Triangle Chatter

A Closer Look at Employment Data Shows Positive Signs

Charles Hayes“Numbers are meaningless without leadership,” accountants like to say.

They’re right. Take unemployment rates: these important monthly snapshots make their way into news headlines, offering hope or despair to those searching for a better job – or any job. But are these figures a reliable measure when comparing the economic vitality of communities, regions, states or nations?

Let’s consider the latest batch of unemployment data released by the U.S. Department of Labor, which lists North Dakota as the state with the nation’s lowest unemployment rate -- just 3.3 percent.  Nevada, at the other extreme, has a 9.7 percent jobless rate. Do such numbers really suggest North Dakota’s economy is nearly three times stronger or better or more energized than Nevada’s? Doubtful.

To get a firmer read on relative economic performance, it is necessary to drill deeper into the data on workforce growth and job creation. Unemployment rates are based on two variables: the jobless count (the numerator) and the total labor force (the denominator). The monthly unemployment snapshot sheds little light on net job creation, the most immediate indicator of economic direction. Moreover, missing from the unemployment rate is any measure of increase in the labor force brought on by newly arrived job-seekers – be they recent college graduates seeking their first “real” job or dislocated workers from other states discouraged by prospects there. Similarly, states and regions suffering economic decline lose workforce, usually their best ones. While that leads to lower rates of unemployment, it’s not the preferred path economic developers and public officials want to take.

Let’s compare the Research Triangle Region’s economic performance during the last five years to that of the U.S. overall. Between February 2008 and February 2013, our region’s labor force grew by 7.1 percent. Nationally, the labor force increased by just 1.2 percent during the same period. Those here in the region actively employed grew by 3.2 percent while the total number of Americans working declined by 1.8 percent over that timeframe. [My staff has assembled a few tables below.]

We clearly outperformed the rest of the country in jobs and workforce growth. Still, as of February of this year, the Research Triangle Region’s unemployment rate of 7.9 percent was higher than the overall U.S. rate of 7.4 percent, suggesting – inaccurately – that we’re lagging.

Our region’s global reputation as a center for good jobs and promising businesses means that we’re on the receiving end of talent from all over the world. While many are recruited or transferred to our communities by their employers, others arrive here without a job offer in hand. They register with Division of Employment Security for leads in their chosen profession and interact with any number of private search firms like Experis or job-search websites such as Work in the Triangle. Some quickly find job offers. For others, the search may stretch longer – weeks or months. This artificially elevates our unemployment rate. Economists describe this trend as “importing” unemployment.

To a lesser extent, much the same thing can be said for all of North Carolina. Our state’s economic performance during the last admittedly anemic five years has been far better than our unemployment figure, the nation’s fourth highest, suggests. 

News of stubbornly high unemployment rates is nothing any of us wants to see. But when we delve deeper into those static numbers we see – in our region, at least – evidence of a job market and talent pool growing with more momentum and vitality than those of the country overall. Our success will continue to spur the expansion of the region’s well-educated labor force, which is the biggest draw for businesses serious about success in the Knowledge Economy.

 

Labor force, Feb 2008

Labor force, Feb 2013

Percent change

Research Triangle Region

978,453

1,047,582

+7.1

North Carolina

4,539,031

4,764,853

+5.0

United States

153,653,000

155,524,000

+1.2

 

 

Total Employed, Feb 2008

Total Employed, Feb 2013

Percent change

Research Triangle Region

935,072

965,180

+3.2

North Carolina

4,306,881

4,318,025

+0.3

United States

146,156,000

143,492,000

-1.8

 

 

Unemployment Rate, Feb 2008

Unemployment Rate, Feb 2013

Research Triangle Region

4.4%

7.9%

North Carolina

5.1%

9.4%

United States

4.9%

7.7%

Sources: U.S. Bureau of Labor Statistics; N.C. Division of Employment Security

Author: Charles A. Hayes, CEcD, President & CEO, Research Triangle Regional Partnership

Comments

  1. There are no comments yet.

Leave a Comment