Wednesday, June 29, 2022

By the numbers: A look at the Cape Fear region’s economy and unemployment figures

This graph depicts how the Wilmington Metropolitan Statistical Area (MSA) economy breaks down by sector as of February 2019, before the pandemic began to drastically impact the local and national economy. In red, the number of job losses in March compared to February are depicted by sector; in green, the number of job gains according to DOC data. Note: Job losses are likely underreported. (Port City Daily graph/Johanna F. Still, Data courtesy N.C. Department of Commerce)

SOUTHEASTERN, N.C. — The economy, whether locally or nationally, isn’t doing well. But how bad is it? How many people have already lost their jobs? How many people will lose their jobs?

Answering these questions with absolute certainty isn’t yet possible, but there are estimates, jobs reports, and anecdotal sentiments that can help vet out what exactly the job market looks like in the Cape Fear region as the nation faces the worst unemployment rate since the Great Depression.

For the first part of the pandemic, through March, things could have been worse. Employment in urbanized, more populous areas in North Carolina held steadier compared to sparsely populated communities with fewer job opportunities.

Hyde County, the state’s second-least populated county, had a 13.1% unemployment rate in March, according to the latest N.C. Department of Commerce data. But Hyde already had the state’s highest rate of unemployment pre-Covid-19. Behind Hyde County, its northeastern North Carolina neighbor and least populated county statewide, Tyrrell County, had the second-highest unemployment rate of 7.5% in March. Again, Tyrell had high unemployment rate before the pandemic, even higher in January with a rate of 8.6%.

Buncombe County (Asheville’s county seat), Orange County (Hillsborough, Chapel Hill), Wake County (Raleigh, Cary), and Durham County (Durham) and Alexander County (Taylorsville) have the top five lowest rates of unemployment statewide in March, between 3.4% to 3.6%, with Alexander serving as a less-populated outlier among the urbanized group.

An estimated 7,756 fewer people are working in March compared to February between Pender, New Hanover, Brunswick, and Columbus Counties, and 2,467 fewer people working compared to March 2019, according to the DOC.

The Cape Fear region falls at about the middle compared to the state, with New Hanover buoyed a bit due to its relatively more diverse employer portfolio. Brunswick County and New Hanover County’s unemployment rate each increased by 0.5% while Pender County’s rose by 0.7% between February and March.

(N.C. Department of Commerce)

Keep in mind: March unemployment figures include the first half of March, when many businesses remained open at mostly full speed before statewide restrictions arrived March 30. April’s figures are expected to show the full force of the virus’ impacts locally, and national numbers already reflect a more significant downfall.

The nationwide unemployment rate rose to 14.7% in April, the Department of Labor reported Friday. This marks a 10.3% jump from March and the highest unemployment rate since the Great Depression, on the heels of February’s 3.5% unemployment rate, the nation’s lowest since the 40s.

Note: Localized unemployment figures for April are expected by May 22; stay tuned for an update.

Changes by sector

Encompassing Pender and New Hanover Counties, the Wilmington MSA does not include Brunswick County, a contentious 2013 exclusion that placed Brunswick in Myrtle Beach’s MSA. Generally, northern Brunswick County contributes and participates greatly to Wilmington’s economy, with southern Brunswick County communities less connected to the City and more likely to cross the state line for shopping or supplies.

The Wilmington MSA has a higher reliance on its service and hospitality sector, making up 15% of the workforce compared to the state average, 11.1%.

Between February and March, this sector lost the most jobs statewide (13,600), down 2.5%, according to the latest Department of Commerce data. Nationwide, impacts on the service and hospitality sector were brutal, with nearly one out of every two jobs cut in April.

In March, New Hanover County’s unemployment rate ticked down just 0.5% with at least 1,000 jobs lost. Experts warn these unemployment figures are likely higher than what’s being reported.

At 4.4%, the Wilmington MSA has less than half the proportion of manufacturing jobs in the workforce compared to the state average. This industry has been declining for years due to advances in automation, but still, the Cape Fear region has far less of these higher-paying opportunities compared to the state average. No job losses were reported in this sector in the region, according to the state data.

New Hanover County also has a higher proportion of self-employed workers, at 7.1% compared to the state average of 5.7%, according to U.S. Census American Community Survey 2018 data. State unemployment applications for self-employed individuals and independent contractors didn’t open up for a full month until April 24, leaving many of these individuals weeks behind on bills before getting relief.

As data has shown, working from home or sheltering-in-place is a privilege. Many people working lower-wage jobs, employed in essential jobs, didn’t and don’t have the luxury or even choice to stop working.

For instance, people living in poorer Wilmington-area Census Block Groups traveled six times as much as people living in wealthier communities between late March and mid-April, according to a detailed analysis prepared by Cubeiq, a company that collects mobility data. Before the pandemic, people living in wealthier Wilmington-area communities traveled 1.4 times as much as people living in poorer communities.

The proportion of jobs by sector in the Wilmington MSA vs. North Carolina before the coronavirus made economic impacts in February 2019. Of note, the greatest differences by sector fall in the manufacturing and leisure and hospitality industries. (Port City Daily graph/Johanna F. Still, Data courtesy N.C. Department of Commerce)

Who’s losing jobs?

One estimate projects the Wilmington region’s unemployment figures will peak at 592% higher than what’s being reported as of March, with an estimated 42,100 people unemployed. But who’s unemployed now, and what do we know for sure?

“I have a huge surge in resumes coming in,” Peggy O’Leary, owner of Premier Staffing Solutions said. “Just every level you possibly can think of, that’s what we’re getting.”

The Wilmington-based staffing company is working to link a growing pool of applicants to a shrinking pool of job openings. “It’s a huge variety of people. From McDonald’s to the high-end,” O’Leary said. “I think just about everyone is getting hit in some way.”

As for new job openings? Some roles planned pre-crisis aren’t coming through, while others have been placed on indefinite hold. “I’m getting jobs coming in, but not like before,” she said. “It’s kind of hard getting jobs because we have people say, ‘we’re waiting for this to blow over.'”

In New Hanover County alone, at least 714 people employed by large companies lost their jobs in March, as reported in the state’s WARN notice report. There’s the 223 permanently laid-off employees at Enterprise. The permanent closure of FieldCore in Castle Hayne, a GE company, laying off the entire 261-person workforce. Add 30 permanently laid-off employees of Hooters in Wilmington, plus the temporary lay off of 120 Carrabas and 87 Outback Steakhouse employees. Federal WARN notice requirements only apply to employers of at least 100 or more and layoffs of 50 or more people.

Therefore, smaller businesses and layoffs aren’t captured in this data. Defined as employers of 500 or less, small businesses employ 1.6 million people in North Carolina, making up 60% of the private sector workforce and 45% of the Gross State Product, according to the University of North Carolina’s (UNCW) Small Business and Technology Development Center (SBTDC).

Unemployment

From March 15 through May 5, an estimated 470,000 people have been paid unemployment benefits according to a North Carolina Department of Commerce update shared Friday. The department’s Monday estimate put the total figure much higher, at 550,000; this is preliminary data subject to revision.

Including state and federal payments, the DOC has administered more than $1.4 billion in unemployment insurance total statewide.

Keeping track of the nearly half a million individuals estimated to have been paid through the Division of Employment Security may be a more accurate representation of actual unemployment figures compared to the number of unemployed individuals and rate of unemployment as reported through the DOC. The DOC’s unemployment estimates and rates rely on survey data, which can’t fully encompass the actual job losses.

But the claims data doesn’t break down by region and the less reliable unemployment data does, so it’s still worth parsing out to get a localized look (although the local data does take a little longer to get released).

As of March DOC data, the state added at least 180,000 unemployed individuals, a 4.4% unemployment rate, on par with the nationwide rate. Economic losses didn’t truly begin to take a toll until mid-March, so March figures don’t fully reflect the pandemic’s complete impact on the economy. Compare these unemployment figures with the number of statewide unemployment claims filed since early March, which passed one million Sunday, May 3, and it’s more than likely the actual unemployment rate and workforce are higher than what’s being reported.

Claims don’t equal one unemployed person; for example, when claims finally opened for independent contractors April 24, the Department of Employment Security required applicants to have already been denied through the normal unemployment process, meaning each independent contractor awarded assistance will count as two claims in the system.

Since mid-March, DES is processing about five times as many claims as it received during the Great Recession in 2009. In response, DES tripled its staff in an attempt to address widespread lock jams that arose from the overwhelmed system. Of the one million claims filed since March, one-fifth cite “other reasons” unrelated to Covid-19.

Is this a depression?

The economic fallout post-2008 was technically a recession, defined by two consecutive quarters of negative economic growth. Depressions last at least three years or a 10% or more fall in GPD. Or as UNCW’s regional economist Dr. Adam Jones put it to the Wilmington Business Journal, a recession is when your neighbor loses their job. “A depression is when you lose yours,” Jones said. This is definitely a recession, he explained, but it’s debatable whether or not it’ll be a depression.  

On the topic of the economy reopening, Jones explained the same pre-coronavirus spending behaviors may never return. “I don’t think we’re ever going to make it back up,” he said. “I can put off buying a helmet and buy it later. I can’t put off the burrito I was going to buy on a Friday night until three months from now. I’m not going to eat four burritos to catch up. Which means the sales tax revenues that are with that are just gone.”


Send tips and comments to Johanna Ferebee Still at johanna@localvoicemedia.com

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