Dallas Woodhouse and "Sonny"
Carolina Rising founder Dallas Woodhouse has a sunny message about North Carolina's economy under the state's Republican leadership, but economic experts raise questions about some of the claims. (Photo by Sue Sturgis.)

The shadows behind conservatives' sunny NC jobs claims

As protesters gathered outside the North Carolina legislature this week for Moral Monday, a counter-protester stood on the sidelines next to a young woman in a sun costume, handing out Sunkist sodas and yellow sun-shaped stress balls emblazoned with the cheerful message, "Jobs up, unemployment down."

The man was Dallas Woodhouse, former director of the North Carolina chapter of Americans for Prosperity, a conservative political advocacy group founded by the billionaire brothers behind the Koch Industries oil and chemical conglomerate. Woodhouse left AFP recently and now serves as president of Carolina Rising, a 501(c)(4) "social welfare" nonprofit he formed earlier this year.

The group, which is not required by law to disclose its donors, is aligned with the agenda of Republican Gov. Pat McCrory and North Carolina's Republican-controlled legislature. In his bio on the Carolina Rising website, Woodhouse touts his close relationship with McCrory, noting that in 2010 the two men worked together to block an ethics bill that would have expanded public financing of political campaigns, improved access to government records, and forbade elected officials from soliciting campaign contributions from industries they regulate.

Lately Carolina Rising has been promoting the economic policies of the governor and the legislative majority. As Woodhouse wrote in the press release announcing this week's counter-protest:

"As the protesters begin to realize the McCrory and legislative economic reforms are working these stress relievers provide these committed leftist [sic] a way to vent their frustration over being on the wrong side of the policy battles in North Carolina."

It's true that North Carolina has the nation's second-fastest-falling unemployment rate after South Carolina. Woodhouse pointed to recent jobs data that showed a drop in the unemployment rate in 99 of the state's 100 counties, which he attributed to cuts to taxes and unemployment insurance benefits.

Last year, state lawmakers and McCrory slashed the maximum weekly unemployment insurance payment by 35 percent and cut the maximum duration of benefits from 26 to 19 weeks. And by cutting weekly benefits, North Carolina was disqualified from a federally funded program to assist the long-term unemployed. Consequently, more than 100,000 North Carolinians lost their unemployment benefits sooner than they would have otherwise.

Woodhouse suggests these cuts to unemployment benefits pushed people back into the workforce. But economic experts raise questions about such claims.

In an op-ed published earlier this year in The News & Observer of Raleigh, economists John Quinterno of South by North Strategies in Chapel Hill and Dean Baker of the Center for Economic and Policy Research in Washington, DC noted that the dramatic drop in North Carolina's unemployment rate -- from 8.8 percent last June to 6.9 percent by December -- "did not come about because people rushed out and found jobs." After all, employment as measured by the household survey used to determine the jobless rate rose by only 1 percent over that period, they observed:

If people weren't finding jobs, why did the unemployment rate fall? It turns out that the legislature's prescription for lowering the unemployment rate worked through a different channel. Nearly 52,000 people were reported as "leaving the labor force" between June and December, meaning that they were no longer employed nor actively seeking work.

In fact, North Carolina ended 2013 with a labor force that had 111,000 fewer participants (-2.3 percent) than was the case a year earlier.

The decline in North Carolina's labor force has continued since then, though it has gotten smaller each month this year. An analysis released last month by the liberal NC Justice Center's Budget and Tax Center said this "suggests that unemployed workers who dropped out of the labor force in 2013 due to the lack of available job openings are starting to return to the workforce as the economy continues to slowly improve."

However, the Center's analysis also found that job growth in the state remains "anemic." At the current rate, it would take North Carolina another year to replace the 300,000 jobs lost during the recession and an additional eight years to create enough jobs to keep pace with the state's 10 percent population growth since 2007. And it would take some of the state's metro areas more than a decade to create enough jobs to return to pre-recession levels.

At the same time, the jobs that are being created are concentrated in industries that pay far less than the average state wage, the Center pointed out:

Just three industries accounted for 56 percent of the state's total job growth over the last year, and all of them paid significantly below the state's average wage of $20.40 per hour. Administrative and Waste Management accounted for 32 percent of all jobs created last year and paid just $14.83 an hour. Jobs created in Retail Trade accounted for 12 percent of the state's total employment growth and paid $12.28 per hour, while ultra-low-wage Accommodation and Food Services accounted for 13 percent of the state’s job growth and paid just $7.40 an hour.

"The last year has been a boom-time for ultra-low-wage work," said Budget and Tax Center policy analyst Allen Freyer. "As long as North Carolina keeps creating the lion's share of jobs in industries that pay poor wages, the strength of the state's long-term recovery will remain weak. A low-wage labor market simply doesn't put enough money into the hands of workers to adequately support local business growth. Low wages mean fewer customers and lower sales, which ultimately will put the brakes on hiring."

Meanwhile, North Carolina leaders are seeking further cuts to unemployment benefits. A bill introduced in the state House last month would cut the maximum number of weeks someone could receive benefits to just 14 -- the fewest in the nation. The change would apply to people who file unemployment claims after July 6.

Image: 
Carolina Rising founder Dallas Woodhouse has a sunny message about North Carolina's economy under the state's Republican leadership, but economic experts raise questions about some of the claims. (Photo by Sue Sturgis.)
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Republican agenda...

Fracking - passed

Duke Energy cleanup - passed right on to the NC taxpayer

Voter Fraud laws - passed (there isnt any!)

Unemployment benefits slashed - passed

Teachers, give up your tenure and I'll give you a one time raise - passed (NC teachers still among lowest paid in the nation)

NC Renewable Energy Stds - in process of repealing, wont be long - including a flat rate tax on residential solar panels

Medicaid Expansion - REFUSED, because of extreme views and policies - now NC TAXES GO TO OTHER STATES - the benefits of the Medicaid expanion stolen right out of the NC taxpayers pockets!

The sooner voters figure out these extreme partisan lawmakers, the better

NC unemployment

Last summer in South Dakota it seemed every other person I met had moved there recently from either North Carolina or South Carolina

Two Ways

There are two ways to get Carolinians off the unemployment compensation rolls. Find jobs for them, and expire their compensation benefits. It appears the latter tact is the aim of the current legislature.

By lowering the number of weeks of eligible unemployment benefits, they can get the unemployed off the register faster, thereby tossing them into the trash bin of forgotten workers.

It worked so well the first time, now they want to do it again. I suppose the legislature thinks it's a badge of honor to say you have the shortest period of compensation time in the country, just as they seem to like having the lowest paid teachers.

This will eventually come back to haunt the state as thousands upon thousands of capable workers are cast aside and forgotten. Look for poverty in this state to spike in the coming years.

How poor are our poor.

As Bill Clinton said "It all depneds on what your definition of is is". Poor people in America would be considered Middle class or wealthy in many parts of Europe or other parts of the world. You can make statistics say anything, but here are some hard cold facts about the "poor" in America form the evil Koch brothers run U.S. Census:

The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:

■Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
■Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
■Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
■The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
■Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
■Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
■Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
■Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher

So the bottom line is most of the world would do anything to be poor in America. The other misinformation in this class warefare waged by the liberal media is that the Rich are the same people in the same club. Untrue.

It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.

Yet while many Americans will experience some level of affluence during their lives, a much smaller percentage of them will do so for an extended period of time. Although 12 percent of the population will experience a year in which they find themselves in the top 1 percent of the income distribution, a mere 0.6 percent will do so in 10 consecutive years.

It is clear that the image of a static 1 and 99 percent is largely incorrect. The majority of Americans will experience at least one year of affluence at some point during their working careers. (This is just as true at the bottom of the income distribution scale, where 54 percent of Americans will experience poverty or near poverty at least once between the ages of 25 and 60).

More on the claims that the poor aren't really poor.

Readers should know that much of what the commenter shares here is from the right-wing Heritage Foundation. In fact, some of it is lifted directly without attribution. Here is the link to the original:

http://www.heritage.org/research/reports/2011/09/understanding-poverty-i...

For more about the Heritage claims, check out this piece from The Atlantic by Derek Thompson:

http://www.theatlantic.com/business/archive/2011/07/30-million-in-povert...

He concludes: "It's wonderful that even America's poorest have access to relatively cheap electronics that weren't available to even the world's richest a century ago. But that doesn't disqualify them from old-fashioned definitions of poverty. The necessities are still the necessities, and they're not getting cheaper. In fact, with inflation growing faster than wages today, and with health care, education, and housing costs historically growing faster than inflation, many of the things we consider necessities are becoming less affordable for America's poorest, no matter how many microwaves they have."

WOW

It turns out that the legislature's prescription for lowering the unemployment rate worked through a different channel. Nearly 52,000 people were reported as "leaving the labor force"

This has nothing to do with State legislature, this is a federal number from the U.S. Department of labor known as U-3. Same one that Obama uses to claim lower unemployment. So I guess it is OK when liberals do it.

As conservatives have been saying for years the U-6 number is what tells the truth. Which is currently at 12.3% nationally.

A little history in 4th QTR 2010 the U6 number for NC was 17.6, and it was 14.7 in 4th QTR 2013, and is 13.6% in 1st Qtr 2014. That is what is called a downward trend. These numbers come from the U.S. Department of Labor, not the NC legislature or the Koch brothers as you claim in your article.

Post # 2

Hi Sue: Here is the article I promised...

Labor info

Some pundits worry about the declining Labor Force Participation Rate, the percentage of people 16 and older who are either working or unemployed but looking for work.

Seasonally adjusted, it is 61.1 percent in North Carolina, according to the Division of Employment Security. When the recession started in late 2007, it was 65.3 percent.

The Republicans now running North Carolina’s executive and legislative branches like to point to the state’s dropping unemployment rate as proof that their economic policies are working. It has dropped from 10.4 percent in the beginning of 2011 to 6.2 percent in April, seasonally adjusted.

The unemployment rate looks at the percentage of people who are jobless but seeking work. People not working and not seeking work are not counted. They are not considered part of the labor force. So critics of the Republicans say the unemployment rate is going down because people are discouraged, leaving the labor force and are not counted in the jobless rate. They say the declining Labor Force Participation Rate is a more important number, because it reflects people who have given up hope about getting a job. At the start of 2011, the NC rate was 63.1 percent, so it has dropped two more percentage points. Aha! say the Republicans’ critics.

But a paper written by an economist at the Philadelphia Federal Reserve Bank argues that three things are largely responsible for the drop in the Labor Force Participation Rate, which is a national trend, not just in this state. Much of the drop nationally since the start of 2012, according to Shigeru Fujita, has come because of Baby Boomer retirements. Another longer-term trend has been increasing nonparticipation due to disability. Another reason is an increase in people in college.

Fujita writes: “...(I)t is true that there were more discouraged workers during the post-Great Recession period than before the recession .....However, the size of this group has been roughly flat since 2011. In this sense, it is misleading to attribute the decline in the unemployment rate in the past few years to discouragement. As I pointed out above, the decline in the participation rate since the beginning of 2012 is mostly due to retirement

Read more here: http://www.newsobserver.com/2014/05/29/3896594/ncs-declining-labor-force...

Just a couple of points to my friend sue

http://www.carolinajournal.com/daily_journal/display.html?id=11057

The labor force is reducing all across the USA because of baby boomer retirements. Still... From John Hood, who may be right of center but knows the numbers as goo as anybody....

In each case, North Carolina’s labor-market improvement was still either the best or second-best in the nation over the past year. For example, for the April 2013-March 2014 period, North Carolina’s U-5 rate — including all workers who have dropped out of the labor force for some reason — averaged 8.6 percent. During the previous 12 months, it averaged 10.8 percent. That’s a drop of 2.2 points, the largest in the country. The national average drop in U-5 unemployment was 0.9 of a point.

Here’s another way to present the same data. If you subtract U-3 from U-5, you get the share of each state’s labor force that consists of discouraged and other marginally attached workers. For North Carolina, that share was 1.4 percent for the period ending in March. The national average was also 1.4 percent. During the previous period (2012-13), 1.6 percent of North Carolina workers were discouraged or otherwise marginally attached. In other words, the rate of worker disengagement in our state is down, not up.

These trends may have policy implications. But I’ll leave them for another day. My point here is that if you persist in believing North Carolina’s tumbling unemployment rate is simply a quirk caused by discouraged workers dropping out of the labor force, you no longer dwell in the land of reality

Republican turd polishing at

Republican turd polishing at its finest, with a big smile and a handshake from Mr. Woodhouse. You can not trust them.

Low wage jobs.

Not only do these low wage jobs keep people from supporting local business growth, their contribution to government services via taxation is miniscule to non-existent, so they get hammered twice. It's cold-hearted 'starve the beast' ideology at play here, with more than a touch of racism thrown in for spite.

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