Governor McCrory is trying to convince everyone that, thanks to his team’s leadership, our economy is in great shape. In defending a largely status quo budget for next year, the Governor is clearly happy with where North Carolina is economically, and thinks that he deserves plenty of credit.
But, as millions of North Carolinians can attest from daily experience, these are not the best of times, not by a long shot. North Carolinians are right to wonder why the governor’s description of the economy doesn’t match what they deal with every day, and we should not be so quick to accept the current state of affairs as the full realization of North Carolina’s potential.
Unfortunately, the Governor is one of many voices trying to rebrand economic mediocrity as success, ignoring how little the policies enacted and implemented under his watch have done for most North Carolinians.
While the picture in many parts of the state certainly looks better than it did in the depths of the Great Recession (which ran officially from December of 2007 to June of 2009 and reverberated for several years after that) North Carolina’s economic record over the last few years hasn’t been much to write home about.
Take unemployment for example. North Carolina’s unemployment rate trailed 35 states and the District of Columbia last month. What’s more, when one takes into account all the people who have simply given up looking for work, the real unemployment rate is in the double digits. While we have added jobs over the last several years, North Carolina’s population has also swelled, leaving us well below the level of employment that was the norm before the recession. To make up the jobs deficit, North Carolina would need roughly 400,000 more jobs that exist today.
North Carolina also falls well short of the mark on wages. With hourly wages in North Carolina more than $2 under the national average, North Carolina workers end up hundreds of dollars short by the end of the month. The wage deficit in North Carolina has actually expanded since the beginning of 2013, which is particularly disheartening given that wages nationwide have actually been growing at a modest rate. Meanwhile, pay for state employees has fallen behind the cost of living by almost nine percent since 2010. In 2014, North Carolina teacher pay ranked tenth out of 12 southeastern states, ahead of just Mississippi and West Virginia.
The Governor and legislative leaders would like you to believe that we’re headed in the right direction thanks to their brand of small government conservatism. Reducing taxes, slashing state spending and decimating unemployment insurance were all supposed to spur growth and transform North Carolina into a veritable economic juggernaut.
But ask yourself “If this slash and burn approach works so well, why have a so many states, including Utah, Nevada, Colorado, Oregon, Florida, Washington, Idaho, California, Georgia, South Carolina, Texas, Delaware, Arizona, Tennessee, and Hawaii all fared better even though most have not pursued such an aggressively regressive path?” While North Carolina’s job creation performance has been decent, all 15 of these states have actually created jobs at a faster clip than North Carolina since McCrory moved into the Governor’s mansion at the beginning of 2013.
North Carolina is relearning the hard truth that trickledown economic policies don’t deliver broadly shared prosperity. Some states that have outperformed North Carolina over the last several years, like California and Washington are hardly the darlings of anti-tax crusaders. California actually raised taxes on its wealthiest citizens, and has outperformed North Carolina economically ever since.
North Carolina doesn’t measure up much better when compared against out neighboring states either. Personal income in North Carolina actually expanded less than all of our immediate neighboring states over the last year, and several of our peers in the southeast have posted better job creation records as well.
As the 2016 session of the General Assembly gets underway, let’s hope that Governor McCrory and legislative leaders finally take an honest look at North Carolina’s so-so economic performance.
We can be leaders again, but only if we stop congratulating ourselves on being mediocre.
Patrick McHugh is a Policy Analyst at the North Carolina Budget and Tax Center.