Since North Carolina effectively eliminated unemployment benefits last year for people unemployed 20 weeks or more, the state has become a symbol in the partisan wars over economic policy. People on either side of those wars have argued that it proves the economic advantages — or damage — of providing the long-term jobless with cash payments.
But digging into the data suggests North Carolina should really be a case study in people seeing what they want to see. Over the last year, the state’s economy has performed remarkably like the economy in nearby states.
North Carolina is more than a case study, too. It is a laboratory for the rest of the country, given that at the start of this year, the federal government eliminated all benefits for the long-term unemployed. Both political sides have looked to North Carolina for evidence to bolster the positions they have taken in this debate.
Republicans, who voted against extending unemployment benefits, argue that ending benefits will spur the long-term jobless to look harder for work; with more eager workers, employment will rise, conservatives say. Democrats, many of whom voted to continue jobless benefits for the long-term unemployed, say that ending benefits will force the unemployed to cut their spending, which may have broader ripple effects that could slow the labor market recovery.
My reading of the North Carolina experiment is that it provides little support for either side. ...
I've written a lot about how environmental policy shouldn't be measured by how many jobs it creates or destroys (the only measure of a policy's effectiveness these days, it seems) because it doesn't have much effect. Apparently, unemployment policy shouldn't be measured that way either! And if you don't believe this conclusion from a professional economist, a Raleigh journalist figured out the same thing about a week ago:
... North Carolina’s experience is hardly extraordinary. It fits into what has been going on in the region.
I looked at what was happening during the same period in three states, in part because the U.S. Bureau of Labor Statistics has an interactive chart comparing North Carolina, South Carolina and Georgia over time.
If the unemployment law changes were spurring people to go back to work, you would expect a major difference between North Carolina and its neighbors. But that wasn’t so.
As North Carolina’s unemployment rate dropped from last July’s 8.1 percent to June’s 6.4 percent, South Carolina’s rate dropped from 7.7 percent to 5.3 percent. Georgia’s declined from 8.3 percent to 7.4 percent.
So North Carolina’s unemployment picture has been pretty much performing like that of its neighbors, rising and falling as the recession came and went.