Opinion: Daily Journal

North Carolina’s Slipping Economy

RALEIGH – For years, North Carolina prided itself on being “progressive,” at least within the context of our Southern neighbors. Our economy wasn’t as agrarian. We had a prominent university and a culture of education. We didn’t have the same magnitude of racial strife that one could find in the Deep South.

Much of this was the sort of boosterism that exists in many places, particularly those where elites are defensive and feel the need to swagger and brag a bit. But some of it was actually true. We have had a stronger and more diversified economy than many of our neighbors, for example. Unfortunately, our relative position relative to the rest of the South is now slipping.

Look at the graph reproduced below. Prepared by the research staff at the John Locke Foundation, it reports unemployment data from the U.S. Bureau of Labor Statistics for North Carolina and other Southern states during the past two decades. While unemployment rates are hardly the only – or even the most telling – indicator of the health of an economy, they are available for every jurisdiction every month, giving a researcher lots of data with which to look for trends.

As you can see, the region’s unemployment rates do generally tend to track together, but there are some important differences in the relative rankings. In the early 1980s, North Carolina was roughly in the middle of the distribution in its jobless rate. But as the state benefited from a variety of factors – an influx of entrepreneurial firms and people, the rise of strong and dynamic banks, a gradual improvement in education and labor skills, some investment in roadways and other useful infrastructure – our unemployment rate fell to the bottom of the list. North Carolinians tended to find jobs and keep them at higher rates than our neighbors did.

Now that’s changing. As you can see, North Carolina’s jobless rate began to spike at the beginning of 2000, and is now the highest in the region. Some of our counties are positing double-digit rates. Long comparing ourselves to the Virginias and Georgias in economic momentum, we are now edging closer to Alabama territory.

Maybe that big tax increase our state leaders gave us last year will help.