Rob Christensen

Why NC’s pattern of growth may now be hurting the state

Josh Outlaw, left, uses a plasma torch to cut a piece of steel as fellow students look on during a metal-working class at Scotland County High School in Laurinburg, N.C., on Sept. 23, 2016. To address lagging growth in smaller metropolitan areas, some people suggest policies that foster manufacturing jobs, expand work-based training programs and provide more support for community college and strong industry input in designing its curriculum.
Josh Outlaw, left, uses a plasma torch to cut a piece of steel as fellow students look on during a metal-working class at Scotland County High School in Laurinburg, N.C., on Sept. 23, 2016. To address lagging growth in smaller metropolitan areas, some people suggest policies that foster manufacturing jobs, expand work-based training programs and provide more support for community college and strong industry input in designing its curriculum. cliddy@newsobserver.com

North Carolina may be a victim of its own success.

When the Tar Heel State industrialized in the early 20th century, it did so in a gentle way, with textile, apparel, furniture and tobacco mills and factories spread out in small communities across the state.

By the mid-20th century, North Carolina was the most industrialized state in the South. But it industrialized in such a way as to keep its small-town character.

That allowed people to retain a comfortable lifestyle that they preferred: knowing their neighbors, plenty of room for gardens, or even commuting from the farm; and the pleasures of the woods and nature not too far away.

But what once was North Carolina’s strength, may now be its weakness.

A new study by the Brookings Institution, a Washington D.C.-based think tank, found that small cities have had a much more difficult time recovering from the Great Recession than larger cities.

The survey found that between 2009 and 2015, private employment grew almost twice as fast in the larger metropolitan areas (those with 500,000 or more people) compared to the smaller metro areas (those with 80,000 to 215,000 people.) It also found that income grew 50 percent more in the larger areas.

That study will come as little surprise to North Carolinians, where we have seen the state’s largest metro areas, particularly the Triangle and Charlotte areas, grow like kudzu, while smaller areas have lagged behind – areas such as Hickory, Lenoir, Morganton, Jacksonville, Rocky Mount, Goldsboro, Burlington, Wilson, Salisbury, Statesville, Lumberton, Kinston and so forth.

The same pattern holds true across the country as smaller cities – which tend to be more reliant on traditional industries hammered by trade – have had difficulty overcoming the shock of plant closings, while the larger metropolitan areas have the accumulation of talent to drive innovation.

“Bigger cities are more productive,” wrote Eduardo Porter in The New York Times earlier this month. “They are more innovative. They draw better-educated workers by offering them higher wages. They develop a richer variety of industries. It should not be surprising that they are growing faster.”

As Porter notes, all of this has political implications: During last November’s elections, Republican Donald Trump won the votes of voters in metropolitan areas with fewer than 250,000 people by a 57 percent to 38 percent margin. Perhaps the slogan “Make America Great Again” had greater resonance in areas of economic stagnation.

The same pattern held true in North Carolina, where Democrat Hillary Clinton carried the economically thriving major metropolitan areas, but Trump carried the state by winning in the struggling small towns and in the rural areas.

The legislature, dominated by small-town and rural Republicans, has been wrestling with the problem of how to spur growth more evenly across the state. They are not alone.

“It’s a wickedly hard problem to which economists have as yet detailed few solutions,” wrote Mark Muro and Jacob Whiton of Brookings’ Metro Policy Program last week. “After all, what’s driving the rise of the big and the decline of the small are the powerful, ubiquitous forces of agglomeration amplified by technology, which are powering growth and more growth in large metropolises at the expense of the drift of smaller, less educated and techy places.”

Some argue that we should just let the free market work, which of course means the continued decline of small towns and the continued rapid growth of the large metro areas. The smartest young people from small-town America will continue their exodus to the cities.

Muro and his Brookings colleague Amy Liu recently cited a number of ideas about what government might consider doing to help towns and smaller cities.

They include policies that foster manufacturing jobs, improve internet access in rural areas, expand work-based training programs such as apprenticeships, provide more support for community college and strong industry input in designing its curriculum, and move more federal offices out of the Washington, D.C., area.

Most of those ideas do not fall neatly along Republican or Democratic lines.

Some ideas mainly backed by Republicans, such as corporate tax cuts, might help.

Muro also notes that some policymakers may want to rethink traditional approaches to attracting industry. Just setting aside land for industrial sites or offering incentives may not longer be enough, he argues. He notes that Amazon, in searching for a site for a second headquarters for 50,000 employees, is looking for an area with cutting-edge universities, top-level infrastructure, and cultural diversity.

This is what the future may look like.

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