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Published Thursday, May 31, 2001
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2 N.C. areas lead jobless rate rise

Data predates recent layoffs, debunks `recession-proof' myth

Staff Writers

A new report shows the slowing economy is hitting jobs in North Carolina and the Charlotte area harder than economists thought.

Unemployment figures released Wednesday reveal that among the 51 largest metropolitan areas, the Greensboro/Winston-Salem area recorded the biggest increase in its unemployment rate since last year, from 2.4 percent last April to 3.8 percent this April.

The Charlotte-Gastonia-Rock Hill area followed with the second-highest national increase, from 2.6 percent to 3.7 percent, according to the U.S. Bureau of Labor Statistics.

Among all 331 metropolitan areas, the Hickory area's unemployment rate increase - 1.9 percent to 4.5 percent - was second-highest in the nation, behind only Gadsden, Ala.

The general sentiment had been that North Carolina and the South were recession-proof, especially because of the influx of new residents and businesses. But the new figures prove otherwise, said Michael Walden, an economics professor at N.C. State University.

"It's the jump that's such a big surprise," said Michael Wald, regional economist for the bureau. "It's such a rapid turnaround. It's like hitting on the brakes, but hitting on them really hard."

Even more surprising, Wald said, is news that North Carolina's jobless rate increased more than any other state since last April, rising from 3.4 percent to 4.9 percent, according figures released earlier this month. That translates to 60,400 more people without jobs, for a total of 177,100 people collecting unemployment checks.

North Carolina's jobless rate is now above the nation's average of 4.5 percent. South Carolina's rate in April was 4.3 percent, up from 4.0 percent a year ago.

North Carolina is hurting more than other states - with the exception of some Midwestern states in similar situations - because it's losing so many manufacturing jobs, particularly in textiles. Companies have been cutting workers and production to match falling sales and to clear bloated inventories.

In just one week this month, N.C. textile companies announced cuts of more than 2,400 jobs - and those aren't even included in the numbers released Wednesday.

In manufacturing, the slowdown is hurting a new sector of jobs, besides the usual suspects of textile and tobacco. Now the downsizings are in durable goods, such as automobile parts and industrial machinery, Wald said.

Employment in N.C. businesses that make textile products has dropped 14.5 percent over the past year to 134,900 jobs, and employment in durable goods has dropped 12 percent over the past year to 373,900 workers, according to the Employment Security Commission.

The financial services industry, one of Charlotte's and Winston-Salem's anchors, also took a hit as investors became less interested in the suddenly sour stock market, said Walden, the economics professor.

But the economic picture isn't all bleak. Local unemployment rates are still relatively low. Economists used to believe that 5 percent unemployment meant the job market was saturated, though in the roaring '90s unemployment rates dipped far below that, Walden said.

And while North Carolina is losing more manufacturing jobs than it's gaining, overall it's still creating more jobs than it's losing. As of April, the state had 1.2 percent job growth over a year ago. It saw more jobs in areas such as the services industry, government and construction, according to the labor bureau.

Wald, of the bureau, said that what's most shocking is how quickly the employment picture has changed in some areas of North Carolina.

Just a year ago, the Hickory area enjoyed record-low unemployment. The hand-wringing then was over how to find more workers. But a growing list of furniture, textile and fiber-optic cable companies have all announced major layoffs or plant closings. Almost half of all jobs in the Hickory area are in manufacturing, one of the highest concentrations in the nation.

The impact of the layoffs can be seen from long lines in unemployment offices to prayer lists in churches for families hoping for work.

Other sectors in the Hickory region continue to thrive, including construction and service work. And experts believe some of the telecommunications and furniture jobs will eventually return.

Still, the area is expected to keep one of the nation's highest unemployment rate increases for several more months, as additional layoffs kick in.

Many of the older laid-off workers wonder where they can find new jobs after having worked in factories all their lives. Some younger workers are taking advantage of state retraining programs that pay tuition at community colleges.

Danni Barnhardt, a 30-year-old mother of two, lost her job at the Matsushita compressor plant in Mooresville about a month ago, after the company decided to move production to Asia. She considers it a stroke of fortune.

Soon after, Barnhardt enrolled in nursing classes, and the state is covering the cost. Her husband, who also was laid off from Matsushita, began working at another factory in Davidson to support the family while she goes to school.

After Barnhardt graduates in two years, her husband hopes to go through a similar retraining program to follow his dream to become a chef.

"I thought I was going to stay in that factory for the rest of my life," Danni Barnhardt said, "but now I'm getting to do my life's dream." "It's the jump that's such a big surprise It's such a rapid turnaround. It's like hitting on the brakes, but hitting on them really hard."

Michael Wald
U.S. Bureau of Labor Statistics


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