MEDIA RELEASE: Government layoffs drive up unemployment rate

MEDIA RELEASE: Government layoffs drive up unemployment rate
North Carolina worse off than nation

RALEIGH (Oct. 21, 2011) — The unemployment rate rose to 10.5% in September, significantly higher than the national average of 9.1%, according to numbers released by the North Carolina Employment Security Commission this morning. This marks the fourth straight month that the state’s jobless rate has increased, and the fourth straight month that North Carolina’s unemployment increased while the national average stayed steady.

Although the actual number of employed people actually increased last month in North Carolina, the state’s anemic job growth proved insufficient to keep pace with new workers entering the labor market and, perhaps more importantly, also proved unable to offset layoffs in the public sector. As a result, the jobless rate went up.

In fact, increasing unemployment has largely been driven by layoffs in the public sector over the last year, said Allan Freyer, public policy analyst with the North Carolina Budget & Tax Center.

“Since August, state and local governments have laid off 13,700 workers, but even more troubling is the long-term trend," Freyer said. "Since September of last year, we’ve seen the public sector lose between 18,700 and 24,000 workers, depending on the survey. Over the same period, the unemployment rate has jumped from 10% to 10.5%—this is not a coincidence. Despite claims to the contrary, private sector growth is just not strong enough to make up for these government layoffs.”

As experts have attempted to assess these trends in recent months, there has been some discussion of whether to use numbers that rely on statistically adjusted survey results to account for seasonal fluctuations in employment or whether to use numbers taken directly from surveys of employers that are not adjusted and do not account for seasonal hiring patterns.

Although most economists and labor market experts recognize seasonally adjusted data provides more accuracy in analyzing long-term trends, the results of both surveys reinforce each other, Freyer said. “Both adjusted and unadjusted numbers tell us the same story—a year of layoffs at all levels of government has increased the state’s unemployment rate. And this is at the same time that the nation’s unemployment is moving in the opposite direction, from 9.6% last September to 9.1% this September. Clearly, the North Carolina economy is underperforming the nation’s.”

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FOR MORE INFORMATION CONTACT: Allan Freyer, Public Policy Analyst, NC Budget and Tax Center, allan@ncjustice.org, 919.856.2151; Jeff Shaw, Director of Communications, NC Justice Center, jeff@ncjustice.org, 503.551.3615 (cell).

The N.C. Budget and Tax Center—a project of the N.C. Justice Center—seeks to create economic opportunity and shared prosperity for all North Carolinians through non-partisan research, education and advocacy on budget, tax and economic issues.