By Rob Schofield
September 11, 2013
If there is one thing that conservatives and progressives ought to agree on, one would think that it would be the importance of widespread prosperity. Simply put, it’s good for a state (or city or country) to have as high a percentage as possible of healthy, educated and comfortably well-off people.
For the last several years, of course, such widespread prosperity has been on the wane in North Carolina. Oh sure, for a chunk of the population near the top, things are better than ever, but for most North Carolinians, times are tougher. Incomes are falling or flat, essentials of modern life are more expensive and, in general, the future just seems more fragile and uncertain.
In a sane world, such a state of affairs would give rise to a coordinated and all-out effort by state government in all of its guises to reverse these trends. After all, save for securing basic safety and freedom for the citizenry, what could be more important?
Regrettably, such an effort has not been forthcoming. After several years of tepid and partial efforts by Democrats in which the chief objective seemed to be to hold things together with duct tape and baling wire, the current state leadership is moving aggressively to remove government from the prosperity enhancement business altogether.
For Governor McCrory and the General Assembly, the objectives in this realm have pretty much dwindled down to just two things: a) cut taxes and regulations and b) recruit corporations from elsewhere.
Unfortunately, neither strategy – particularly the new “hands off” approach – has shown much prospect of curing what ails the state’s workforce and economy in any kind of holistic fashion.
A new and comprehensive report from the North Carolina Justice Center – the annual “State of Working North Carolina” report – paints a portrait of this sobering reality in painful detail. It tells the story of a falling median wage, lost manufacturing jobs only partially replaced by lower-paying service industry positions, exploding income inequality and a widening gap between the urban “haves’ and rural “have nots.”
In other words, North Carolina is in the midst of what amounts to a prolonged economic emergency. Its stock of good paying, prosperity-enhancing jobs has been in a free fall for some time and general societal well-being has suffered mightily.
So, what to do about this disastrous situation? How does North Carolina find a way out of the mess?
As even a moment’s reflection would tell the thoughtful observer, a strategy that relies solely upon the “genius” of an unfettered, minimally-taxed market is almost surely a loser. After all, the state has already long been lauded for its “business-friendly” environment – a category in which it ranked near the top in several national journals for many years under Democratic leadership. If a high business-friendliness quotient was all it took, state prosperity would have rebounded years ago.
While no one has a magic, let alone instant, solution, the new “State of Working North Carolina” report gets to the heart of what’s clearly the best hope: building an educated, highly skilled workforce. As the report notes:
“The returns on a robust investment in education are clear: In North Carolina, the median wage for a worker with a bachelor’s degree is $23 an hour, while it is only $13 an hour for a worker with just a high school diploma.”
Common sense confirms the conclusions that naturally follow from these data. After all, how in the world can a state with a shortage of high wage, high-skilled jobs expect to turn that situation around merely by throwing tax breaks and incentives at corporations? Who will those corporations employ?
A recent report by analysts at the national think tank known as the Economic Policy Institute confirms this conclusion. It demonstrates a clear and strong correlation between the educational attainment of a state’s workforce and median wages.
The policy implications of these new studies for North Carolina are not hard to discern. Most notable among them is the fact that recent cuts to education are virtually certain to worsen the state’s prosperity decline.
In other words, states that invest more in their ultimate resource – their people – ultimately attain much higher levels of prosperity. Those that don’t, don’t.
Of course, this shouldn’t surprise us. Indeed, there was a time in America in which such a conclusion would have seemed obvious to both conservatives and progressives. Sadly, however, that era is, for the time being, a distant memory in North Carolina.
Rob Schofield is the Director of Research and Policy Development at N.C. Policy Watch.