The cynical celebration by Civitas and the NC Chamber

by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, January 16, 2014.

Thousands of long term laid off workers in North Carolina have simply given up looking for a job and dropped out of the labor force and folks like the N.C. Chamber and the Pope Civitas Institute either don’t care, don’t want to admit it, or don’t understand what the unemployment numbers actually mean, judging from their latest absurd and borderline offensive comments about the state’s jobless picture.

The N.C. Chamber recently sent an email message to its members with the title “North Carolina Cut Jobless Benefits and the Sky Didn’t Fall,” citing a quote about the state’s unemployment rate from the Manhattan Institute, a national right-wing think tank, and a misinterpretation of numbers from the U.S. Labor Department.

A staff member of the Pope Civitas Institute in Raleigh recently penned a ridiculous column making the same point, that somehow the draconian cuts to unemployment benefits that Governor Pat McCrory and the General Assembly made last summer are responsible for the drop in the state unemployment rate.

Nothing could be further from the truth.

North Carolina’s unemployment rate has fallen two percentage points in the last year because so many laid off workers have become so discouraged they have stopped looking for a job, not because more people are working. The discouraged workers are not counted when the jobless rate is calculated.

Harvard economist Lawrence Katz estimates that 95 percent of the drop in unemployment is due to workers dropping out of the workforce. An analysis by UNC-Greensboro Economist Andrew Brod found the unemployment rate would be 9.5 percent in North Carolina if the size of the labor force was the same as it was a year ago.

The Civitas op-ed points to a hike in job growth last fall, forgetting apparently that employment numbers are seasonal and that jobs generally pick up after the summer ends. The correct way to assess job performance is to look at the year as a whole and North Carolina did not do well in 2013.

It was the worst year for job creation since the Great Recession ended and there were fewer people working in North Carolina in 2013 than the year before.

North Carolina has suffered a net loss in jobs since Governor Pat McCrory took over, not gained any jobs.

The cuts made to unemployment benefits last year haven’t pushed people into jobs, they have only made life more difficult for people unable to find work. There are still three people looking for employment for every one job that is available.

The Chamber needs people to believe that slashing unemployment benefits and denying federal emergency assistance was a good idea because they wrote the law that left thousands of workers and their families out in the cold.

The Chamber’s email didn’t mention that before the cuts, North Carolina’s unemployment benefits were in the middle of the pack among the 50 states, not the 9th most generous as Governor McCrory and others have claimed.

The Chamber also didn’t mention that there were other ways that lawmakers could have addressed the unemployment insurance debt the state built up during the recession after cutting unemployment taxes on businesses repeatedly during the 1990s.

They could have asked businesses to pay more. Instead nearly 75 percent of the money raised to pay off the debt comes from the workers themselves in benefits changes while businesses will only have to pay 22 percent of the bill. And the cuts to worker benefits are permanent. Much of the additional cost to businesses ends when the debt is repaid.

Then there’s the effective date of the cuts that made North Carolina the only state in the nation to refuse to extend federal emergency benefits, even though it would not have cost the state a dime to allow 170,000 workers to continue to receive the assistance while they looked for a job.

The sky may not be falling for the NC Chamber, but fewer people are working in North Carolina and thousands of families are having a harder time making ends meet thanks to the cynical legislation the Chamber wrote and convinced state lawmakers to pass.

That ought to be something to be ashamed of, not brag about.