CHARLOTTE — President Barack Obama comes to Charlotte on Friday to talk up America’s flagging economic recovery. If local boosters are correct, the president will hold up Charlotte as a model for rest of the nation to emulate. If only that were true.
The latest unemployment numbers show the Charlotte Metro area’s 12.8-percent jobless rate is about 30 percent higher than the national average. The local fiscal situation is so dire that in the past few days local officials have been forced to contemplate closing libraries and laying off teachers, The county’s AAA bond rating is in jeopardy.
Plans to build a badly needed county jail — a basic function of local government dating to the Domesday Book — have been scrapped. Fiscal Year 2011 is expected to be even worse, partly driven by a commercial real estate crash which has socked property values with losses from 20 to 40 percent below their 2006-07 peaks.
But there is one number that should convince Obama that the Queen City does not belong on a pedestal: Since January 2008, the county has lost a staggering 36,000 jobs, a drop of about 8 percent. You have to go back five years to find a time when so few total jobs were available in Charlotte and Mecklenburg County.
Adding the thousands of discouraged workers no longer looking for regular employment, and the real local jobless rate may exceed 15 percent, far above the latest official rate of 12.8 percent.
What about the impact of the federal stimulus on Charlotte? It hasn’t helped. Going far beyond vague stimulus spending, even direct government bailouts have not made a dent. Six-time government bailout loser GMAC — after grabbing three federal bailouts worth more than $15 billion, a state of North Carolina bailout of some $4.5 million, plus several hundred thousands more in “incentive” money from the city and county — came to town amid great fanfare a little over a year ago.
Several weeks ago GMAC, 56 percent of the company now owned by the U.S. Treasury, shut down its mortgage lending operation in Charlotte, jettisoning 115 jobs.
And now comes the president to talk up another direct federal investment in Charlotte jobs. This time the beneficiary will be Celgard, a battery maker for electric vehicles which last month finalized a $49 million grant from the U.S. Department of Energy. The state of North Carolina chipped in another $18 million. Together the $67 million in taxpayer subsidies are expected to produce up to 289 new jobs in the county.
If so, that would mean each job cost $231,844 in direct subsidies.
At that rate, before Charlotte can “recover” the other 35,700-odd jobs lost in this recession, the government would have to pony up another $8.27 billion.
Will that be cash or credit, Mr. President?
Jeff A. Taylor is a contributing editor of Carolina Journal and author of the John Locke Foundation’s Meck Deck blog (johnlocke.org/charlotte).