Summary:
- North Carolina’s economic performance has been decidedly average
- Promises of a supercharged economy have not borne out
- State lawmakers have left rural areas especially behind
The headline is catnip for politicians of any stripe: “North Carolina is America’s Top State for Business,” said CNBC this year. After years of haranguing Governor Cooper for supposed economic mismanagement, partisan critics were quick to take credit for the news that was – of course – not because of Governor Cooper’s leadership, but their ideas instead.
Growing North Carolina’s economy, and the jobs and opportunities it creates for all our residents, is a key responsibility for our state leaders. Yet how has North Carolina’s economy actually fared since Republicans ushered in massive changes in state governance in 2011, and overhauled the tax system in 2013?
As it turns out – not so well. Despite bombastic promises of “explosive” growth, North Carolina’s economy has instead just tracked the national economy at large, while actually trailing behind many of our neighboring states in the southeast. Rather than turbocharging economic growth, as partisans repeatedly promise is right around the corner, economic policy driven by right-wing ideological doctrine has instead held it back. Not only that, but North Carolina’s economy has grown much more imbalanced, leaving the vast majority of our rural areas behind.
North Carolina is not an economic dynamo
Since 2011, the United States real GDP overall has grown approximately 26% in real terms, from $15.89 trillion to $20.14 trillion in 2022. That comes out to about 2.1% GDP growth a year, which is a healthy and impressive growth rate for an enormous, complex and mature economy like that of the United States. North Carolina’s economy has grown at almost an identical rate, from $443.3 billion in 2011 to $559.5 billion in 2022 – also a growth rate of 26% in real terms.
In other words, North Carolina’s economy has been average for the United States as a whole.
In fact, North Carolina’s generally unexceptional economic performance – neither poor, nor noteworthy – is part of a pattern. Across key economic indicators, North Carolina has mostly tracked regional and national performance.
This was not always the case. In the decade prior to 2013, when the newly elected Republican legislature began radically reshaping the state's tax structure, North Carolina had actually grown much faster than both its regional neighbors and the U.S. as a whole - not only in GDP, but also in job growth and personal income.
More recently, North Carolina has begun to even under-perform states like Virginia on employment indicators, where Democratic leadership successfully raised the Commonwealth's minimum wage, and dire predictions of "job destruction" were (again) proven wrong.
Who is "the economy," and where is it?
An awkward juxtaposition for North Carolina's ranking as the "Best State for Business" by a cable news television network is its simultaneous ranking, for the second year in a row, as the "worst state for workers" by the international anti-poverty nonprofit Oxfam. In a ranking determined by factors that actually affect workers' lives - the minimum wage, legal labor protections, guaranteed paid leave availability and more - Oxfam found that North Carolina's environment for working people was one of the most hostile in the country.
Our Daily Bread: The Hourly Workers Package outlines a series of common sense, actionable reforms for North Carolina's leaders to put our state's hourly workers first in line for growth.
North Carolina's economic growth has also become more and more uneven geographically over the last decade-plus. As we wrote in The Great Carolina Slowdown, most of North Carolina's economic growth is increasingly in its major metro counties. Fully half of all economic growth between 2011 and 2020 was in Wake and Mecklenburg counties alone:
This trend has been a disaster North Carolina's rural areas:
Along with a shrinking population, many rural counties are experiencing significant economic hardship. Outside of the six fastest-growing counties in North Carolina, the median county's economy grew at an annualized rate of only 1.5% between 2011 and 2020. According to the NC Rural Center, rural counties have lost thousands of small businesses (those with fewer than 10 employees) in this time period, as both customers and economic activity have moved away. There has also been nearly $2 billion less loaned to small businesses there - a loss of two-thirds of total investment capital, meaning that it's even harder for those businesses left to grow. (Read more)
For over a decade, right-wing partisans in North Carolina have pursued a narrow, ideological economic policy of upward redistribution of wealth and allowing basic structures of government to wither. These have had exactly the consequences their critics claimed they would: it has badly hurt rural areas, children, and low-income North Carolinians. But it also has not accomplished its purported goal of superior economic performance.
The numbers don't lie; it takes people to do that.
