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April 24, 2009

Why is North Carolina's unemployment rate so high?

North Carolina's unemployment rate hit 10.7 percent in February, the highest since modern statistics have been kept. We now have the fourth highest jobless rate in the nation. Why has this happened? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Just to add fuel to the fire, our unemployment rate has doubled since the recession began. I think there are several reasons for this. One, I think prime reason is despite what many people think, we are still very much a manufacturing state, more so than the nation. In fact, 20 percent of our state income is derived from manufacturing versus 12 percent for the nation. Manufacturing always gets hit harder during recessions for one simple reason: people can postpone buying manufactured products. The second reason; this recession has particularly hurt financial services, the vehicle parts industry and construction . . . these are all sectors in which we have a large number of people employed. We're also continuing to see downsizing of our traditional industries of textiles, furniture and tobacco. And I think our low unionization rate is a factor here. That makes it easier for firms to let workers go. On the other hand, when the economy does recover, and we begin hiring again, I think our low unionization actually helps attract jobs."

Posted by Dave at April 24, 2009 08:10 AM