Prosperity Watch Issue 22, No. 2: Jobs deficit presents clear need for policy solutions
As the General Assembly prepares to take final action on unemployment insurance reforms, December’s jobs report from the NC Division of Employment Security reinforces the bleak outlook for North Carolina’s labor market and the fundamental lack of available jobs to meet the needs of unemployed workers. Taken together, these realities have profound consequences for the unemployed if policy makers adopt unemployment insurance reforms that significantly scale back benefits for jobless workers.
According the December report, the true nature of the state’s labor market challenge—the lack of available jobs—is best reflected in a number of different indicators that tell the same story. First, the unemployment rate increased from 9.1 percent to 9.2 percent in December. Even more troubling, the ranks of the long-term unemployed—those out of work for six months or more—make up almost half of the total pool of jobless workers.
Many of these long-term unemployed are unable to find work largely because of another and even more consequential problem with the North Carolina’s labor market—the inability of to create enough available jobs to meet the needs of the jobless. Specifically, the state’s jobs deficit—the number of jobs the state needs to create to replace those lost to the 2007-2009 economic downturn and keep up with population growth—now totals 518,500. At a time when there are almost three workers for every available job opening across the Southeast, the jobs deficit reinforces the lack of employment opportunities as the fundamental driver behind the struggling labor market.
Taken together, the inability of the unemployed to find work can be seen largely as the result of the state’s jobs deficit and corresponding lack of job openings. In turn, this reality generates significant consequences if unemployment insurance reform significantly reduces benefits for jobless workers. If unemployed workers still outnumber available job openings when unemployment benefits run out, then these workers will face significant ongoing financial hardship without realistic alternatives to find work and the means to support themselves.