For the seventh straight month, unemployment rates in North Carolina decreased. According to the North Carolina Justice Center, the unemployment rate for April was just five percent. This number, however, does not account for everyone who may want to work but are unable to.
The headline unemployment rate only accounts for people who have looked for a job in the last few weeks. This means people will not be counted if they have looked for jobs in the past, but could not find one or are currently unable to look for work.
The unemployment rate also does not account for the number of people who are currently working part-time, but would prefer to work full-time.
Patrick McHugh is a Research Manager for the North Carolina Budget and Tax Center within the North Carolina Justice Center. He explained how the unemployment rate does not show the full story of the labor market.
“We’ve seen almost as many people leave the labor market since January as have found jobs,” McHugh said. “That means almost half of the decline of the headline unemployment rate is actually bad news over the last four months not good news.”
The governor recently issued an executive order where all existing claimants of unemployment benefits will now be required to fulfill work search requirements beginning June 6. Under this executive order, claimants must contact at least three different employers each week and keep a record of their work search.
McHugh said he believes the new executive order is a “worrisome” development.
“A lot of people that may struggle to connect with employers for entirely legitimate reasons – you know they don’t have reliable internet at home, they don’t have a reliable housing situation,” McHugh said. “A whole host of reasons that people that should be collecting unemployment because they lost a job through no fault of their own may struggle to sort of meet those requirements.”
McHugh said jobs temporarily furloughed from COVID-19 recovered fairly quickly, but the overall recovery in the last several months has actually slowed down.
He said a common myth is people on unemployment insurance do not want to work.
“It becomes very quickly a story about, ‘Well nobody wants to work [because of] these unemployment benefits,’” McHugh said. “[That’s] hogwash, that’s just not the reality. The reality is there are more people actively looking for work today than there were before the COVID-19 recession came along.”
Some of the reasons people are unable to find jobs are barriers to entry. This includes people who must take care of children, lack of internet, and unreliable transportation.
McHugh said one potential solution to helping more people find jobs would be to cover the costs of the barriers to entry.
He said a long-term would be if the state paid a living wage. This would mean people toward the bottom end of the wage scale could afford to survive for a few months without work and could get back to work quicker.
“The consequence of having such a top-heavy economy means that we are weaker and more vulnerable collectively to a recession like this so a recovery takes longer,” McHugh said.
To learn more about the North Carolina unemployment data, click here.
Photo via AP Photo/Jeff Chiu
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