NC Budget and Tax Center, Poverty and Policy Matters

A not so Carolina Comeback

When the Wall Street house of risk came crashing down in 2007, it wrecked local economies across North Carolina. Business finance dried up, people and businesses bought less, home values took a hit, and so employment dropped, sharply. Along with the rest of the U.S., we have seen the worst days of the recession pass and some stability and growth return. Business credit is still tight, consumer spending looks to be getting stronger, and the housing market is definitely on the rise again, but employment has been very slow to grow.

We’ve heard a lot about the “Carolina Comeback” recently, and expect to hear even more during 2015. The story generally goes that slashing state taxes and spending has resurrected an economy that was broken by federal policy, not to mention a century of democratic rule in the legislature. The problem with this story is that the comeback is a national one, most of which has nothing to do with changes to North Carolina policy.  A far better explanation, as can be seen in the charts below, is that the current recovery is neither robust nor unique to North Carolina, but instead follows the national and regional trajectory.

2014 End of Year Charts_slowest recovery in generations

Compared to the previous three major recessions, the current recovery has been stubbornly sluggish. It took more than five years for our state to get the jobs that were lost during the recession back, where the damage from the previous three recessions was repaired in less than half that time.

If the first chart looks familiar, it should. National employment trends over the last several recessions look very similar to what we have seen in North Carolina. This brings us to the second problem with the Carolina Comeback myth, it is not a Carolina story.

2014 End of Year Charts_regional job growth

As can be seen below, North Carolina employment has generally followed the same trend as other states in the southeast. From 2000 on, the share of working age people who have employment has declined, with a particularly sharp drop in 2008 and 2009 as the Great Recession hit. Over the last few years, employment growth in North Carolina has been modestly stronger than most states in the Southeast, but even after these comparatively strong years, North Carolina remains decidedly middle of the pack.

All told, there just isn’t much real evidence of a distinctly Carolina Comeback. The recovery has been agonizingly slow in North Carolina as it has been across the country. Credit and blame do not have a home address, they knock on many doors and visit many living rooms. We have a lot to do as a state and as a country to adapt to the 21st century economic system. Moving into 2015, we should focus on what can be done to address the problems that remain, rather than trying to wish them away with nice sounding phrases.

15 Comments


  1. LayintheSmakDown

    December 24, 2014 at 5:33 pm

    Interesting numbers. We are certainly having a hard time getting back from the 140+ years of communist/progressive rule by the democrat party. That combined with the headwinds from the Obama disaster it is a wonder the Republicans have been able to get us into such good shape so quickly.

  2. ML

    December 24, 2014 at 6:07 pm

    When were communist running the state? I don’t recall any communist candidates ever…

    Nice try team civitas/nazi socialist party.

  3. david esmay

    December 24, 2014 at 8:36 pm

    The NC GOP has turned a once great state in another red southern banana republic whose dependence on fed dollars will only increase as their failed economic policies expand.

  4. LayintheSmakDown

    December 25, 2014 at 9:21 am

    Communists…you know the democrat party….progressives. Look it up at the links, even Wikipedia has the correlation when you research there. There is this thing called “Google” where you can research the ideas you are associated with. Although, there is one place called “dogpile.com” that would be more appropriate for when searching those topics….just to stay in the theme of things.

  5. ML

    December 26, 2014 at 4:38 pm

    Communist are not democrats. Oh I forgot everything on Google is always right. Nice try genius.

  6. LayintheSmakDown

    December 29, 2014 at 9:09 pm

    I do know that not all communists are democrats. But the communist party sure has a strong hold on the democrat party.

  7. ML

    December 29, 2014 at 10:35 pm

    Republicans are fascists. See I can do it too…

  8. LayintheSmakDown

    December 30, 2014 at 9:14 am

    Fascism actually has more to do with the liberals if you think about it.

  9. ML

    December 30, 2014 at 9:47 am

    In theory but not in reality. Both utilize government, however, in completely different ways. Fascist regimes in the real world utilize the government for totalitarian and authoritarian purposes. And as much you fix news fascists want to label obama as such, healthcare for everyone does not make it so.

  10. LayintheSmakDown

    December 30, 2014 at 8:05 pm

    Thanks for verifying my point. The most authoritarian people ever have been of the liberal/progressive/fascist view.

  11. ML

    December 30, 2014 at 9:10 pm

    How so?

  12. LayintheSmakDown

    December 31, 2014 at 6:48 pm

    Not sure what your question means, but do you mean I should list people like Stalin, Mao, and Hitler?

  13. Alan

    January 1, 2015 at 12:37 pm

    LSD, I’m seriously starting to wonder about your mental health. If you’re having issues with anger & rage, confusing the voice(s) in your head with reason, then please seek out professional medical help urgently.

  14. LayintheSmakDown

    January 1, 2015 at 3:26 pm

    I am not sure why you are concerned with me, I am just fine and in a calm state. I think it is that whistle on the crazy train you are hearing. Tell Fitzy to up your meds man.

  15. Alan

    January 2, 2015 at 10:42 am

    Sounds like you are in denial, suffering from ODS (Obama Derangement Syndrome).

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