Prosperity Watch Issue 25, No. 2: North Carolina's job growth leaving Western and Eastern regions behind

After experiencing significant job losses during the Great Recession and only sluggish employment growth in the years since, North Carolina’s labor market is finally starting to generate some positive news. Since the beginning of 2013, the state’s unemployment rate has begun to drop and in April fell below 9 percent for the first time since 2009.  Although much of this improvement is due more to unemployed workers dropping out of the workforce rather than moving into jobs, North Carolina has experienced meaningful employment growth over the past two years and begun to make significant progress in replacing the 326,000 jobs lost during the recession.

Unfortunately, the 215,000 jobs created in North Carolina since deepest trough of the labor market have not been evenly spread across the entire state. Over the past five years, the majority all employment growth has occurred in the Triangle, Charlotte, and Central Piedmont regions, based on employment data from the North Carolina Employment Security Commission. These two regions include populous metropolitan areas and represent a significant share of the state’s population and labor force. In fact, nearly 80 percent of the increase in the state’s total employment level since March 2008 occurred in these two regions.

At the same time, a disproportionate share of the state’s job losses over the same period has occurred in non-metro areas of the state—in particular, the rural counties in Western and Eastern North Carolina. Of the 20 counties with the largest decline in employment levels, 14 are located in these two regions. While the total labor force in these two regions represent less than four percent of the state’s total labor force, employment decline in these counties represent 18.2 percent of state’s total employment decline since 2008. Moreover, the average unemployment rate for these 14 counties (12 percent) is significantly higher than the 20 counties with the highest employment growth over the last five years, which have an average unemployment rate of 8.5 percent.

The challenging employment landscape in counties in the Western and Eastern regions of the state is largely a result of declining industries—particularly manufacturing. Many of these counties have significant minority populations and persistently high poverty. Reversing these job losses and ensuring long-term sustainable employment growth should be a critical priority for our state’s policy makers that will likely require significant investments in job training in targeted industries most likely to produce robust employment growth and pay quality wages.

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