How and why NC’s economy still leaves so many behind
Recovery, huh? New report explains how and why NC’s economy still leaves so many behind
By Patrick McHugh
[Editor’s note: Despite continuing claims from legislative leaders and conservative think tanks that all is well with the North Carolina economy, our senses and instincts tell us otherwise. Now, thanks to a new and important report from the N.C. Budget & Tax Center (“Ten Years After the Great Recession, N.C. has an Economy that Works for Some”) we have the data and analysis to back up those concerns. As the author, Dr. Patrick McHugh, explains, a decade after the onset of the Great recession, things are anything but rosy for a large segment of North Carolinians whose wages and wellbeing remain stagnant. The report deserves to be read and shared widely.]
The ten years since the start of the Great Recession have done little to address the fundamental economic problems facing North Carolina. The worst of the recession may have passed, but many barriers to economic opportunity and security remain.
This report documents the persistence of long-standing economic inequalities (particularly along racial lines), a deepening divide between wealthy investors and everyone else, a lack of robust job growth overall, and the continued concentration of economic opportunity in a few metropolitan areas. None of these pathologies are natural, but rather the lack of adequate policy response, and their continued existence demands real solutions.
Job growth not cutting it
The Great Recession was a historic event that drove families from their homes, destroyed once-stable careers, and left entire communities grasping to comprehend how everything went so disastrously wrong.
The Great Recession created a deeper hole than any downturn since the Great Depression, and the subsequent recovery has been slower than any growth period in recent memory. This section compares the current period to the previous four recessions, shows that North Carolina has not been creating enough jobs to meet the demands of a growing population, and documents the overall decline in the share of North Carolinians who are working. All of these data point to the severity of the Great Recession and the inadequacy of the subsequent recovery.
A historically meager recovery
Employment in North Carolina decreased by 7.8 percent during the Great Recession, nearly double the decline we experienced during the 2001 recession and almost four times worse than the job losses set off by the previous two recessions in 1981 and 1990.
Job losses were not just more severe, they kept piling up for a much longer time in the Great Recession than in the four downturns that preceded it. It took almost seven years (82 months) for North Carolina to claw its way back to the number of jobs that existed before the recession. By comparison, the state regained pre-recession job numbers within 54 monthsof the 2001 recession, and only 22 months in the wake of the 1990 and 1981 recessions.
Job growth not meeting demands of a growing state
Simply looking at the number of jobs does not fully reveal the gap between the supply of jobs and the need for employment in North Carolina. Like many states in the south and west, North Carolina’s population has continued to expand over the past decade, creating even more demand for work during a time when job opportunities have been slow to expand.
Total employment in North Carolina is 6.5 percent higher than it was on the eve of the Great Recession, but the state’s population has expanded at more than twice that rate (15.6 percent) over the same period.[Read more…]