>>BY SABINE SCHOENBACH After 25 years of working as a medical assistant at a prominent North Carolina retirement center, Joy got laid off. “I was near retirement age,” she said, “but I was not ready to retire.” She and her husband – who also lost his job last year – have been forced to tap into their 401K after they were cut off from federal unemployment insurance benefits last July. “We can rely on my retirement fund for 20 months, so we don’t have to be worried sick for the time being. I don’t know what we’re going to do after that, though. It’s just really, really bad.”
There’s no way to sugar coat it; a job loss can financially and emotionally devastate a family. The psychological impacts of unemployment are well documented – unemployed workers are twice as likely to experience depression and anxiety and the negative impacts on children of parents struggling to find work can last well into adulthood. A whole host of emotions get wrapped up in job loss, but for most workers, the biggest struggle is simply making ends meet.
Not enough jobs for North Carolina’s jobseekers
What happens when unemployed workers look for jobs in a state without enough jobs? It’s an economic experiment North Carolina has been forced to conduct. The private sector has failed to create good jobs (despite record profits), while the public sector has slimmed down the number of government jobs and curtailed investment in skills training and infrastructure.
The official unemployment rate has fallen recently, but that doesn’t mean that more unemployed workers have found jobs. Actually, only 4 in 10 unemployed North Carolinians have been able to find employment. Policy Analyst Allan Freyer of the NC Budget and Tax Center explains:
Despite falling to 6.4 percent since February 2013, the unemployment rate masks the true plight of joblessness in the state. Since the unemployment rate is calculated by dividing the number of unemployed people by the number of people in the labor force, the unemployment rate can go down if the labor force shrinks, even if genuine joblessness remains high. And that’s what happened from February 2013 to February 2014 – only 48,000 jobless workers moved into employment over the last year. The rest – another 64,000 workers – just gave up and dropped out of the labor force, continuing unprecedented contraction in the state’s workforce.
There are thousands of these >>“missing workers” in North Carolina – jobless workers who, if the labor market were stronger, would be either employed or actively seeking work. The >>NC Budget and Tax Center released a report last week showing that, as of February 2014, there are approximately 250,000 missing workers in our state – an increase of 65 percent over last year. These workers are not counted in the official unemployment rate. If they were, North Carolina’s unemployment rate would be almost twice as high.
The reality is that North Carolina’s job creation still lags behind the nation. Thousands of unemployed North Carolinians would love to get back to work, but there are still >>3 job applicants for every available job opening. For the two applicants left standing, 2014 just >>doesn’t feel like a Carolina Comeback.
More women in more low-wage jobs
Unfortunately, even the worker who finds a job in North Carolina may still struggle. “I was making $65,000 a year as a medical assistant, but there are no jobs close by that would even begin to pay close to that,” said Joy. >>North Carolina has undergone a dramatic shift away from jobs that offer a path to the middle class. For the last century, North Carolina relied heavily on manufacturing jobs, many of which have now vanished due to offshoring and changes in the global economy. North Carolina’s jobs in manufacturing have >>dropped by almost half since 2010. At the same time, poverty-wage jobs that pay less than $23,484 per year have been booming.
Many of these poverty-level wage jobs are in the service sector, a sector dominated by women.
Nationally, >>60 percent of women’s job gains after the Recovery have been in the 10 largest low-wage jobs, paying less than $10.10 per hour. In other words: more than 3 out of 4 low-wage workers are women, and over 1 in 3 are women of color. That’s an important statistic considering that women make up almost half the labor force in North Carolina—and nationally, >>women are the sole or primary provider in 4 of 10 households with children.
Temporary support is crucial for workers and for the economy
Unemployment insurance (UI) is a federal-state program that provides temporary assistance for workers who, like Joy, have lost their jobs through no fault of their own. The purpose of the system is both to alleviate hardships for the unemployed and to act as an “automatic stabilizer” for the economy, boosting economic growth during economic downturns.
North Carolina made history last year by instituting >>draconian cuts to unemployment insurance, cutting jobless workers’ benefit amounts, slashing the time workers can receive benefits, and turning down millions of federal dollars for extended benefits.
>>Despite Governor McCrory’s claims that the cuts have spurred job growth, it’s clear that cuts to Unemployed Insurance have been more harmful than helpful. >>UI cuts make it harder for jobless workers to make ends meet and have kept money out of local economies.
A true Carolina Comeback requires an economy that works for all
The jobs picture looks bleak, but it doesn’t have to be. There are policy options available that will create an economy that works for all of us. >>Alexandra Sirota, Director of the NC Budget Tax Center writes:
Generating too few jobs for those who want to work remains the primary challenge in North Carolina’s economic recovery. State policymakers have so far failed to address the problem. Instead of investing in proven job creation measures through education and job training and more direct investments in infrastructure development and subsidized employment, policymakers have pursued tax cuts that will fail to deliver jobs. Given the current state of the workforce and the rise in missing workers, it is critical for policymakers to make sure jobless men and women have the supports they need to keep looking for work in a job market with too few jobs.
This makes sense to me. Without good jobs and without adequate support during unemployment, North Carolinians can’t pay the bills. When bills don’t get paid and spending is curtailed, the economy suffers. Creating good jobs – those that pay a living wage and provide adequate supports – helps build thriving communities. This >>video from Topos Partnership is a great illustration of how the creation of good, quality jobs should matter to us all.
What do unemployment benefits mean to you? Share your story and learn more about the NC’s unemployment insurance system at >>Tar Heel Workers.
There are no commentsAdd yours