In a desperate attempt to turn logic on its head and deny that incentives matter to human behavior, the authors of this N&O article resort to twisting employment data to somehow “prove” that North Carolina’s unemployment insurance reform last summer did nothing more than push people from the labor force.
On closer examination, these numbers really don’t provide much evidence that the cuts to the insurance system spurred job growth. During 2013, North Carolina gained jobs at an average monthly rate of 0.1 percent, compared with a rate of 0.2 percent during 2012 and no different from the 0.1 percent average monthly rate recorded in both 2010 and 2011. Between June and December 2013, the state netted an average of 5,400 jobs per month, compared with 7,500 jobs per month in 2012.
See what they did there? They compared average monthly job growth rates for all of 2013 to 2012 and 2011. But the changes to UI didn’t take effect until July 1, 2013. That’s simply a dishonest and misleading comparison. Including job loss numbers from the first half of 2013 drags down last year’s average, and those job losses obviously can not be attributed to UI reform.
To appreciate the true impact on the labor market that the UI reform had, a more direct comparison would be more appropriate: comparing the employment numbers from the first half of 2013 to the last half of 2013 after the UI changes took effect. On this note, even the authors of the article admit that between June and December of last year the state added more than 51,000 jobs (according to the establishment survey). The job growth after the UI reform stands in sharp contrast to the job losses suffered during the first half of 2013.
No matter how hard they try to torture the data, the progressive mouthpieces for government dependency can not undo irrefutable logic: human beings respond predictably to changes in incentives, and more specifically: when you pay people not to work, the result will be more people not working.