Jobless benefits account for 1.1 percent of wage base in Watauga

By Scott Nicholson

In what could be considered counterintuitive logic, unemployment has in some ways benefited local economies.

A recent report by the non-profit N.C. Budget & Tax Center, Watauga County residents received $4,616,165 in unemployment benefits from December 2007 to February 2009. That accounted for 1.1 percent of all wages paid in the county during that period.

The report also calculated the overall economic effect of the benefits, projecting the funds had an economic impact in Watauga County of $7.57 million during that time.

Since the start of the recession, North Carolinians have received $2.2 billion in unemployment insurance payments. The benefits have generated an estimated $3.7 billion in economic activity across all 100 counties.
“Unemployment insurance payments help families struggling with a job loss make ends meet,” said John Quinterno, the author of the report. “Because most payments are spent quickly and locally on such basic expenses as rent and groceries, the insurance benefits also help to sustain local economic activity.”

Data from the N.C. Employment Security Commission was computed with an economic multiplier of $1.64 to come up with an economic impact for unemployment.

The economic impact of unemployment insurance benefits has been largest in Mecklenburg County ($294.6 million), followed by Wake ($201.9 million), Guilford ($145.6 million), Forsyth ($91.9 million) and Gaston ($87.3 million) counties. Relative to the size of local wage bases, the economic impact has been greatest in rural counties, led by McDowell County and followed by Graham, Caswell, Stokes and Martin counties.

In February, Watauga County’s unemployment rate was 8.6 percent, sixth-lowest in the state. The state average was 11.3 percent, nearly twice as high as in February 2008 and up 1.1. percent over January.