02.18.2014 Policy Points

Unemployment Insurance And The Labor Force

From an op-ed written by John Quinterno of South by North Strategies, Ltd. and Dean Baker of the Center for Economic and Social Policy that recently appeared in the pages of The (Raleigh, NC) News & Observer

Some supporters of the [unemployment insurance] insurance cuts have pointed to a separate survey of establishments conducted by the U.S. Bureau of Labor Statistics that shows some uptick in the pace of job growth in the months following the changes. In this survey, the state netted 51,400 payroll jobs between June and December. And North Carolina ended 2013 with 64,500 more jobs (1.6 percent) than it had a year earlier.

On closer examination, these numbers really don’t provide much evidence that the cuts to the insurance system spurred job growth. During 2013, North Carolina gained jobs at an average monthly rate of 0.1 percent, compared with a rate of 0.2 percent during 2012 and no different from the 0.1 percent average monthly rate recorded in both 2010 and 2011. Between June and December 2013, the state netted an average of 5,400 jobs per month, compared with 7,500 jobs per month in 2012. North Carolina’s problem therefore remains the same as it has been for several years: an anemic recovery.

If the point of cutting unemployment insurance compensation was to get people back to work and spark job growth, North Carolina’s policy choice appears, at first glance, to be a failure. If the point was to push people out of the labor force, it appears to be working.

Click here to read the full op-ed on the original web site.

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