Prosperity Watch Issue 60, No. 3: North Carolina is not a job growth leader

April 19, 2016

There’s nothing in North Carolina’s economic record of late that should inspire adulation or contentment. The worst of the recession may be past, but our recovery is hardly the envy of the nation.

As can be seen above, 15 states created jobs at a faster clip than North Carolina over the last year. Employment in our state increased by 2.5% over the last 12 months, which is good enough to slightly outpace the national average, but not enough to land us among the national leaders.

The reality is that North Carolina is not leading at creating broadly shared prosperity. Reducing taxes, slashing state spending, decimating unemployment insurance, were all supposed to make North Carolina into an economic juggernaut. What we got instead is economic mediocrity. Wages remain below the national average, unemployment is above the national rate, and entire regions of the state have missed out on most of the growth that has happened over the last few years.

North Carolina, in fact, ranks behind states like California whose leaders are choosing policies that seek to include more people in the economy and ensure revenue is adequate to support the foundations of opportunity. When North Carolina was cutting taxes, California was stabilizing their finances by asking their most fortunate residents to kick in a bit more. While the chart above only captures each states’ economic growth over the last year, California has actually outperformed North Carolina since 2013, when the first round of major tax cuts were passed here. This is yet more evidence that cutting taxes is no surefire way to boost economic growth.

Modest growth in North Carolina is even more concerning given how much ground North Carolina had to make up in the wake of the recession. Manufacturing states like North Carolina tend to suffer the most dramatically when a market failure like the Great Recession temporarily zaps demands for goods, leaving a larger deficit to overcome when the economy stabilizes. As a result, employment in has grown in North Carolina by 3.4% since the end of 2007, less than the national 3.9% rate of growth.

 

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