Listen to any politician talk these days and they will tell you that their number one concern is jobs, jobs, and jobs. Unfortunately, their concern has not translated into higher employment numbers. North Carolina’s unemployment rate increased to 10.3 percent in August, as 471,319 North Carolinians are currently out of work. Macon County’s numbers are also bleak, with unemployment increasing from 10 percent in July to 10.3 percent in August. A listed 1,613 Maconians were out of work in August, compared to 1,577 people in July. Macon County’s unemployment rate has increased nearly one percent since August of 2010.
As for Jackson County, they are one of only six western North Carolina counties that saw a drop in unemployment numbers, going from 8.8 percent in July to 8.4 percent in August.
“I’ve been looking for work every day for the past month,” said Franklin resident Rob Carlucci. As a father of two, Carlucci is struggling to find consistent work in the tough job market. “I’ve been fortunate in finding some odd jobs here and there and I’ve put in a lot of applications over the past few weeks, but I can’t find a permanent job anywhere and it’s frustrating. I recently applied for a maintenance job for a company in Sylva that seemed promising, so I’m hoping to catch a break.”
The latest jobs report from the U.S. Department of Labor was grim, showing no job gains for the month of August and the national unemployment rate stubbornly remaining at 9.1 percent. The non-partisan Congressional Budget Office predicts that the unemployment rate will remain above 8 percent until 2014.
The unemployment rate does not fully capture the true condition of our economy, as many Americans know. The U.S. Labor Department estimates that about 2.6 million Americans have stopped looking for work, and another 8.8 million are part-time workers seeking full-time employment. If you combine the number of unemployed Americans with the number of underemployed workers and people who have stopped looking for work, the unemployment rate exceeds 16 percent; and may be even higher.
Data from the U.S. Labor Department showed that private sector employers added 17,000 jobs in the month of August, but those numbers were offset as government jobs decreased by about 17,000. The construction industry continues to suffer as well, losing 5,000 jobs last month, largely caused by enormous problems that continue to plague the housing industry.
“We are still hoping to see some improvement in the construction industry,” said Macon County Employment Security Commission Manager Dale West. “I think any improvement in the construction industry, especially in this area, would go a long way in helping Macon County. Unfortunately, we have not seen the type of improvement that we are hoping for. Hopefully that will change,” she said.
Scott Hamilton, President and CEO of Advantagewest Economic Development Group, remains optimistic about future economic growth in western North Carolina. “We saw some economic development projects in the region stall during and immediately following the debt ceiling debate, and access to capital is still hard to get, but I am still optimistic. We have a lot of projects in the making, initiatives targeted at creating entrepreneurial development at the grassroots level,” said Hamilton. Advantagewest is a non-profit public-private economic development group whose main focus is to market western North Carolina to potential investors and entrepreneurs.
“The major problem with the economy is idle capital,” said Western Carolina University Economist Dr. Stephen Miller. “Unfortunately, many economic models treat capital goods as fungible and transferable goods that can be moved easily from one sector to another. But just before the recession began, for example, the construction industry was booming. Builders bought up lumber, copper wire, concrete, etc. Now home prices have fallen and in many areas are still falling. So how can bricks and lumber be put to other uses, especially if they were put into half-built homes and developments? They can't, not without a lot of value being lost in the process. Entrepreneurs will take advantage of low prices and create value wherever possible. The problem with propping up home prices is that it prevents that reallocation from happening, and recovery takes far longer than it otherwise would,” said Dr. Miller.
The declining housing industry is worrying many economists, mainly because of how it is affecting our economic recovery. The private sector is not the only component negatively affected by declining home prices. Local governments across the nation could be facing a precarious situation in the near future, as most of their revenues emanate from property taxes.
“Home prices are falling, and assessments are reflecting that fact,” said Dr. Miller. “I purchased a home in May 2010. Soon after I bought it, I was given a tax assessment that was $95,000 more than the purchase price. To be fair, Jackson County re-assessed my home's value this year. Now the taxed value is only $65,000 over the purchase price. To avoid the problem in the future merely requires a little foresight. Home prices have fallen, but are still higher than they were ten years ago. If the housing market is booming, and tax assessments are rising rapidly, so far as I know, there is nothing preventing county governments from running surpluses to make up for years where assessments fell. The answer is simply not to treat higher revenues during boom years as a permanent windfall,” he said.
Employment data continues to disappoint dogooders seeking public-sector careers and blue collar Americans seeking construction work. The news is not all bad, however. People actively looking for work will have a greater chance of success pursuing careers in the health-care and business/ financial industries, as they added a combined 57,700 jobs during the month of August, which was really the only good news emerging from the latest jobs report provided by the U.S. Labor Department.
When asked what local governments in western North Carolina could do to stimulate economic growth in their communities, Dr. Miller said “local governments should consider how entrepreneurs' costs of compliance with local zoning laws, ordinances, permitting laws, etc. can be reduced and streamlined. Most regulations exist to protect incumbent firms from competition, but are defended with the rhetoric of protecting consumers. But there is no legitimate version of economics that says competition among firms harms consumers.”