BTC BRIEF: The Jobs "Miracle" That Never Happened - North Carolina still lagging the nation in job creation and unemployment

By Allan Freyer
Policy Analyst, Budget & Tax Center
December 2013

Over the past several months, legislative leaders have falsely claimed that cutting state spending and cutting taxes and privatizing are responsible for turning around the state’s economy after a sluggish recovery from the Great Recession. While the state’s economy has certainly improved since 2011, there is little to brag about—this recovery is the slowest of any in 30 years1 and what marginal job growth the state has experienced is due largely to steady growth in the national economy, rather than anything special happening in North Carolina.

If the General Assembly’s decisions were responsible for a faster recovery, we would expect to see North Carolina’s economy perform better than the national average. But in fact, we see the opposite—since 2011, North Carolina’s rate of job creation has been identical to the nation as a whole, while the state’s unemployment has remained higher than the national average. As in other states that have tried a low-road approach, cuts to spending and taxes have failed to turn around the state’s economy, while spending cuts killed public sector jobs and kept unemployment high.

The lesson is clear—far from experiencing job growth due to recent decisions by state policymakers, North Carolina’s labor market has failed to catch up to rest of the nation in the years since 2011.

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