County jobless stays low but region expected to spike amid recession

By Scott Nicholson

While Watauga County’s unemployment rate remains at or near the lowest in the state, regional job losses are climbing as the recession lingers.

Carol Coates, director of the High Country Workforce Development board, said the unemployment rate in a seven-county region was rising but had not yet reached a dramatic spike.

“I think our counties, for the most part, are not reflecting the times quite yet,” Coates said.

“The unemployment rate has been creeping up over time. It was 5.4 percent in January and is now 6.4 percent in our seven-county area, though Avery and Mitchell (unemployment rates) have gone down.”

Watauga’s October unemployment rate was 4.1 percent, tied with Orange County for the lowest in the state. Only six counties in North Carolina have unemployment rates below 5 percent, and national unemployment claims are rising as well.

The job scene contains a little bit of good news, because there have been few major blows to the region through the closing of large factories. Instead, the job losses seem to be trickling out from various industries and fields.

“I think it’s across the board,” Coates said. “There are some small businesses that are letting people go a little at a time.”

Those forced into job hunts also don’t have a definitive direction unless they already have a basic skill set, with retraining and education budgets as tight as other government budgets.

“It’s not like retraining somebody from one particular sector for another particular sector,” Coates said. “We have identified in our region some high-growth areas and the bulk of retraining funds go into those areas.”

Health care remains the hottest field for job prospects, and advanced manufacturing, and agribusiness seem to be experiencing growth, Coates said. “Transportation has been strong for a while, as well as some specific construction trades, despite the housing downturn,” she said.

Jobs for green industries and technology are warming up, partly on President-elect Barack Obama’s platform of developing renewable energy sources. Federal aid may come down for more jobs programs to help stimulate the economy.

“We’re also hearing about the possibility of a public-sector jobs program that will put people to work if they’ve been relocated from their jobs,” Coates said.

JobLink retraining guidance is done on an individual basis. “When somebody comes into one of our JobLink centers, we engage them in a dialogue and assessment to determine what their strengths and interests are,” Coates said. “We don’t say ‘This is the field to train in and we’re just going to put you in it.’”

Despite drops in the number of insured people, health professionals are still needed. “Everything’s on a smaller scale in our area, but there’s a high demand for physical therapists and (medical) technicians of various sorts,’ Coates said. “All the information we see is that will continue to be a high-demand area because of our aging population.”

Coates said funding for job training always lags behind because it is based on older data, so it may take one or two years for data to catch up with demand. Local workforce development agencies can request emergency funds, but assistance for financial aid or childcare may be limited because of shrinking budgets.

“We anticipate that may change as unemployment rises and more people need those funds,” Coates said. “But we’ve lost funding for the last couple of years.”

Workforce development funds come from the federal government through the U.S. Department of Labor, and there is some flexibility in spending, which helps job agencies react quickly to opportunities like the opening of a Google plant in Lenoir. The workforce board sets priorities on localized reports ands trends, which helps local job agencies anticipate supply and demand.

“We want to make sure we’re not training people for jobs that aren’t there,” Coates said. “We do see a lot of people coming back for retraining, so we don’t have any mechanisms for encouraging people in entrepreneurship.”

Coates said a lot of people are sprucing up their interview skills or adding more specialized training in fields they’re already working in.

The regional picture matches what is happening nationally, as unemployment claims rise and people remain out of work.

According to the U.S. Department of Labor, non-farm payroll jobs fell by 533,000 in November, and the unemployment rate rose from 6.5 to 6.7 percent. November’s drop in payroll employment followed declines of 403,000 in September and 320,000 in October.

Since the start of the recession in December 2007, the unemployment rate rose by 1.7 percentage points. The number of long-term unemployed--those jobless for 27 weeks or more--increased by nearly a third over the past year.

A recent Appalachian State University report found a 12-county region in western North Carolina has lost about 12,000 jobs since January, with 2,700 of those losses occurring in October.

“October was not a good month for the region,” said Todd Cherry, a co-author of the Western North Carolina Economic Index and director of the Center for Economic Research and Policy Analysis at ASU. “The regional economy has struggled over the past 12 months, but conditions noticeably weakened recently, and we are beginning to see signs that the economic downturn is hitting the region harder than the rest of the state.”

Western North Carolina’s economic activity, as measured by the index, decreased 0.9 percent in October. Regional activity also declined at an annual rate of 2.8 percent during the third quarter of 2008, according to the report. Preliminary numbers indicate the national economy decreased at an annual rate of 0.5 percent during this period, Cherry said.

“When you look back at the 2001 recession, that hit us really hard,” Cherry said. “Of course, that was the manufacturing industry. Up until October, I thought the region was maybe not going to feel a disproportionate effect, but then I noticed the employment numbers dropped for the region but not the state. I’m somewhat surprised we haven’t been hit harder than we have been, given that we’re drawing on tourism and second homes. Those are the ones you’d think would be hit first.”

Cherry, like many local tourism officials, believes the blow to tourism may have been softened because gas prices fell and travelers may have chosen to drive for vacations rather than fly.