Capital goods - February 2012

Pointing fingers over idle hands
By Scott Mooneyham

In this down economy, politicians on both the left and right have tried to sell themselves to constituents as being all about jobs. In Raleigh, the stage has been set for a pitched battle over just that. But, with the elections looming, it won’t have much to do with creating jobs but who gets blamed for the lack of them — specifically, the state’s high unemployment and how budget cutting, and the subsequent layoff of government workers, factored into that.

There’s nothing new about jockeying over jobless figures, which analysts use to divine political fortunes. Last summer, when doubting Barack Obama’s re-election prospects was the sport of the moment, The New York Times noted that no president since Franklin Roosevelt had won a second term with unemployment over 7.2%. (The newspaper didn’t delve too far into history to show that four-termer FDR achieved that feat more than once, the first time with unemployment at 16.6%.) What’s new in Raleigh is that Republicans passed a state budget over the objections of a Democratic governor. When legislators overrode Beverly Perdue’s veto, it didn’t take long for the wailing and gnashing of teeth to begin. Her office forecast losses of thousands of state and local government jobs, pointing a finger at the Republican-penned budget cuts. By November, Republicans were wagging their own fingers, citing numbers from Perdue’s budget office that put state-employee layoffs at 1,629, which GOP budget writers said was necessary to close a $2.5 billion gap.

“The wild allegation had been that 30,000 jobs were affected,” says Sen. Richard Stevens, the Cary Republican who was that chamber’s chief budget writer. “That was never the intention.” Intent or not, critics responded that the budget office’s tally didn’t take into account teachers and other local-government employees that were laid off because of discretionary cuts imposed by the state. Just before the holidays, House Speaker Thom Tillis warned that he planned to revisit the extent of those layoffs and make local school superintendents account for their spending and explain why any teachers were let go. Apparently the $460 million cut to public schools isn’t explanation enough.

This squabbling comes as North Carolina’s overall employment figure, as do so many of its residents, needs some work. Since Perdue took office in 2009, the state unemployment rate has never been more than a decimal point or two below 10%. The numbers aren’t substantially different from some other Southern states, but in November just four in the nation had worse.

The governor could point to improving numbers toward the end of 2010 through the spring of 2011. So what happened last summer, when the unemployment rate began rising again? Economists might blame the European debt crisis, but Perdue had a different explanation: a Republican-sponsored state budget that trimmed public-sector jobs. When unemployment in the state hit 10.5% in September and North Carolina led the U.S. with 22,000 job losses, administration officials were quick to point out that the number of nongovernment jobs had actually grown for a year. The Employment Security Commission (recently reorganized as the Division of Employment Security) showed that the private sector had added 28,400 jobs during the 12-month period, while public jobs fell by 18,700. (Never mind that 8,500 private-sector jobs disappeared during that month.)

As if there haven’t been enough dust-ups over jobless numbers, Perdue recently got caught up in controversy when a publication of the conservative John Locke Foundation questioned whether her reviewing figures before their release to the public violated federal policy. The piece showed that the governor is more than a little concerned about how the figures get spun. The numbers themselves, based on reports employers submit to the federal Bureau of Labor Statistics, aren’t a matter of dispute. A recent independent review found that North Carolina is in the minority of states that have lost government jobs in recent years. Despite the recession and declining state budgets, 30 have increased government employment since late 2006, with neighboring Virginia and Tennessee each adding more than 20,000.

So, with all these figures to back their competing claims, politicians will have plenty of ammunition to fire away with in 2012, and it’s a safe bet to presume that legislators and the governor will spend as much time parsing how each side uses them as they do working on ways to improve them. After all, it’s an election year. And as for the unemployed, they can always hope for a miracle in Greece.

Scott Mooneyham is the editor of The Insider, www.ncinsider.com.