NC Budget Center's John Quinterno: It's the jobs, stupid | News

NC Budget Center's John Quinterno: It's the jobs, stupid

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"Sluggish job growth in North Carolina over the past eight years has exacted a heavy toll on working families," a new report by the N.C. Budget & Tax Center's John Quinterno finds. The Raleigh organization is part of the progressive N.C. Justice Center family.

In "What Happened to the Jobs? A Tale of Two Economic Cycles," Quinterno describes how jobless was the so-called recovery from the previous recession in 2000 to the beginning of the current one at the end of 2007 -- especially when compared to the rate of job creation between the '91 recession and 2000. North Carolina workers were sucking wind even before this year, in other words, despite economic growth and business profits.

Adds Quinterno, "[T]he economic consequences are likely to get worse ... if state leaders respond to the current situation by enacting budget cuts that typically deepen and prolong recessions."

His executive summary is below:

Executive Summary

􀂄 Since 2000, North Carolina has not created enough jobs to keep pace with

the growth of the workforce. As a result, proportionally fewer prime-age

adults (ages 20-64) are employed now than in 1990.

􀂄 This pattern is the opposite of the one that prevailed during the 1990s,

when job growth consistently outpaced workforce growth. If the 1990s

trend had continued, holding all else equal, there currently would be up

to 487,000 more positions on North Carolina payrolls.

􀂄 Sluggish job growth has contributed to the economic hardships facing the

state’s households. The failure to create adequate numbers of jobs has

resulted in relatively high levels of unemployment and underemployment,

which have held down wages and incomes. The result: stagnant or

declining living standards for working households.

􀂄 The 2008 recession has exacerbated these difficulties. Between January

and September, job creation in North Carolina essentially ground to a halt,

and unemployment climbed to a level reached on only one other occasion

since 1990.

􀂄 Even if the recession proves brief, North Carolina’s labor market likely will

limp through 2012 and perhaps even longer if the rebound is a “jobless”

recovery marked by relatively high unemployment and stagnant wages.

The recovery following the 2001 recession was a jobless one in which few

households experienced few tangible improvements in their well-being.

􀂄 Both federal and state actions are needed to recover from the downturn,

renew broadly shared economic growth and rebuild pathways to

opportunity. The federal government must take the lead and make the

large-scale investments needed to aid struggling households and stimulate

the larger economy. Meanwhile, state leaders must avoid making the

situation worse must by attempting to “cut” their way to a balanced

budget.

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