Policy Points

29.12.2009 In the News, Policy Points Comments Off on NC’s Economy: 2009 in Review

NC’s Economy: 2009 in Review

In a recent cover story, The Asheville (N.C.) Citizen-Times reviewed the economic trends that buffeted North Carolina, especially its western region, during 2009 and asked what 2010 might hold for businesses, individuals, and communities. Along with other experts, the piece featured the perspective of South by North Strategies’  John Quinterno.

Said the article about the strength of an economic recovery:

“Unfortunately, although there have been signs of improvement in the economy, no one can say with complete confidence just when the bad times will end — or what the ‘new normal’ on the other side of the recession will be.

‘Talk of an economic recovery is exaggerated,’ said John Quinterno, head of South by North Strategies, an economic research and communications firm based in Chapel Hill. ‘I do think conditions are better than they were six months ago or a year ago. That’s not really saying much.’

And said the article about the current state of the labor market:

The figures understate the ills in the local job market as some people are not counted as unemployed because they have simply given up looking for work.

They also don’t reveal the psychological impact joblessness has on people in a culture in which, according to Quinterno, people tend to view being unemployed as the fault of an individual rather than reflective of problems in the economy as a whole.

Being without work ‘goes to people’s self-worth and dignity,” Quinterno said. ‘It’s nonmonetary, but it has a huge, devastating impact on people.’

29.12.2009 Policy Points Comments Off on Unemployment Claims in NC: Week of 12/5

Unemployment Claims in NC: Week of 12/5

For the benefit week ending on December 5th, 17,994 North Carolinians filed initial claims for unemployment insurance, and 192,669 individuals applied for continuing insurance benefits. Compared to the prior week, there were fewer initial and continuing claims. These figures come from data released today by the U.S. Department of Labor.

Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of 21,743 initial claims were filed over the last four weeks, along with an average of 190,762 continuing claims. Compared to the previous four-week period, both initial and continuing claims were higher.
graph1

One year ago, the four-week average for initial claims stood at 26,483 and the four-week average of continuing claims equaled 148,544.

The graph (right) shows the changes in unemployment insurance claims (as a share of covered employment) in North Carolina since the recession’s start in December 2007.

Although new and continuing claims appear to have peaked for this business cycle, the claims levels remain elevated and point to a labor market that remains extremely weak. Especially troubling is the high level of continuing claims, which suggests that unemployed individuals are finding it extremely difficult to find new positions.

23.12.2009 Policy Points Comments Off on Editor’s Note

Editor’s Note

Between December 24 and December 28, Policy Points will be on hiatus for the Christmas holiday. Regular posting will resume on December 29.

Thank you for your interest in the blog.

23.12.2009 Policy Points Comments Off on Fixing the Minimum Wage

Fixing the Minimum Wage

In a new briefing paper, economist Heidi Shierholz of the Economic Policy Institute summarizes the existing research about the federal minimum wage and calls for setting the wage equal to half of the previous year’s average wage of production and nonsupervisory workers.

Shierholz argues that such a step would restore the value of the minimum wage, prevent the value of the wage from eroding over time, ensure that workers benefit from productivity gains, offset various types of wage and income inequality, and bring the United States in line with practices in other advanced economies. Additionally, shows Shierholz, this practice would be consistent with those used in other social insurance programs like Social Security, Workers’ Compensation, and Unemployment Insurance and would produce more benefits than costs.

Specifically, the briefing paper calls for the following:

The FLSA should be amended so that on April 1, 2012, the minimum wage is set at 50% of the previous year’s average wage of production and nonsupervisory workers. This formula would likely result in a minimum wage of around $9.80 in 2012 (or around $9.00 in 2009 dollars).

On each April 1 thereafter, the minimum wage should be adjusted by the percent change in the average wage during the preceding year, in other words, indexed to the average wage.

Making the policy change effective in 2012 allows for intermediate steps to increase the wage in 2010 and 2011 as a phase-in period. These near-term wage increases will provide crucial economic stimulus at a time when the economy will likely be in the middle of a rocky recovery.

22.12.2009 Policy Points Comments Off on Around the Dial – Dec. 22

Around the Dial – Dec. 22

Economic policy reports, blog postings, and media stories of interest: