Using data, not rhetoric, JLF’s John Hood methodically and completely refutes liberals’ accusations that the legislature and governor were wrong to exit the federal extended unemployment benefits program. In fact, they got it right — and North Carolina has now begun to reap the benefits of greater opportunity for all.
First, the frequent — and wrong — claims from liberals, per Hood.
Citing the decision and several other “outrages” by the state’s first Republican-led government since Reconstruction—such as adopting a pro-growth flat tax, clearing out the state’s regulatory thicket, and rejecting ObamaCare’s Medicaid expansion—left-wing critics subjected the Tar Heel State to months of invective and ridicule.
Within the state, the so-called Moral Monday movement drew thousands of protesters to the capital on a nearly weekly basis. Hundreds of arrests were made for violating the rules of the state’s Legislative Building. Outside the state, liberal media outlets excoriated North Carolina for ending extended benefits. New York Times columnist Paul Krugman called it a “war on the unemployed.” Even some conservative columnists and policy analysts criticized the decision as unwise and inconsistent with the principles of their new “reform conservatism” movement.
And now, the facts, per Hood.
More important, broader measures confirmed that North Carolina’s labor-market gains after leaving the extended-benefits program weren’t statistical quirks. In addition to the standard unemployment rate released every month (U-3), BLS computes annual averages for unemployment rates that include discouraged workers (U-4), all other marginally attached workers who have stopped looking for jobs (U-5), and people working part time who would rather have full-time jobs (U-6). By each measure, North Carolina still experienced one of the nation’s largest drops in unemployment.
Furthermore, the decline in North Carolina’s labor force didn’t last. By early 2014, it had bottomed out and begun to rise. As of May, the most recent month of BLS data available, North Carolina’s labor force is down only 0.04% from June 2013. During the same 11-month period, the nation’s labor force dropped 0.1%.
North Carolina has also continued to add jobs at a healthy clip. According to BLS data, from June 2013 to May 2014, the state’s employment-population ratio—which takes both labor-force participation and population trends into account—rose at a rate three times the national average.
Still not convinced that leaving the extended-benefits program encouraged both job creation and job acceptance? As of Jan. 1, 2014, the extended-benefits program expired nationwide. Yet there has been no sudden exodus of discouraged workers to the fringes of the national economy. Both job creation and household employment are up. The nation’s employment-population ratio was 58.9% in May, up from 58.6% in December. The labor-market effects of reforming unemployment insurance may not be massive. But they certainly don’t appear to be negative.
Liberals can whine all they want, and they can spew ugly allegations all they want. None of it changes the facts: North Carolina’s transformation is underway, and we have the reform-minded legislature and governor to thank for it.