Employment spin

Jan. 09, 2014 @ 09:31 AM

This editorial appeared in the News & Record, Greensboro

After North Carolina cut unemployment benefits last summer, people went out and got jobs.

That's the compelling story line Republicans are spreading to explain one reason for the state's rapidly falling unemployment rate. It was 8.9 percent in July, when extended benefits ended and weekly payments decreased, and it declined steadily to 7.4 percent in November.

"Give people incentives to stay home, many will stay home. Give them incentives to work, and many more will work," Jim Tynan wrote last week for the conservative journal Civitas Review Online.

Is it that simple? Can North Carolina, and the entire country, turn the economy around by cutting off unemployment benefits? As Congress considers extending long-term unemployment benefits, with Democratic Sen. Kay Hagan of North Carolina playing a key role, should it expect more people to quit working if they can collect unemployment checks?

Such an explanation requires the belief that all it takes to find a job is to look for one. Have these jobs really been available all the time, just waiting for shirkers to finally get off the dole? No. Jobs have been scarce, and the so-called economic recovery is creating them at a slow pace.

So, what about the plummeting unemployment rate? Surely that proves tens of thousands of North Carolinians finally are getting back to work, doesn't it?

It's not that simple. While more people are working, a much greater number have left the workforce. UNCG economist Andrew Brod noted recently that if the state's labor force had been as large in November as it was in January, the most recent unemployment rate would have been 9.5 percent instead of 7.4 percent. Harvard economist Lawrence Katz last week said North Carolina's shrinking labor force accounts for 95 percent of the falling unemployment rate. Job growth accounts for just 5 percent.

The trouble with these numbers is that they don't explain much. Are thousands of North Carolinians moving straight from the unemployment rolls to jobs because their benefits were cut? Given the lack of direct evidence, anyone can assert his or her own opinion. Why is the state's workforce shrinking while its population grows? Perhaps it's an indication that many people have become discouraged and stopped seeking jobs. If they aren't registered as looking for work, they're not counted as being unemployed. But there's no direct evidence to fully support the discouraged worker theory, either.

This much is certain: Most people who are out of work, and out of unemployment benefits, still need help. They may qualify for more food assistance. Their children may get free school breakfasts and lunches. They may enroll in Medicaid. They may get housing subsidies. During the long recession, more Americans have been granted disability benefits. More people also rely on private charity -- and many charities are hard-pressed to meet demand these days. People who don't have the means to support themselves do what they can to get by. They don't simply disappear.

The bottom line for North Carolina's economy is jobs. The number is slowly increasing, but the percentage of the state's population that is employed hasn't improved. If the problem were as easy to solve as some suggest -- cutting off unemployment benefits -- North Carolina would be in the fast lane to prosperity.

Unfortunately, that is far from evident yet. We can hope for better in 2014. At the same time, it is clear that too many people are still stuck in the slow lane -- or thrown to the side of the road.