Thursday, July 11, 2013 11:12 PM
Three in 10 out of work in Wilson County?
Think tanks say county's true unemployment closer to 30 percent
By Corey Friedman | Times Online Editor
As many as three in 10 Wilson County residents may be jobless, analysts say, a figure more than double the county’s 13 percent unemployment rate.
State data shows that unemployment climbed from 12.3 percent in April to 13 percent in May, giving Wilson the state’s fourth-highest figure. But think tanks say the unemployment rate doesn’t account for long-term jobless residents who have left the work force.
"While we have experienced some genuine — if minor — job creation over the last year, the biggest factor driving drops in the unemployment rate is the fact that jobless folks are giving up on finding work and dropping out of the labor force rather than because we are experiencing sustainable long-term job creation,” said Allan Freyer, public policy analyst for the North Carolina Budget and Tax Center.
Unemployment statistics calculated by the state Department of Commerce are derived from labor market surveys, Freyer said, and discouraged job-seekers who have stopped looking for work aren’t included in the numbers.
A more accurate barometer, Freyer said, is the percentage of residents age 16-64 who have jobs. In Wilson County, that figures to 69.6 percent, leaving about 31.3 percent of the county’s population unemployed.
The percentage of working-age residents with jobs is lower in Nash County (64.9) and Edgecombe County (59.1), according to Freyer.
State figures peg Edgecombe County unemployment at 14.1 percent, the third-highest number in the state. Joblessness rose from 11.7 percent to 12.1 percent in neighboring Nash County.
"I think unemployment is underreported,” said Francis DeLuca, president of the Civitas Institute. "All the numbers are hiding a bigger problem, and that’s the lack of jobs and the number of people who are leaving the work force.”
The N.C. Budget and Tax Center is a project of the liberal-leaning North Carolina Justice Center think tank. Colleagues at the conservative Civitas Institute agree that state data only shows a piece of the true unemployment picture.
"If people say they are not looking for work, they are not counted in the unemployment statistics,” DeLuca said. "Common sense tells you that there’s a lot of people out of work who probably aren’t being reported.”
Those receiving unemployment benefits are not automatically dropped from the labor force when their benefits expire, Freyer and DeLuca said. Their status as unemployed workers hinges on the answers they provide in federal Bureau of Labor Statistics surveys.
Nine percent of North Carolinians responding to a Civitas Institute poll identified themselves as unemployed in May, and an additional 33 percent said they were retired. DeLuca said. In an age of shrinking pensions and workers waiting longer to retire, that raises red flags.
"A lot of people report their status as retired when they would like to be employed, and that’s a function of the economy,” DeLuca said.
The 9 percent figure mirrors North Carolina’s statewide unemployment rate, which stood at 8.9 percent in May.
The Civitas poll was conducted by phone and administered to 600 registered voters in late May. It has a margin of error of plus or minus 4 percent.
While Wilson County’s unemployment — official or otherwise — may be high, state officials say the spike reported in May reflects a seasonal trend of college and high school students flooding the job market and probably doesn’t indicate a permanently higher proportion of jobless residents.
"It’s kind of typical,” N.C. Division of Employment Security spokesman Larry Parker said. "We see this in the May and June numbers. This is the time of year when you start to see students flooding the labor force when school’s out. You’re going to see those seasonal bumps at the end of summer and during the holiday season.”
Wilson County had 12.9 percent unemployment in May 2012, Parker said, so a 13 percent figure exactly a year later doesn’t represent a significant difference.
"It’s held steady,” Parker said. "Yes, it’s still one of the higher rates in the state, but at the same time, you have not added that much to the unemployment rate. From the numbers standpoint, things are pretty flat.”
In May 2012, Wilson County had a labor force of 41,586 people, and 5,362 were unemployed, Parker said. This May, the labor force stood at 41,610 with 5,422 out of work.
Liberal and conservative think tanks may agree that true unemployment is much higher than state figures show, but they’re sharply divided on how North Carolina can add jobs and bolster its lagging economy.
The Civitas Institute favors eliminating the state income tax for individuals and businesses and replacing it with higher sales and consumption taxes. DeLuca said doing so would make the Tar Heel State more attractive to companies seeking a home.
"Companies don’t really pay taxes — all that gets passed along,” he said. "When you have a corporate income tax, that’s just a shell game. Their employees and their customers are going to pay that tax.”
The N.C. Budget and Tax Center opposes that plan.
"Our understanding of economics is that tax cuts are a very poor strategy for boosting the economy and boosting employment,” Freyer said.
The key to bringing back the jobs, he said, is retraining North Carolina workers who were laid off from manufacturing jobs when the Great Recession hit.
"I think the unemployment problem here is based on a historical situation — we were over-concentrated and over-specialized in manufacturing industries,” he said. "Those went away, and we need to retool our economy for the 21st century.”
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