Commentary, NC Budget and Tax Center

The many economies of North Carolina

Talking about a single North Carolina “economy” doesn’t make very much sense. Whenever new labor market data comes out, there is talk about how the North Carolina economy , or the US economy, or the global economy, are doing. The macroeconomic perspective is important, and talking in broad terms is convenient, but the economy is not some monolithic abstraction, a disembodied thing that we can’t really see. Even in an interconnected global market, the day-to-day economies that human beings experience are local. The economies we see impacting our neighborhood, our circle of friends, our family, and our wallet, those are the economies that we live in.

2014 was a very mixed economic bag for local economies in North Carolina. As will be shown below, parts of North Carolina are growing quite nicely, but it is still very tough sledding in a lot of communities across the State.

2014 End of Year Charts_uneven recovery

Location, location, location warns the old business adage. That’s great if you’re in a hot spot, but as the map above shows, most of North Carolina is not booming. While the November data (see here for the latest county data) are not updated for this map, the fundamental story has not changed. On the one end, counties that are in or around metro centers have largely surpassed pre-recession levels of employment, with some counties posting 10% or greater gains. That sounds like healthy growth, and it is. On the other end, however, many counties have not experienced what anyone would consider a return to robust economic performance. Sixty of North Carolina’s 100 counties have not gotten back to their pre-recession levels of employment, and in fifteen counties current employment is more than 10 percent lower than it was in 2007.

One could argue that some of the shifts seen here are simply the result of increasing urbanization, a trend that goes back well before the Great Recession. As more and more working age people move toward urban centers, the employment level in many rural areas should naturally drop. However, the losses in employment that many counties have experience cannot be entirely explained by urban migration. Based on data from the North Carolina State Demographer, there are only 23 counties in North Carolina where the change in employment between 2007 and 2014 outpaced the change working age residents. Put another way, the growth of employment has not kept up with working age population in more than three-quarters of the counties in North Carolina.

2014 End of Year Charts_barriers for communities of color

Geography is not the only knife dicing up the North Carolina economy. As can be seen above, the recovery is less complete in communities of color around the state. Unemployment remains higher than it was before the recession for all ethnic groups, so there’s still cause for concern across the board. However, unemployment remains even more elevated for black and Hispanic North Carolinians. The unemployment rate for African-Americans remains 2.2 percentage points above pre-recession levels and for Latinos   1.7 percentage points compared to 2.7 and 1.3 percentage points nationally for both groups respectively.  While African-Americans in North Carolina are doing better than the national average, the change in the unemployment rate for this group is nearly twice that for whites in the state who saw their unemployment rate increase by just 1.4 percentage points above pre-recession levels.

Of course this is hardly an exhaustive analysis of the geographic and social lines that shape the economic landscape of North Carolina. But when we start to look more closely at specific local economies, we see very different stories about different parts of our state. While we celebrate the economic bright spots, we can’t let struggling North Carolina communities fall into shadow.

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