Editorial: By fixing what isn't broken, N.C. has lost its economic development edge
Posted July 25, 2016
Updated July 27, 2016
-- North Carolina’s economic development efforts are lackluster.
-- Revival of CSX project showed soundness of state’s tried-and-true economic development strategy.
-- Except for Charlotte and Raleigh, economic recovery is absent.
-- Middle class wage-earners have been bypassed.
-- Can officials claim to have a top performing economy when a leading economist says growth is “low by historic standards” and when compared to the early 2000s?
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A CBC Editorial: Monday, July 25, 2016; Editorial# 8033
The following is the opinion of Capitol Broadcasting Company
Some may sugar coat it with a concoction of cherry-picked statistics and soft-boiled anecdotes, but the reality is that North Carolina’s economic performance these days is bland, flat and lackluster. The once-shining leader in the tech sector, education advancement and entrepreneurial energy is viewed as tarnished and dull.
That’s why the miraculous resuscitation of the CSX transportation hub in Rocky Mount is a particularly important development. About seven months ago the McCrory administration botched the deal in Johnston County, abruptly abandoning it and leaving it for dead amid a groundswell of local opposition.
It took a seasoned executive who’d been set aside by the current administration, working closely with the Nash-Edgecombe area community and CSX, to pull the project out of the dust bin and keep it in North Carolina. It will become a major economic boost to a rural area that has been left behind in the state’s modest economic recovery from the Great Recession.
How bad is the economy in the rural areas of the state? Last year, of the 83,700 jobs added in North Carolina, 75 percent were in Raleigh and Charlotte. The projection for this year is that there will be 86,000 new jobs with 55 percent in Raleigh and Charlotte.
That’s not to suggest there isn’t any growth or entrepreneurial innovation in North Carolina. But often those efforts are met with hostility instead of support. A case in point is the state’s growing clean energy economy. Rather than support one of the fastest growing renewable energy sectors in the nation, Republican leaders build roadblocks and seek to impose added and unnecessary regulation – a rather ironic ploy given the anti-regulation mantra many are given to.
“The state’s economic growth rate has been low by historical standards as well as compared to the economic expansion of the early 2000s,” said Michael Walden of N.C. State University in his just-released state economic outlook.
Not only are vast geographic areas of North Carolina being left behind in the state’s modest economic recovery, a wide swath of the state’s wage-earners are bystanders. “Job growth has been strongest in both high-paying and low-paying economic sectors and weakest in the middle paying sectors,” Walden said. “The number of ‘discouraged workers’ – individuals without work who have stopped looking for a job – appears to be stubbornly stuck at near 50,000 – the same as before the Great Recession.” Rather than being a regional employment leader, Walden notes that North Carolina has “slightly under-performed the Southeast.”
North Carolina’s economy is also moving away from its longtime mainstay of non-durable manufacturing. That leaves displaced middle-income workers needing additional formal education to transition into comparable paying work in the growing information, finance and professional services sectors.
As Gov. Pat McCrory presses his notion that North Carolina had a “bad brand,” he and legislative leaders have promoted low wages and low taxes to attract jobs and growth. As Walden notes, that growth has been modest, isolated and bypassing the middle class.
Add to that ill-considered policies of meddling in local issues, such as the disastrous House Bill 2, and it shouldn’t come as a surprise that scores of the nation’s top businesses, major employers and event planners not only protest the direction North Carolina is headed, but reversed decision to expand, locate or hold events in the state.
North Carolina was growing at a faster pace when its brand reflected an unshakable commitment to provide a quality public education, no matter where students lived, and a high quality of life that embraced diversity.
Rather than tackling fruitless ideological problems that don’t need solving, our so-called economic development leaders would do better to focus on what’s worked to make North Carolina a regional and national leader in the past – a high quality of life, prosperity and opportunity that reaches all over the state and access to a quality education by all.