Economic underdevelopment

by | Nov 14, 2013 | 2014 Elections, Economic Development, Editor's Blog | 3 comments

There’s a lot of talk about North Carolina’s stubbornly high unemployment rate and job recruitment efforts lately. Commerce Secretary Sharon Decker says that we can blame a lot of our woes on people who have moved to the state to find employment but have not been successful. John Hood, President of the John Locke Foundation, says that, contrary to popular opinion, our economic sluggishness is not confined to rural areas but includes urban centers like RTP and Charlotte.

Republicans’ solutions to these problem hinge on their tired mantra of less taxes and lower regulations. Gary Pearce, though, speculates that those solutions may backfire and with good reason. He asks whether companies are going to find the workforce they want in a state that underfunds education, discriminates against gays and lesbians and generally panders to the narrow-minded views of religious fundamentalists.

Decker’s assertion is based on data from 2008 to 2010 when the state was still one of the fastest growing in the nation. We’ve had almost three years of anemic growth since then. Her rationale sounds more like an excuse than anything. The GOP enacted tax cuts in 2011 that they said were going to juice the economy. Obviously, it didn’t work.

As for Hood’s assessment, he says our metros aren’t performing as well as some would imply and that the state, overall, is not competitive as a place to make a living. He sites to show that NC is ranked 38th overall as best place to make a living based on a variety of factors including cost of living, housing prices, energy prices and state and local taxes. What he doesn’t mention is that we are falling, not gaining, on the Moneyrate scale. Under Republican rule, we’ve dropped four places since 2011. So maybe their economic policies are making us less attractive, not more so.

In contrast, Pearce’s speculation is right in line with the assessment of Raleigh’s economic development manager. He says that Raleigh competes with larger cities because of its educated workforce and amenities like parks and the arts. So cutting funding to community colleges, public universities and our public schools doesn’t seem like much of a strategy.

Republicans in North Carolina, like the Europeans, have decided that austerity is the right answer to our economic woes. They’ve had control of government for three years now and it hasn’t worked out so well. Instead of attracting industry, they are scaring them with their regressive taxes, puritanical philosophy and cuts to education. By 2014, they will own the economy here in North Carolina. They better hope for a quick uptick.


  1. Mike Voiland

    Having just retired from the UNC system, I can unequivocally state that anyone who believes that the UNC system has not been harshly cut since 2010 is ignoring reality. I directed two statewide programs designed to advance the development of the state’s natural resources, and those programs are now a shadow of what they were before the Republican-led cuts to higher ed took hold. If ever there was a state that can showcase a history of how public investment in higher edcuation and R&D–even in lean economic times–can pay off BIG in terms of job development and corporate expansion, it is NC (see RTP, for just one example).

  2. Dale Smith

    This article is putting forth misleading and in many cases inaccurate information. The republicans have NOT made cuts to education. The education budget is higher this year than it has ever been. In addition, republicans aren’t putting forth “regressive” taxes. They’re holding firm on low taxes for our state’s citizens and are ending the wasteful spending that brings a need in any state to increase taxes. Republicans have always been a party of low taxes vs the democratic party with their mantra of tax and spend. As for “puritanical philosophy”, it is only someone’s opinion that Christian principles are negative and portrayed as “puritanical”. Economic development in North Carolina under McCrory has been ticking up nicely. Just saying it hasn’t doesn’t make it true.

    • Thomas Mills

      Sorry, but Republicans cut funding the University system and the community colleges. Funding for public schools is not at an all-time high. It is still below the level in 2008-2009. It’s just higher than it was after GOP cuts for 2012-2013 and is far below the rate of inflation and growth in population. In addition, their tax cuts are certainly regressive. They did away with the Earned Income Tax Credit while cutting taxes disproportionally for the wealthiest citizens. To put it another way, they raised taxes on the working poor and cut taxes for millionaires. As for economic development, we still have one of the highest unemployment rates in the nation and the only reason it has fallen is people have given up looking for jobs.

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