Unemployment Rate Goes Up Because of State Budget Cuts

Headed in the wrong direction

According to recently released data, North Carolina's unemployment rate rose to 9.9% in June. As the N.C. Budget and Tax Center reports, this increase was fueled by state government job losses, which are expected to get worse as the new Republican state budget takes effect:

“We can draw a direct line between this rise in unemployment and the loss of public sector jobs,” said Alexandra Forter Sirota, director of the NC Budget & Tax Center. “As state job losses continue to mount, we will likely see more pronounced economic effects throughout North Carolina.”

The jobless rate rose two-tenths of a percentage point from May to June. During that time, 7,600 jobs were lost in state government.

The increase in unemployment claims was driven by the loss of jobs in local and state education.

North Carolina has lost 7.2 percent of its jobs since the beginning of the recession in December 2007.

“We’re now seeing the short-term impacts of de-funding vital public investments,” Sirota said. “Over the long term, the economic ripple effect from lost investments in education and job creation will become clear as well.”

When it's all said and done, the new state budget could cost 30,000 North Carolinians their jobs. Those are people who will have to draw unemployment benefits, who will be unable to spend money to support local businesses, who may not be able to afford to stay in their homes, and whose families and communities will suffer the consequences of the Republican-controlled legislature's cuts-only approach to a balanced budget.