North Carolina was ranked as one of the states with the highest unemployment and poverty rates in the nation by a recent report the Center for a Better South — yet the state has seen more economic growth than most.
According to the think tank’s report, North Carolina is ranked sixth in unemployment and 17th in highest state tax burden. The report also listed North Carolina as 11th for economic growth and the fourth for the best state for business.
Ferrel Guillory, UNC journalism professor and an expert in Southern politics, attributes the gap between the state’s roaring economy and unemployment increase to the change in the industries that drive the economy.
Guillory said since 2000, the state experienced a sharp recession from 2000 to 2001 and then a larger one from 2007 to 2008.
The two recessions devastated old North Carolinian industries including textiles and tobacco. This left the state with high poverty and high unemployment in the labor force, while strengthening the metro areas, leading to the diversification of jobs.
The professions that now fuel the economy are the banking jobs in the Charlotte metro area and the jobs in the Research Triangle Park, high technology and health care.
“N.C. now has sustainable growth in big metro areas for higher skilled occupations,” Guillory said, adding that because these jobs require a higher level of education, many low skilled workers living in rural towns have been left unemployed.
“The problem now is how to train blue-collar workers who have worked in textiles and furniture for new jobs and jobs that are not in their community.”
In order to prepare the people of North Carolina for the changing job market, Guillory said it is imperative to strengthen universities and the community college system.
“The jobs for the next generation of North Carolinians will require degrees beyond high school,” Guillory said.
The better educated the next generation is, the higher their chances will be to receive jobs in the new industries that fuel the state’s economy.
Besides unemployment stemming from a diversification of jobs, the state’s high unemployment rate can also be attributed to North Carolina’s high population growth rate.
“People are moving here, many without jobs, searching for work,” said Steve Yost, president of N.C.’s Southeast, a regional economic development partnership.
As far as the state tax burden affects the economy, Yost said his organization has received conflicting reports saying that the state has either a high or low tax burden.
But the state’s new changes to the tax structure this year will make taxes friendlier to businesses in the hopes of making North Carolina more competitive, Yost said.
Despite North Carolina’s high unemployment and a high state tax burden, Andy Brack, president of the Center for a Better South, said North Carolina still ranks better than other southern states including Alabama, South Carolina and Arkansas.
“North Carolina has a lot of work to do to reduce unemployment,” he said. “It’s doing pretty well in providing a good business climate.”
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