Mike Walden's You
Decide: Is North Carolina's job market back?
Dr. Mike Walden
North Carolina Cooperative
North Carolina celebrated a major milestone
recently when the October labor market numbers were
released. The total number of jobs at businesses in
the state (“payroll jobs”) finally reached a level
that exceeded the total prior to the recession. In
October, there were 4,183,900 payroll jobs in the
state, exceeding the pre-recessionary high of
4,174,500 set in early 2008. Payroll jobs hit a
recessionary low of 3,839,200 in February 2010.
Yet it’s been a long road back, taking 6 ½ years to
get past the previous job peak. This was longer than
the 5-year job recovery period for the early 2000s
recession and the 2-year job recovery period for the
early 1990s recession. Of course, the same jobs lost
haven’t necessarily returned – there is always a
“churning” of jobs, even in the best of times.
Also, the state’s population, as well as the number
of people wanting to work, has increased since 2008.
The various measures of the unemployment rate, which
differ by who is classified as unemployed, all have
dropped since 2010, but are still higher than in
Still, the return of jobs in North
Carolina is something to cheer about. But this
achievement should not be interpreted as meaning
there are no issues in the job market. There are
issues, and they are centered on three areas: pay,
missing rungs in the income ladder and technological
Although jobs have come back,
pay and income have not. Average hourly earnings for
private sector jobs in the state, adjusted for
inflation, are down 2 percent since 2008. Even more
troubling, average (median) income for households in
North Carolina, also adjusted for inflation, was 9
percent lower in 2013 than in 2008.
climb up the income ladder also has some broken and
missing rungs. One of the big challenges in recent
decades has been the slow growth in middle-paying
jobs. Indeed, this slow growth has continued in the
current job recovery. Since 2010 in North Carolina,
jobs in the three highest-paying economic sectors
and jobs in the three lowest-paying economic sectors
have each expanded by close to 40 percent. Jobs in
the middle-paying sectors (manufacturing,
government, construction and education/health care)
have increased at half that rate, at near 20
Both of these labor market
concerns – pay and slow growth in middle-paying jobs
- are related to the third issue, technological
unemployment. The concept refers to job losses
stemming from new technology and machinery.
Technological unemployment is not new, but some say
it is accelerating and moving into new occupations.
Technological unemployment is a major reason
for the relative decline in middle-paying jobs. Many
tasks performed by workers in the factory have been
taken over by machines. The same is true in
construction and even retailing and sales.
Now there’s the likelihood that modern machinery and
technology will ultimately replace workers in other
sectors. Live video-supplied lectures to college
classes may take the place of on-site instructors.
Orders at restaurants can now be taken by computer
“tablets” instead of by waiters and waitresses.
Robots may soon be able do the stocking as well as
the check-out in supermarkets. Some futurists worry
there just won’t be enough jobs for people in the
None of these issues is
unique to North Carolina, but we, like our national
counterparts, would like the issues addressed. If
there are answers, they will likely focus on two
areas: the creation of new industries and a revamped
educational system to rapidly respond to changing
In the past, new industries
have “saved the day” when technological unemployment
released labor needs in existing industries.
Factories hired workers no longer needed on the
farm, and employment in services and information
technology ramped up as manufacturing was downsizing
its use of labor. We need to make sure we have an
economic environment encouraging the development of
new industries that can employ workers who lose
their jobs due to technological unemployment.
At the same time we need a rapid-response
educational system that can quickly retrain
individuals for the skills needed in our
fast-changing economy. We need a system that can
impart new skills in months, rather than years.
Apprenticeships, skill certificates and fast-tracked
degrees may be the waves of the future in education.
Like the nation, North Carolina’s labor market
is a composite of pluses and minuses. We want to
encourage the pluses while addressing the minuses.
You decide how this can be done.
Dr. Mike Walden is a William Neal Reynolds Professor
and North Carolina Cooperative Extension
economist in the Department of Agricultural and
Resource Economics of N.C. State University’s
College of Agriculture and Life Sciences. He
teaches and writes on personal finance, economic
outlook and public policy. The College of
Agriculture and Life Sciences communications unit
provides his You Decide column every two weeks.
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