Chris Fitzsimon Fitzsimon File
January 31, 2014
Here are two things you need to know about this week’s news: the state unemployment rate fell half a percentage point in December to 6.9 percent and is down 1.5 percent since December of 2012.
Fewer jobs were created in North Carolina in 2013 than in 2012. That’s right, fewer jobs. That’s despite Governor Pat McCrory’s constant boasting about the “Carolina Comeback” in his first year in office.
And more than 100,000 people dropped out of the state labor force last year, so discouraged in their fruitless search for a job that they gave up looking and are no longer counted when computing the unemployment rate.
That’s why the rate has gone down significantly, not because of massive job creation but because people can’t find jobs no matter how hard they look.
That’s not idle speculation from people opposed to the agenda of McCrory and the Republican leaders of the General Assembly. That’s the conclusion from a wide range of economists—scholars associated with universities, major banks and even conservative think tanks.
Wells Fargo Economist Mark Vitner told the News & Observer that the real state unemployment rate is nowhere near 6.9 percent and the recent drop in the rate exaggerates the improvement in the economy.
East Carolina economist James Kleckley said the drop in the rate is an optical illusion and even N.C. State economist Mike Walden, long affiliated with the John Locke Foundation, said the shrinking labor force is the real problem in North Carolina and across the county.
None of that has stopped the folks on the right from popping champagne corks and declaring that the unemployment numbers prove that the tax cuts for the wealthy passed by state lawmakers last summer were the right way to jumpstart the state economy.
Even more absurdly, they claim that the decision by Gov. McCrory and the General Assembly to slash unemployment benefits forced laid off workers to go back to work—which can’t be true since fewer jobs were created.
But there’s a little desperation creeping into the Carolina Comeback celebration. The head of the Locke Foundation issued a press release when the new unemployment figures were released touting the “growing strength” of the state economy that he said picked up steam after the cuts to unemployment benefits took effect.
The disingenuous claims from the Right are not a surprise. They have to do that. Their whole cynical trickle down philosophy is on the line here.
They must convince people that slashing benefits for laid off workers miraculously creates jobs. Otherwise people will see the suffering the cuts have caused for thousands of families for what it actually is — needless suffering for thousands of families.
The same is true with the tax cuts for the wealthy and out of state corporations they claim will create jobs and attract new companies to the state. Reducing state taxes does not create jobs. State and local taxes are less than two percent of business costs.
Slashing funding for education and human services to cut taxes hurts schools and families—but it serves the Right’s goal of dismantling the government they loathe.
Remember all that when you hear the crowing about the drop in the unemployment rate. It nothing to do with the tax breaks for the rich or the cruel cuts in unemployment benefits.
Here’s one more fact from the N.C. Budget & Tax Center. Only one in ten unemployed workers in North Carolina found a job last year. There were no jobs to find for everyone else.
That’s no Carolina Comeback, no matter how hard Governor McCrory and the think tanks doing his bidding try to convince us otherwise.
Chris Fitzsimon is a founder of NC Policy Watch.