Fist-pumping and back-patting are all the rage in Raleigh these days. Some economists are talking about North Carolina’s economy hitting a sweet spot and elected leaders are running out of ways to take credit for the good news.
The worst of the Great Recession is in the rearview mirror, but the recovery has left far too many people, families and communities worse off. When you take a sober look at North Carolina’s economic reality, the breathless self-congratulations ring a bit hollow. An alarming pattern has emerged: Economic growth is not producing broad prosperity, which is trouble for everyone.
First of all, there still are not enough jobs for everyone who wants to work. There are a quarter-million people looking for work in North Carolina today, roughly 30,000 more than before the recession.
Because our economy is so heavily reliant on consumer purchases, unemployment is not just a problem for individuals or families; it undermines the economy of the entire state. When growth doesn’t provide a job for everyone who wants to work and people have fewer dollars in their pockets to spend, it makes all of North Carolina less prosperous.
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We’ve also replaced a lot of middle-class careers with low-paying, dead-end jobs. Thousands of jobs have been lost in industries that were the bedrock of middle-class North Carolina for generations, particularly manufacturing and construction. These were jobs where hard work brought livable wages and opportunities for advancement, jobs that could support a family, and jobs that offered a piece of the American Dream.
At the same time, we’ve seen an explosion in low-wage service jobs with few opportunities to move up. The average wage in industries that have grown since 2007 – like hotels and restaurants – is almost $10,000 less than in industries that have declined. When growth doesn’t create good-paying jobs, the lack of prosperity reverberates through the entire economy as people stop going out to eat, buying houses, getting new cars and scale back in a host of other ways.
An hour’s honest work doesn’t buy as much today as it did in 2007. When you adjust for inflation, the average hourly wage in North Carolina has actually declined over the last seven years, forcing many North Carolinians to work more or get by on less.
The recovery has completely bypassed huge parts of the state. Positive statewide data are almost entirely driven by a handful of urban and suburban regions. Outside of these population centers, the story is very different. The majority of North Carolina counties have not gotten back to the number of jobs that existed in 2007, a clear sign that urban growth has not created prosperity in many rural communities.
So, why all of the high-fives in Raleigh? Partially, it’s relief. Any good news is welcome given where we were a few years ago. We have taken a step back from the gaping maw of global economic collapse.
Also, some parts of the state are doing very well. Business sales are strong, corporate profits are up and construction cranes dot the skylines of Raleigh and Charlotte. But, for all of the good news, far too many North Carolinians are still worse off today than they were before the Great Recession.
Leaders in Raleigh need to be constantly reminded that we cannot accept growth without broad prosperity. Too many people are out of work, too many paychecks are coming up short and too many communities are being left out of the recovery.
We have neglected the investments needed to provide our children a 21st century education and our working men and women skills training; to build a transportation system that can move at the speed of business; to help small businesses withstand the competitive pressure of the modern market. This lack of investment has blunted the recovery and left the deepest problems with North Carolina’s economy unaddressed.
Instead of taking pride in finally escaping the recession, we should be focused on building a future that North Carolina can really be proud of.
Patrick McHugh is a Policy Analyst at the N.C. Budget and Tax Center.