As part of an assessment of how the state is doing heading into a critical election Nov. 8, The News & Observer asked the candidates for governor about the economy and what the state can do to extend the recovery more evenly across North Carolina. Here are answers from Republican Gov. Pat McCrory and his challengers, Democrat Roy Cooper and Libertarian Lon Cecil.
Q: The Great Recession ended in 2010. Since then, unemployment has gone down significantly, but wages have barely kept up with the rate of inflation. What has the state done right to help families benefit from the economic recovery, and what more should be done?
Cecil: It ended in 2010, depending on who is cranking the numbers. Government agencies and groups that got bail-out and shovel-ready money recovered in 2010-2012. Most commercial companies were starting to recover their lost business and grow into new business models by 2014. Reducing the corporate tax rate 1 percent helped families get entry level jobs. The drop in individual income tax for lower income families was strongly offset by increases in sales tax on services.
Cooper: North Carolina has benefited from a national economic recovery, but in North Carolina that recovery hasn't been universal, and many working families have been left behind.
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It requires more than a job to have financial security. Many of the jobs we are adding are in low-wage industries, and more than 10 percent of workers are employed in part-time jobs because full-time employment is unavailable. Another issue impacting employment is the skills gap - workers who lack the skills that businesses need. We need to focus on the change in employment, not the employment rate, if we are to create meaningful employment gains.
We need policies that create more "quality jobs" in North Carolina - jobs that pay a living wage and allow middle-class workers to make ends meet without having to work two or three jobs.
We need to stop the continuing corporate tax giveaways and put more money in the pockets of middle-class families. Under Gov. McCrory, most families are paying more while those at the top are getting breaks. In fact, Gov. McCrory has raised taxes on working families in 67 different ways. It's time for that to change. As governor, I will work to put all North Carolinians first.
McCrory: Slow wage growth has been a national problem after the Great Recession, but North Carolina has outpaced national and regional average growth rates thanks to our tax-cutting strategy which has spurred strong job growth. Since taking office in 2013, we have delivered $4.7 billion in across-the-board tax relief, including for hard-working families and small businesses. Income tax cuts meant that North Carolina families are now taking more home in their paychecks week to week and since 2013, North Carolina's income growth has been among the strongest in the nation.
Per capita income growth since tax reform (2013Q3 to 2016Q1). U.S.: 9.21 percent. N.C.: 10.27 percent.
In the past year, North Carolina's median household income growth is 6.8 percent compared to 5.47 percent for the U.S. average.
Because we cut taxes, North Carolina is much more competitive with its neighbors for jobs, but we should continue to stay ahead of our competition.
Q: A large part of North Carolina's economic recovery has been limited to the Charlotte and Raleigh metro areas. What can you do, as governor, in the next four years to help struggling rural counties?
Cecil: Rural counties that keep low property tax rates and realistic plans for repurposing existing buildings and abandoned plants should be able to attract new companies with 20-100 employee workforce requirements. Outside the major metropolitan areas, they need economic growth, (a.k.a. jobs) not economic development (a.k.a. new megasites) with six-year planning and build-out cycles.
Cooper: We do have two North Carolinas. And if you travel in the rural parts of the state where I grew up, you know the deep economic despair that we have in many of our counties. We must have a strategy to lift our rural areas up without tearing the urban centers down.
One of the most important things we can do for our rural communities is invest in workforce training and improve our K-12 schools. Education is opportunity. While creating paths for students to attend a four-year college is important, there are many trades and professions with well-paying jobs for plumbers, electricians, welders, or other high-demand fields that are hiring now and provide opportunities.
Our rural areas are also suffering because of Gov. McCrory's refusal to accept Medicaid expansion. One of the first things I will tackle as governor is accepting Medicaid expansion, which would provide an important source of funding for family caregivers. Governor McCrory's failure to expand Medicaid to our neediest residents is simply appalling. Many Republican governors nationwide have said yes to health care for the working poor, but families in North Carolina are being left without a safety net. Medicaid expansion will not only support essential services, it will create tens of thousands of good-paying jobs, help keep rural hospitals open, and help private employers keep their premiums lower.
McCrory: Unemployment rates have actually declined faster outside of Wake and Mecklenburg counties, and unemployment rates have declined in all 100 counties compared to when I took office in 2013. However, we must do more to connect small towns to economic, health-care and educational centers through better transportation infrastructure. We started this process during my first term with over $700 million in additional funding for highway and road projects and a major CSX intermodal terminal opening in eastern North Carolina. But if elected, I will again push for a transportation infrastructure and road construction bond to take advantage of historically low interest rates.
Q: Companies in North Carolina - especially in manufacturing - have routinely said they'd like to hire more workers but can't find people with the right training or knowledge. What should the state do, if anything, to address that skills gap?
Cecil: N.C. must increase the options of vocational and specialized training for students that are not being educated in our traditional public school curriculum. Most dropouts are ninth and 10th grade. They are not interested in the current instruction, but may respond to online individual courses, vocational schools, or crafted apprenticeship programs. Each needs standard progression tests to assure the children can complete a GED-type certification for graduation, however.
Cooper: When I travel across the state and speak with business owners, I often hear "we have jobs, but we just don't have the qualified people to fill them." I believe that education is critical to good-paying jobs in North Carolina. Manufacturing is not dead, but it has changed significantly, and the different jobs we have require more and more skills.
Investing in education is key not only to raising wages and growing our economy, but also to creating a more durable economy and a better standard of living. And our public universities and community colleges will be instrumental in connecting people with businesses to provide the skills our changing workforce requires. To improve our state's economic competitiveness, we need to make sure our workforce development programs receive their full federal funding allotment. We also need to increase the amount of apprenticeship programs in high-need industries like construction.
McCrory: North Carolina has actually led the nation in manufacturing job growth, creating the sixth most manufacturing jobs in the country since 2013. We are also No. 1 in the Southeast for manufacturing employment. Our administration has set a bold goal to close the skills gap by 2025 in North Carolina by bringing the education and business communities together to connect students with educational opportunities to learn the skills necessary to get a job in North Carolina. In our first term, we began turning unemployment offices into career centers, expanding apprenticeship programs; (we) invested more money in vocational education and instituted year-round job training at community colleges.
Now, North Carolina is No. 1 in the Atlantic region for workforce development.
Moreover, we spearheaded the Connect NC bond initiative to invest $350 million in the community college system and nearly $1 billion in the UNC system, which will go towards desperately needed improvements, especially in high-demand fields like science, math, nursing and engineering.
Q: What is the most important way your economic plan differs from your opponent's, and why?
Cecil: My economic plans do not include any net growth in any government agency or department, with possible exception of student testing services/certification and government cost accounting.
Cooper: The biggest difference is priorities - Gov. McCrory has prioritized corporations and those at the very top. And he's put his political agenda ahead of the best interests of our state, hurting our reputation, and costing thousands of jobs and hundreds of millions of dollars. The best examples of that are House Bill 2 and refusal to give our economy a boost with Medicaid expansion. I will work to repeal both of these disasters.
I am running for governor because it is time that North Carolina works for everyone.
North Carolina needs a more balanced, forward-looking approach to economic development. We need an economic plan that's able to quickly respond to the challenges of a 21st century workplace and keep pace with advances in technology that are propelling the Information Age. We need to diversify our economy and build on our assets to create new opportunities and jobs for North Carolinians in all parts of the state.
McCrory: My opponent has a history of raising taxes, supporting job-killing regulations from Washington, D.C. that hurt workers, small businesses and the agriculture industry. He voted to raise taxes by $9 billion while in the legislature, including higher income, sales and business taxes, and as attorney general, he refused to fight Obamacare and job-killing regulations that hurt families and small businesses. If elected, Roy Cooper will bring back the days of higher taxes and more regulations, while I will keep taxes low and fight against government overregulation to continue North Carolina on the path of job creation.
Our strategies are working: since 2013, North Carolina has experienced one of the fastest-growing economies in the country with over 300,000 new jobs and an unemployment rate that is now below the national average.