Despite a superficial improvement in North Carolina’s unemployment rate over the past three months, the state’s jobs picture remains extremely troubling, especially for the 70,000 Tarheel workers likely to lose federal extended unemployment benefits on June 30th. There are just not enough job openings available in order to meaningfully bring down unemployment rate, and as a result, thousands of the state’s workers are simply giving up on the job search and dropping out of the labor force altogether.
Perhaps most critically, there are currently 4 million unemployed workers chasing just 1.4 million jobs across the entire Southern region (see the following figure). This translates to almost three unemployed workers for every one available job opening, suggesting that even if every job vacancy was filled, there would still be two unemployed workers left without the opportunity to work. Additionally, the situation in North Carolina is likely worse than the regional average, given that the Tarheel state is home to an outsized portion of the region’s overall unemployment (10.4 percent of the total number of unemployed people in the South) compared to its share of the region’s total employment (just 8.5 percent).
Unemployed workers in North Carolina have nowhere to go in order to find work, and as a result, they are dropping out of the labor force in increasing numbers. In May, more than 1,400 workers dropped out of the labor force, while only 1,000 unemployed workers found jobs, suggesting that the biggest factor in the state’s dropping unemployment is simply unemployed workers dropping out of the workforce, rather than genuine job creation. When combined with the 20,000 workers who dropped out of the labor force in April, the result of these changes is that the state’s labor force is now at the lowest level since August 2012, erasing almost nine months worth of gains.
Even more troubling, the total number of employed people in North Carolina is at the lowest levels since November 2012, suggesting that the state’s economy is continuing to struggle in generating long-term sustainable job creation. And as along job creation continues to struggle, the unemployed will continue to outnumber available job openings, leaving these workers with no place to go in order to earn a living.