The NC GOP economic development strategy: Outdated and underperforming

by | Jun 11, 2021 | Economy, Editor's Blog

We’ve now got a solid ten years of Republican rule in North Carolina and we can do some comparing. The GOP likes to portray North Carolina as a struggling state that had difficulty attracting industry and good paying jobs because of its lousy business climate. In fact, North Carolina fared better under Democrats than it has under Republicans. 

Last week, I noted that North Carolina’s population growth rate slowed substantially under GOP leadership. Now, we can compare economic growth and see that all the tax cutting did less to boost our economy than Republicans promised. In fact, under those tax and spend Democrats in the first decade of this century, the state’s economy grew faster than in the second decade, more evidence that Republicans are bad for our state. 

More importantly, the main measure that Republicans use to evaluate the business environment, taxes, is largely bunk. Despite massive tax cuts that shifted the tax burden from the wealthy and corporations onto the backs of the middle class, North Carolina’s economy only grew by about 12% from 2011 to 2020, the period of GOP control. In contrast, the economy grew by about 20% from 2001 to 2010, the period Republicans bash as a poor business environment. There’s little evidence that tax cuts for the wealthy offer any long-term benefits to the economy. Instead, they just exacerbate the income inequality that has plagued the nation. 

Personal income growth in North Carolina is among the lowest in the nation. During the 10-year period of GOP rule, our income grew by 19.1% compared to 25.5% in the nation as a whole. The state is ranks 38th in the country in terms of income growth, lagging significantly behind our neighbors in South Carolina and Georgia. We’re not even a regional powerhouse.

Despite the promises of conservative governance, we aren’t getting much. Our GDP and population grew slower under Republicans than Democrats. Our income growth lags behind most of the country. The only thing the GOP can brag about are low taxes and that’s left our core services under funded. Our per pupil spending is an embarrassing 45th in the nation and our public university system has seen its budget decimated. 

The GOP bought into a failed ideology that believes low tax, low wages, and no unions are the only economic development tools a state needs. They are using the same strategies that that the states used in the 20th century to attract northern industries to the South. But the 21st century brought us a technology and knowledge-based economy. Companies are looking for more than low-skilled workers with little education and low taxes to compete. They see education as tied to their success. A well-trained and well-educated workforce makes them more competitive, more so than low taxes. 

The modern day Republican party is trying desperately to take us back to the past. They want a more homogeneous society where our history is a nicely packaged story of White Americans bringing liberty and opportunity to the downtrodden. They want an economy where people are happy working long hours for low wages under harsh conditions. They want to take us there by slowing our economic and population growth, stifling our education system, and making the state uncomfortable for anyone who doesn’t fit into their Leave It to Beaver stereotype of the American family. They want to go back to a place that never existed.


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