Point of View

North Carolina's growing demographic divide

April 3, 2013 

North Carolina continued to grow more rapidly than the nation and the South in 2012, according to recently released census statistics. But, predictably, most of the growth – an increase of 216,602 – was concentrated in the state’s metropolitan areas, especially those along the I-40/I-85 corridor. Last year, in fact, Raleigh was the nation’s fastest growing metropolitan area, and Charlotte was fifth.

Unfortunately, what these latest census statistics also reveal is how the demographic gap continues to widen between the state’s thriving metropolitan areas and declining nonmetropolitan areas. Since 2010, 47 North Carolina counties have lost population, an unprecedented pattern of decline driven, in part, by recession-induced job losses. The economies of the counties experiencing population loss were long-dependent on either low-wage manufacturing industries (mainly in the Piedmont and the Mountains) or family farming (mostly east of I-95). As opportunity leaves these areas, young people follow, leaving behind an older population that is aging in place.

Owing to the exodus of the prime working-age population, the skilled labor force needed for 21st-century jobs is largely absent from these counties, making it increasingly difficult to attract jobs that will re-build their local economies. Many of the skilled, ambitious young adults from these counties do not return home after college or military service due to the lack of economic opportunities. With fewer young adults, families aren’t formed, and fewer children are born in our small towns and rural areas. This downward demographic spiral is difficult to stop.

Moreover, as the population declines, demand for residential and commercial real estate decreases, real estate values drop, and the property tax base shrinks, severely limiting the ability of these counties to provide the basic education mandated by the state’s constitution. Without adequate support for education, it is difficult to develop the labor force needed to attract industry and foster economic growth and development.

We know the elderly will account for an increased share of the population as the state’s 1.8 million baby boomers grow older over the next 20years. That future already has arrived in 15 of North Carolina’s rural counties, where more than 20 percent of the population is 65 or older today. Caring for the large rural elderly population is adding stress to local health services systems that are already financially strapped.

No matter how we address these structural changes in our declining rural counties, all of our choices are costly. We can choose to let market forces operate unimpeded, which will lead to long-term economic and demographic declines, and hope that the state’s small towns and rural areas miraculously regain competitive advantage and thereby stabilize demographically and economically. We can increase investment in infrastructure necessary for economic growth. We can reorganize governing bodies, consolidating essential services across counties. We can increase investments in public schools and lifelong learning, with an eye toward improving the human capital base required to attract industry and foster home-grown entrepreneurship and business development.

But, as a prelude to evaluating these options, we must first recognize the unprecedented population loss in almost half of North Carolina’s counties. We might have passed a tipping point from which economic and demographic declines in many of our rural counties accelerate. We can focus on the impressive growth in our metropolitan areas, claiming, correctly, that our state as a whole is a national economic leader. But we should not simply avert our gaze from that other half of our state where opportunity and growth are slipping away.

Dr. Jim Johnson is the Kenan Distinguished Professor of Strategy and Entrepreneurship at the University of North Carolina Kenan-Flagler Business School. Dr. Allan Parnell is Vice President of the Cedar Grove Institute for Sustainable Communities in Mebane.

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