Think tank says better state incentives needed

By John Henderson

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A think tank whose stated mission is to end poverty in North Carolina wants the state to help pay salaries for businesses that hire new workers in the Twin Counties.

The N.C. Justice Center wants lawmakers to dip into state coffers to help businesses in counties with high unemployment rates like Nash and Edgecombe.

Alexandra Forter Sirota, policy analyst with the center’s Budget & Tax Center, said in a press release that Rocky Mount and Hickory continued to experience the highest metro jobless rates at 12.7 percent and 12.6, percent, respectively, in the latest August numbers that were released this week.

“With persistent joblessness and poverty in some pockets of the state, more action from state leaders is needed,” she states. “Policies such as wage subsidies and local hiring initiatives should be part of the discussion.”

She added that as more workers leave the labor force, it will put more pressure on the unemployment rate.

“This suggests that North Carolina could continue to experience increases in the unemployment rate through the rest of 2010 and into 2011,” she said in the release.

In a telephone interview on Friday, she said even though the state is strapped for cash, there are funds being spent now on ineffective job-creation programs that should be diverted to this cause.

The latest unemployment numbers show that unemployment rates dropped in 82 of 100 of North Carolina’s counties in August.

The rates also dropped in Nash and Edgecombe counties, but only slightly, and the overall rate remains high.

The unemployment rate in Edgecombe County in August was 14.5 percent, down from 14.8 percent in July.

The unemployment rate in Nash County was 11.8 percent in August, down from 12.2 percent in July.

The jobless rate for the Rocky Mount Metropolitan Statistical Area was 12.7 percent, the highest of the state’s 14 areas.

Jeff Shaw, director of communication for the N.C. Justice Center, said the state would be making a good investment supplementing the salaries of new hires in areas like Rocky Mount.

People who are working pay state income tax and spend their money in the local economy, helping other businesses, he said.

“We feel like over the long term, it would be a net positive (to state coffers),” he said. “We call it the multiplier effect. We also feel like putting money in the hands of low-income people is the most effective way to stimulate the economy.”

North Carolina’s unemployment rate decreased to 9.7 percent in August. The rate was 9.8 percent in July and has decreased for six straight months.

“The August data showed improvement in job growth,” said ESC Chairman Lynn R. Holmes in a prepared statement. “Several employment sectors experienced an increase in jobs. While local education accounted for most of the job growth, there was an increase of 4,800 jobs in the private sector. We are beginning to see growth in the professional and business services and manufacturing sectors.”

Steve Rogers, manager of the Employment Security Commission office in Rocky Mount, said the unemployment numbers still are high but reflect a gradual improvement.

“It’s the same trend we have been seeing for the past couple of months,” he said. “Its better than August a year ago as far as the number employed.”

He said about 1,000 more people were employed in Rocky Mount in August 2010 than August of 2009.

“But we are still lagging behind the number employed in 2008, so we still have a ways to go,” he said.