No jobs = no economic recovery

No jobs = no economic recovery

The official end of the Great Recession was marked by economists in June 2009 but more than twenty-four months later there has been little improvement in the jobs picture. Last month, according to the latest data from the Employment Security Commission, North Carolina’s job deficit – a measure of the jobs needed to make up what was lost in the Great Recession and keep pace with the growth in the working-age population – topped half a million.

The lack of job growth – and the lack of attention to it by policymakers in recent months – affords little distinction between recession and recovery for North Carolina’s working families. Without work, or, conversely, with lower pay and less access to benefits, families across the state continue to struggle to make ends meet.

It didn’t have to be this way. North Carolina policymakers’ attention to the jobs deficit could have at least caused them to hesitate in taking a cuts-only approach to the budget, thereby curtailing further loss to the state’s employment base. Policymakers should also have considered the ways in which families’ struggles impact local economies and the broader trajectory of growth and in so doing invested in supporting families working for low-wages.

For North Carolina, the official economic recovery has been worse for some than others. Men have found jobs while women have continued to lose them, mainly because of the significant loss in state and local government employment. Workers of color have continued to experience double-digit unemployment while the lack of geographically accessible job opportunities has led to long-term unemployment and persistent underemployment.

Meanwhile, national data demonstrate that corporations have experienced record growth in profits, contributing the greatest share to the national income since measures were collected in the early part of the last century.

Such uneven recovery could translate into a further unequal and unstable economy in the future if policymakers don’t pay attention to policies that include more North Carolinians in the recovery.

Official economic recoveries without job creation have become more common since the 1990s recession. The result for workers is persistent unemployment that negatively impacts both their lifetime earnings and their near-term wellbeing in such areas as the consumption of healthy foods, their physical health and their children’s development.

It is not only critical to workers that policymakers refocus on jobs and the jobs deficit, but it is also essential to the broader economy and the state’s fiscal situation. Immediately working to directly create good, quality jobs and support the private sector’s job creation is the first step. Maintaining a strong unemployment insurance system that can serve as a “counter-cyclical” force in economic downturns and support workers without jobs until the jobs reappear is fundamental to sustaining forward momentum in the recovery.

Investing in supports, like the Earned Income Tax Credit and child care subsidies, which minimize economic hardship and encourage full participation in the economy, should be an ongoing commitment.

Without broadly shared prosperity, it will be impossible to sustain the educated workforce, an efficient and competitive business climate and community wellbeing that public structures help build.

Alexandra Forter Sirota is the Director of the N.C. Budget and Tax Center.