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A Turn For the Better? Experts say people may have quit looking
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Published: October 24, 2009
"Less bad is good" has become the economic mantra of 2009, particularly when it comes to the job market.
For example, the work force in the Winston-Salem metropolitan statistical area has declined by 2.8 percent, or about 6,000 jobs, since September 2008, the N.C. Employment Security Commission reported yesterday. The MSA is comprised of Davie, Forsyth, Stokes and Yadkin counties.
Those figures don't count the bulk of the 300 local jobs eliminated last month at Pace Airlines Inc., or the 905 jobs going away with the closing of the Dell Inc. assembly plant in mid-January.
Yet, as negative as those numbers appear, the Winston-Salem MSA has experienced the lowest percentage of job losses of the state's 14 MSAs over the past 12 months.
Which is why economists and employment officials are cautioning not to make too much of the fact that the Triad's unemployment rate reached a seven-month low of 10.9 percent in September. The rate hit at least a 41-year high of 11.7 percent in June.
The jobless rate for the Winston-Salem MSA slipped from 10 percent to 9.8 percent, while Forsyth's rate decreased 0.3 percentage points to 9.5 percent.
"I would feel much better about the sustainability of the downward direction we are seeing in the rate of unemployment if sectors of the economy other than government were adding jobs," said Archie Hicks, the manager of the commission's office in Winston-Salem.
The Winston-Salem MSA had a net gain of 1,300 jobs during September, including 2,800 in government. Most teachers are counted as unemployed by the commission when they are between annual contracts.
Every other major employment sector decreased during September, including 400 jobs each in professional and business services, and leisure and hospitality.
"All other factors remaining the same, we would expect to see the rate go up by 0.5 percentage points in the Winston-Salem MSA as a result of recent and expected closures," Hicks said.
Most economists and employment officials say that the rate decline likely has come more from people dropping out of the work force -- who are then not counted by the commission -- than from significant job creation.
Some economists have said that if the underemployed -- those working in jobs below their skill level for the sake of earning a paycheck -- the stay-at-home parent, the retiree and the discouraged are factored into the jobless rate, it could be as much as 2.5 percentage points higher.
"The discouraged-worker syndrome is at work," said Tony Plath, a finance professor at UNC Charlotte.
"There aren't many desirable jobs out there for people to return to the labor force at anywhere near their former salary or wage," Plath said. "We've extended unemployment benefits a few times, so that takes the heat off of the immediate need to find a job."
Because of those factors, people "are rationally postponing the decision to search until we're a little farther down the recovery road and the prospects for new employment at or near your old wage are a little bit better," he said.
The job market is likely to remain relatively sedate well into 2010, said Peter Tourtellot, the managing director of Anderson Bauman Tourtellot Vos & Co., a turnaround-management company in Greensboro.
"Specifically to this area, I do not see improvement in the existing job market until 2011," Tourtellot said.
"Housing, autos, retail, home values, credit for business will need to improve before we will see employment improvement," he said.
"Businesses will tend to be very cautious in adding employees until they see continued improvement in revenue."
rcraver@wsjournal.com | 727-7376
Moving lower
Eleven of the 14 counties in the Triad and Northwest North Carolina had lower unemployment rates in September. Overall, jobless rates fell in 76 of the state's 100 counties.
County - August* - September
Alamance - 12.1% - 11.8%
Alleghany - 11.2% - 10.9%
Ashe - 10% - 10%
Davidson - 13.1% - 12.5%
Davie - 11.6% - 12.1%
Forsyth - 9.8% - 9.5%
Guilford - 11.4% - 11%
Randolph - 11.3% - 11%
Rockingham - 12.5% - 11.7%
Stokes - 10.2% - 10.1%
Surry - 12.2% - 11.8%
Watauga - 7.1% - 6.9%
Wilkes - 12.9% - 12.9%
Yadkin - 9.5% - 9.3%
* Some August rates were revised
Source: N.C. Employment Security Commission
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