State offers strong value proposition
Where is the best place to find good employment opportunities in the technology industry? According to a new study by the Computer Technology Industry Association (CompTIA), it’s not Silicon Valley. It’s North Carolina.
The CompTIA analysis compared metropolitan areas across the country on the basis of how many tech jobs are currently available, the expected growth rate in those jobs over the coming months and years, and the cost of living.
Where these factors intersect is the basic question the study explores, by identifying communities where prospective workers can find “excellent career opportunities and a rewarding lifestyle,” as the report puts it, “where your tech job dollar will take you far.”
Companies based in San Jose and San Francisco still play an outsized role in the technology industry, of course, but these are very expensive places to live. Comparatively speaking, North Carolina isn’t. At the same time, our state is home to many start-ups and high-growth companies that either work in computing or information technology directly or specialize in applying technology solutions to business opportunities in finance, agriculture, medicine, manufacturing, and other fields.
This attractive combination explains why Charlotte and Raleigh ranked first and second, respectively, on CompTIA’s Tech Town Index for 2018. Austin, Texas came in third. San Jose, San Francisco, Dallas-Ft. Worth, Seattle, Denver, Atlanta, and Huntsville, Alabama rounded out the top 10. Durham-Chapel Hill, by the way, was a strong contender, as well, ranked 15th on the national list.
North Carolina is used to getting kudos for its business climate from national trade associations, research organizations, and media outlets. What drew my interest to this study is the emphasis on value rather than just on growth rates or average pay.
As we have seen play out in our state and elsewhere, conservatives and progressives propose different public policies because they start with different assumptions about the priorities of economic decisionmakers.
Conservative argue that cost matters a great deal. They assume that when a jurisdiction raises tax rates or imposes higher regulatory burdens, that dissuades employers, entrepreneurs, investors, and households from coming to or staying there. Progressives argue that service quality matters more. They assume that most employers, entrepreneurs, investors, and households would rather be in a place with high-quality public goods — financed by taxes or protected by regulations — even if that means the cost of living and doing business there is higher than in competing jurisdictions.
Based on the available empirical evidence, conservatives have the stronger argument. Most peer-reviewed studies of state and local economies shows that higher taxes and heavier regulations are associated with lower rates of economic growth. Most peer-reviewed studies do not find that spending more tax money on public services, including education and transportation, is associated with stronger growth.
That certainly doesn’t mean that these services aren’t valuable, or that government has no constructive role to play in economic development. In fact, this isn’t really a binary choice between service and cost. Think of it more like a spectrum. What economic decisionmakers are really seeking is their own “sweet spot” between the two poles. They are seeking value — good-quality services at the lowest possible cost.
Arguably, North Carolina is one of the nation’s leaders in delivering value, and is getting better at that with each passing year. Responsible state leaders have reduced the cost of government, no question about it. They’ve reduced and reformed the tax code while also eliminating counterproductive rules and streamlining the regulatory process.
But they have also improve the cost-effectiveness of North Carolina public services, including education, transportation, and even the criminal-justice system (by reducing the number of nonviolent offenders locked up at high cost in state prisons, so that our resources are focused on incarcerating the most-dangerous offenders).
In other words, North Carolina offers potential employers and employees an attractive value proposition: do your work here, rather than in California or the Northeast, and you will enjoy lower business costs and more-affordable housing options without sacrificing quality of life.
John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.