The statement from Phil Berger, president pro tem of the state Senate, was breathless. Berger, the General Assembly’s most powerful lawmaker and a rock-ribbed conservative, was responding to the drop in the state’s unemployment rate to 5.8 percent, lowest since May 2008.
Said Berger: “Due to smart economic policies enacted by Republican officials over the past four years – reducing wasteful government spending, lowering taxes and returning sanity back to our state’s regulatory climate – North Carolina is setting an example for the rest of the nation on how to combat unemployment.”
There are two problems with this claim. One is that the national recovery – the Dow just passed 18,000 to reach a record high – is lifting North Carolina’s economy more than anything the state has done, or rather has done less of. Secondly, the reality in most households doesn’t match Berger’s triumphant enthusiasm.
In truth, while the unemployment rate has gone down and the state is adding jobs, things are not what they seem. Economists say the state has a large number of people who don’t have skills that match the jobs available and therefore have given up looking for work. They’re out of the labor force, in other words, so they don’t count in the percentages of unemployed people seeking work.
Michael Walden, an economist at N.C. State University, said that if job seekers who lack marketable skills suddenly entered the job market, the unemployment rate would be closer to 6.8 percent.
In addition, Walden and other economists say that many people who are working are underemployed – they have skills that in a better economy would enable them to make more money. So they’re making less than they used to, though they count as working.
As The Washington Post noted in a story that ran Sunday in The News & Observer, North Carolina is at the “epicenter of a phenomenon economists call ‘hollowing out.’ Simply put, it’s the disappearance of jobs that require some training and technical mastery, including work in factories, call centers and secretarial pools.”
The state lost a lot of jobs as more of them moved overseas or were eliminated by machines. And real median income, based on statistics from economists as reported by The Post, is down by about 10 percent.
The short term statistical bump therefore isn’t necessarily a long-term healthy sign at all. And things aren’t going to get truly robust unless Republicans turn to training and education as ways for the state’s residents, its average citizens, to get the skills they need to rejoin the middle class, a group that in economic terms is shrinking in North Carolina and elsewhere.
The problem Republicans have in selling North Carolinians on the idea that things are great and people are better off is that it’s not true where most North Carolinians live.
They see neighbors who’ve lost their jobs and are having to scramble just to pay their mortgages, much less live anywhere close to the way they did before the recession hit. They’ve said goodbye to neighbors because those friends lost their homes when they couldn’t find other work elsewhere. And they see still other neighbors, hard-working folks who have been looking for jobs, who will suffer real hardship because of cutbacks in unemployment benefits instituted by Republicans in the General Assembly.
North Carolina needs forward-thinking, hopeful leaders who want to help average citizens do better. Instead, they’re told less is more in terms of government services and unemployment is largely solved by shrinking the insurance benefits as if they’re a form of wasteful welfare.
Neglecting the needy and shrinking support for those who have lost their jobs will prolong the economic pain for hundreds of thousands of North Carolina families, and needlessly so. So before Sen. Berger lights any celebratory firecracker, he should look past the unemployment rate to see the tough job market that’s real to so many North Carolinians.