Hello, goodbye: Tar Heel employers turn to temps to keep costs down during a tepid recovery.

• Author: Campbell, Spencer
• Position: Statewide: BUSINESS NEWS FROM ACROSS NORTH CAROLINA

Debra Ann Jolley, 25, didn't get one of those useless college degrees--such as in Swahili --but she still couldn't find work in public relations and marketing, her major. "Not only was it right when the economy was coming back from the recession, all of my internships had been sales-based." After graduating from Appalachian State University and moving to Charlotte in 2010, the Destin, Fla., native cycled through a number of jobs, including working in direct sales and for the local board of elections, until turning to a staffing agency about two years ago. "It was easier to have them looking than me." Through it, she landed a position in the Queen City office of Detroit-based Quicken Loans Inc. Processing mortgages wasn't her dream gig, but it was temporary.

North Carolina's unemployment rate dipped to 6.7% in January, the lowest it has been in more than five years. It has fallen a staggering 2.1 percentage points since Gov. Pat McCrory took office in January 2013. "The trend of more people getting back to work in North Carolina is great news for our state," he said in late January. "We continue to see that our progrowth and pro-jobs policies enacted over the last year are having a positive impact and getting people into jobs."

One such policy has received much attention--and scrutiny--in recent months. In July 2013, Republican lawmakers cut the maximum weekly payout for unemployment insurance from $500 to $350 and duration from 26 to 20 weeks. The overhaul was necessary, conservatives say, because the state needed to pay back the more than $2 billion it borrowed from the federal government to cover unemployment benefits during the recession. It also made North Carolina an interesting case study when federal benefits for the long-term unemployed ran out at the end of last year.

That inspection revealed caws in the governor's crowing. "The reason the rate has gone down year over year, from December 2012 to December 2013, is because the labor force has gotten smaller, not because more people are reporting themselves as being employed," says John Quinterno, principal of South by North Strategies Ltd., an economic- and social-policy research consultancy in Durham. "I'm not making a policy statement there, I'm not making a statement about causality. All I'm saying is, to get the numbers to add up the way they've added up the last six months of 2013, that's what's making it happen." North Carolina's labor-force participation rate--those working...