To get a better sense of the gubernatorial candidates’ jobs plans, The News & Observer asked three economic experts to look at their proposals.
John Quinterno is the principal at South By North Strategies in Chapel Hill, a firm that analyzes economic and social policy. Brent Lane is the director for the Center for Competitive Economies housed at the UNC-Chapel Hill business school. Jason Jolley works as the research director at the center.
Here’s an edited transcript of recent interviews with the experts.
What is your first impression of the candidates’ plans?
Quinterno: “At the state level there is really very little a governor can do to create jobs, especially in a recession like we’ve had over the last few years, our state economy is integrated heavily into the national economy. ... Even though they use the term, neither of these are really jobs plans in the sense they don’t have anything to say or much to do with the actual labor market. What they really are is economic development plans.”
Lane: “Some of these remedies are really nothing different than what we’ve been doing that have been ineffective in the past. I don’t see the urgency here. But I don’t see the urgency anywhere in Raleigh. So it’s simply reflected in these policy papers.”
What is missing from the economic plans?
Quinterno: “There are things they could talk about: Is there a way we could do something to put some demand back into the economy? For example, the construction industry has been the most heavily hit during the downturn. Would there be a role for doing things to put construction workers to work, maybe new construction projects or retrofitting of state buildings? And maybe, is it time to build some state parks, or those sort of things, that create some demand for folks and create a public good and take advantage of the fact that if we need to invest in public infrastructure we could borrow for almost nothing?”
Lane: “It would be a focus on things that are proven to have broad economic benefits. For instance, in terms of income earnings one of the best ways to increase income is ironically in pre-K programs. Short term income growth is greatly impacted by graduation rates in high school. So through education policies is probably the most important place we make economic policies.”
What is your analysis of Republican Pat McCrory’s plan?
Quinterno: “McCrory’s plan is a little more hands off. It’s based on the assumption that government should basically get out of the way. ... So in that sense, McCrory is offering up a generic, but not a particularly state-specific, repackaging of fairly conventional national Republican ideas.”
Lane: “To his credit, McCrory is addressing what we have indicated as one of the systemic problems, which is the tax code. It’s one of the things, like infrastructure and education and regulation and transportation, that affects every employer in the state and that’s the proper emphasis for candidates for governor. ...
Jolley: “It’s not clear what Mayor McCrory is proposing but he talks about eliminating up front cash incentive packages. (But) those incentives packages ... that give not necessarily cash up front but are tied to some sort of performance metrics for companies to get more front-loaded benefits, tend to have a greater affect than the much more retroactive tax credit program.”
How does Democrat Walter Dalton’s plan compare?
Quinterno: “Dalton takes a much more traditional North Carolina, and really southern Democratic, approach to economic development, where he is cognizant of some of the issues of taxes and customer service, but he sees a little more active role for public policy and government in the economic development space.
“His plan is more comprehensive. If you read through Dalton’s plan, what you see is kind of the dance remix version of the greatest hits of economic development policy in North Carolina.”
Lane: “Dalton’s plan, because it is more programmatic and detailed, puts greater faith in the role of government in affecting specific economic outcomes.
“(His promised jobs) will not be immediate. Because 70 percent of our economy depends upon consumer demand and consumer demand depends on income growth, there is a circularity there that is difficult to escape from. Tax credits are very unlikely and have proven ineffective in terms of job creation. Now a couple caveats, Dalton in his details has targeted a couple areas in our research that has proven to be good ideas. For instance, an emphasis on job creation targeting the unemployed is one of the best ways to increase economic well being and income growth. Whether a tax credit is the way to do it is another question.”