Decker's comments on unemployment drawing criticism of accuracy
RALEIGH — North Carolina Commerce Secretary Sharon Decker says efforts to reduce the state's stubbornly high unemployment rate are being hampered by too many people without jobs moving here to seek work.
But the economist whose research was cited as Decker's source for the claim said she is relying on data that is now three years old and should not be used to draw conclusions about what is currently driving the unemployment rate.
Decker made the comments Tuesday to a women's commercial real estate group in Charlotte. According to The Charlotte Observer, Decker said the state has had problems lowering its percent unemployment rate because North Carolina attracts people looking for work. The state is also suffering because of a gap between the skills workers have and the skills employers require, she said.
"That's driving this headwind that we're always sort of butting against," Decker said.
North Carolina's unemployment rate for August, the most recent data available due to the recent federal government shutdown, was 8.7 percent — the sixth-highest in the nation.
Asked for data that supported Decker's claim that North Carolina's recovery was being slowed by jobless migrants, Commerce spokesman Josh Ellis provided a May 2012 column written by North Carolina State University economics professor Mike Walden.
Walden's piece attempted to explain why job losses in North Carolina at the height of the recession outpaced the national average. He relied on Internal Revenue Service data from 2008 to 2010 showing the net movement of households to North Carolina from other states during that period was five times higher than the average for all states. Some of these new residents likely did not find jobs, Walden suggested.
Walden also noted that manufacturing is still much more important to North Carolina's economy than it is for the average state, and that the manufacturing sector was among those that took the biggest hit during the economic downturn.
He estimated that those two factors could account for about 2 percentage points of the state's peak unemployment rate 11.4 percent at the height of the recession. However, in the same 2012 piece Walden suggested those newly arrived households might help fuel a faster recovery as the economy rebounded.
Asked Wednesday about Decker's comments, Walden said his prior research based on the 2008-2010 data should not be used to draw conclusions about the current pace of recovery. Similar IRS data on jobless relocations during 2013 won't be available for many months, he said.
"My research was looking at why (North Carolina's unemployment rate) went from essentially the same as the national rate prior to the recession and we ended up about a percentage and a half above the peak rate at the height of the recession," Walden said. "Since then, both North Carolina's rate and the national rate have come down pretty much in tandem."
The national unemployment rate is 7.3 percent.
Ellis, the commerce spokesman, pointed to U.S. Census Bureau estimates showing that more than 122,000 people moved to the state between April 2010 and July 2012, the 4th highest rate of migration in the country. That census data does not say how many of those people move for new jobs or quickly found work after their arrival, but Ellis said it is a "reasonable assumption" that many are unemployed.
"States with higher migration generally have higher unemployment," Ellis said. "That's not necessarily a bad thing. You want to have people moving to your state."
Decker said Tuesday the administration of Gov. Pat McCrory is taking several approaches to combating unemployment and create new jobs. The state is in the process of creating a public-private partnership to take over efforts to market North Carolina to companies seeking to relocate or expand. McCrory has said the change will allow the state to be nimbler and more aggressive in pursuing corporate relocations.
In June, North Carolina became the first state disqualified from a federal compensation program for the long-term jobless after McCrory and the Republican-dominated state legislature cut the maximum benefit by 35 percent, to $350 a week.