positions that first thought (+5,000 versus original estimate of +4,500). With that revision, North Carolina has lost, on net, 292,500 positions—seven percent of its payroll employment base—since December 2007.
“One solid jobs report does not a recovery make,” noted Quinterno. “The question is whether the February report was a one-off or the start of a trend. Yet even if the rate of job growth continues at the pace of the past year, the goal of a full recovery remains far in the distance.”
Between February 2010 and February 2011, North Carolina netted 30,500 jobs (0.8 percent). All of the growth (+41,700 positions) occurred in the private sector, while the public sector shed 11,200 positions. In terms of individual industries, professional and business services grew the most in absolute and relative terms (+22,700, +4.8 percent). Construction shed the most jobs in absolute and relative terms (-6,400, -3.6 percent). In the public sector, net job loss resulted almost entirely from reductions at the state (-4,100, -2.1 percent) and local (-7,900, -1.8 percent) levels.
The household data for February, meanwhile, were mixed. Last month, the total number of employed individuals increased slightly (+0.1 percent), while the number of unemployed individuals dropped by 4,275 (-1 percent). Over the past year, the number of unemployed North Carolinians fell by 84,742 (-16.3 percent). Unfortunately, much of this decline was attributable to individuals exiting the labor force. Between February 2010 and February 2011, the size of the labor force contracted by 91,962 individuals (-2 percent).
The February unemployment rate of 9.7 percent was down from the January rate of 9.8 percent. It also was the lowest monthly rate recorded since January 2009, when 9.2 percent of the labor force was unemployed. Over the past year, the unemployment rate fell sharply, dropping to 9.7 percent from 11.4 percent.
“While welcome, the positive job growth recorded over the past year has done little to close the state’s job gap or reduce unemployment to acceptable levels,” observed Quinterno. “The contraction in the size of the labor force remains a real concern. Compared to a year ago, smaller shares of the working-age population are either participating in the labor force or have jobs.
“The positive job growth recorded in February should not obscure the fact that North Carolina’s labor market remains in critical condition,” added Quinterno. “At the current rate of job growth, it will take years to replace the positions lost during the recession, to say nothing of accommodating the state’s growing working-age population. North Carolina still has a long way to go.”
25.03.2011
Policy Points
Rortybomb argues that high levels of joblessness among recent college graduates gives the lie to arguments about structural unemployment and point to a generation that is being written off.
First, the shocking graph that points to a “Lost Generation” in the making…
Second, a discussion of what the trend line means …
This is a cohort with mobility, fresh college degrees, low health care costs, low wage rigidity, etc. etc. I don’t put the flashlight here to ignore the pain that those without college degrees have in this economy. But if young people with college degrees can’t survive in the post-recession era, nobody can. And this dynamites the idea that education alone, instead of monetary and fiscal policy, are the way out of our current high unemployment.
—
I’ve been on the kick of watching the employment rates of 20-24 year olds with college degrees as a barometer for our economy’s health for some time. Some people on the right get that this is going to kill a generation – David Frum in particular has done great work. But in general I point out that everyone on the right is always screaming about the Europeanization of the U.S. economy. Ironically, they have been screaming about the part where we could get universal health care and some decent trains, and not the part where the young generation who are supposed to start building their careers, innovating and creating the future of the economy are sitting idle. The part where a generation becomes permanently detached from the formal labor markets. An economy of insiders and outsiders.
——–
While it is not customary for Policy Points to comment on reports and analyses to which it links, this entry deserves discussion. Rortybomb is right that the inability of an economy to absorb young talent is an alarming one that augers poorly for future well-being. The inability also shows that divorcing calls for increasing levels of educational attainment from efforts to improve labor market conditions is a strategy doomed to failure. Unless adequate employment opportunities exist for new graduates, calls for young people to acquire more education are false bills of goods, especially when viewed in light of escalating college costs.
Without a commitment to adequate job creation, calls for more higher education only will breed cynicism (and debt) on the part of the young. It also will debase education by turning time spent in higher education from a practical endeavor one with intrinsic personal and social rewards into a half-way house where individual students manage to avoid unemployment for a few years in a way that artificially lowers the unemployment rate.
In Policy Points’ view, higher education is extremely important and efforts at improving access and success deserve support. Yet access and attainment are not enough. Without a commitment to strong labor market policies, not every graduate will have a chance to put their educations to good use. In such an environment, a diploma will effectively function as a lottery ticket that provides students with little more than a chance at the kinds of jobs once considered to be the norm.
24.03.2011
Policy Points
For the benefit week ending on March 5th, 13,437 North Carolinians filed initial claims for state unemployment insurance benefits, and 125,844 individuals applied for state-funded continuing benefits. Compared to the prior week, there were more initial and fewer continuing claims. These figures come from data released by the U.S. Department of Labor.
Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of 12,684 initial claims were filed over the previous four weeks, along with an average of 128,687 continuing claims. Compared to the previous four-week period, there were fewer initial and continuing claims.
One year ago, the four-week average for initial claims stood at 17,566 and the four-week average of continuing claims equaled 205,131.
While the number of claims has dropped over the past year so has covered employment. Last week, covered employment totaled 3.7 million, down from 3.9 million a year ago.
The graph (right) shows the changes in unemployment insurance claims (as a share of covered employment) in North Carolina since the recession’s start in December 2007.
Both new and continuing claims appear to have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably. Yet continuing claims remain at an elevated level, which suggests that unemployed individuals are finding it difficult to find new positions.
24.03.2011
Policy Points
Economix blogs about projected changes to the share of the working-age population participating in the labor force.
The [Congressional Budget Office] report observes that the participation rate peaked at about 67 percent during the late 1990s and in 2000, since that’s when baby boomers were in their prime working-age years of 25 to 54. Women had also been entering the labor force at a rapid clip.
…
But since then the share of women who choose to work has fallen. In fact, it’s now at the lowest level in nearly 20 years. Meanwhile baby boomers are reaching retirement age and dropping out of the labor force. Additionally, the share of people under age 25 who are working or looking for work has also fallen.
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