Lost workers

Date posted: December 24, 2010

The state’s unemployment rate fell from 9.7 percent to 9.6 percent recently. But there is cause for concern in the state’s most recent job report, says N.C. State University economist Mike Walden.

“The same report from which the unemployment rate is calculated … showed, however, that there are 5,000 fewer jobs. And so how can it be that we saw a drop in jobs and a drop in unemployment rate? Well, this comes back to our unfortunate old friend, the discouraged worker.

“And again to repeat something that we have talked about before, to be counted as unemployed someone has to be without a job, wanting a job but actively looking for a job. If they stop actively looking for work, they are not actually counted as unemployed. And during that month when we saw that slight downtick in the unemployment rate, actually 12,000 people who were unemployed before dropped out of the labor force. And in fact over the past year we have had 53,000 people in North Carolina drop out of the labor force.

“Now some of them may have gone back to school to get additional training. That’s good, but my guess is many of them have simply given up looking for work because they can’t find work and certainly that’s bad. And actually if you took those 53,000 people … and added them to the unemployment ranks our unemployment rate right now in the state would be 10.6.”

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