Ned Barnett

Inequality threatens Triangle’s rise

On the surface, the Research Triangle region is a model for economic success. It sits high on many “best place to live” lists. The unemployment rate is low as its high-tech industries flourish. The centers of Raleigh and Durham are booming.

But the numbers beneath the surface show that success is built on shifting sands. Increases in the black and Hispanic populations are driving growth, but many of those young people lack the education and job skills that will be needed by the region’s employers. Along with those gaps, the region’s middle class is shrinking, and poverty is growing.

These prospects and patterns were among the findings of a report issued last week by the Triangle J Council of Governments and Kerr-Tar Regional Council of Governments. The groups looked at their combined 13-county Research Triangle region covering most of east-central North Carolina.

The study was part of a federally funded program that helps regions integrate planning in housing, transportation, land use and economic growth. This report looked closely at planning in response to demographic trends. One of those trends is the growing income inequality between whites and people of color, a designation that includes blacks, Asians, nonwhite Hispanics and people of mixed race.

The report says that minorities tend to be lower paid and more often are poorer as compared with white workers and the white population. If all races had the same average annual income, the report says, the region’s gross domestic product would rise by $20 billion, or 19 percent.

That shortfall isn’t a problem just for minorities. It’s a problem for the region’s economic future. Since 1980, the region’s population has more than doubled from 900,000 to more than 2 million. During the same period, the share of residents who are minorities has climbed from 29 percent to 39 percent. By 2040, minorities will become the majority in the region.

Yet many minority youth lack the education and access to skills training to meet the needs of a workplace in which 42 percent of the jobs will require an associate’s degree or higher by 2020. For now, these young people are filling the bottom half of a regional economy in which low- and high-paying jobs are growing, but middle-income jobs are shrinking.

Equity isn’t simply a matter of fairness. It has become a matter of economic vitality. Unless education and training can close the gap in skills and earnings, the region will lack enough people with the needed skills and people who can buy homes, cars and goods.

“The education level of African-Americans and immigrants is not keeping up,” says Sarita Turner of PolicyLink, a research institute that conducted the federally funded study in partnership with the two regional groups and the University of Southern California’s Program for Environmental and Regional Opportunity. “When the people who are driving growth are not prepared for current and future jobs, it looks concerning for the region’s ability to compete with the rest of the country.”

The report says the same, noting that “ensuring that people of all races and ethnicities can participate and reach their full potential is more than just the right thing to do, it is an economic imperative.”

The ability to respond effectively to this demographic trend is complicated by the state’s political priorities. When the state should be investing more in education, the Republican-led legislature is shortchanging public schools and making a public college education more expensive and less accessible for students. Lawmakers are trying to lure businesses by cutting taxes, but businesses will instead be driven off by a workforce that increasingly lacks the education and job skills needed to succeed.

Some state Republican lawmakers have begun to acknowledge the growing income inequality in North Carolina. Unfortunately, they see it as an urban vs. rural divide and have proposed shifting sales tax revenue from urban to rural counties. But the report makes clear that poverty is growing in cities as well as in rural areas.

In Wake County, for instance, the number of people living in poverty more than doubled between 2000 and 2012, while the percentage rose by 68 percent across the region. Wake County Commissioner Caroline Sullivan notes that Wake has 100,000 people living below the poverty line, more than the poor population of 73 other counties combined. “That puts urban-rural, rich-poor in perspective,” she says.

The report offers a series of steps that would reverse the region’s growing income inequality. They include strengthening the public school system, creating universal preschool, reducing “zero tolerance” school discipline that knocks children off the education track, increasing apprenticeship programs, expanding public transit, adding affordable housing in middle-class neighborhoods and getting universities, hospitals and large employers to focus on hiring and training people of color.

It’s not too late to better equalize and stabilize the regional economy, but at the rate solutions are being ignored, it soon will be.

Editorial page editor Ned Barnett can be reached at 919-829-4512, or nbarnett@newsobserver.com

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