Patrick Conway: Crunching unemployment numbers

January 18, 2014 

Brian Balfour’s Jan. 14 Point of View piece “True Tar Heel tally: more workers” applauding the recent restrictions on unemployment insurance says: “when you stop paying people not to work, more people actually go back to work.” The argument of the rest of the column does not support this strong conclusion.

He said that the N.C. unemployment rate fell by 2 percentage points last year because of this policy change. The unemployment rate fell, but not due to more people actually going back to work. In fact, there were about 6,000 fewer employed in November 2013 than in the previous December. The unemployment rate fell because discouraged workers left the labor force.

He said that employment growth in September, October and November was due to the policy reform of unemployment insurance introduced July 1, 2013. But we observed similar increases in employment in those three months in 2011 and 2012 – long prior to the policy reform. The increase in employment in North Carolina for those three months in 2013 was 39,402. In 2012, it was 38,056. In 2011, it was 36,990. Something is causing employment growth of the same magnitude year after year (Christmas, anyone?), but unemployment insurance reform can’t explain the pattern.

Patrick Conway

Chapel Hill

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