PITTSBORO – States’ economies are not insulated from regional and national trends. Rather they are affected, to varying degrees, by the push and pull of regional commerce, innovation centers, local business sentiment, and national tax policies. However, being that the States represent 50 different experiments in political economy – taxes, regulations, incentives, and cultural idiosyncrasies.
That’s why the tax and regulatory reforms Republican legislative majorities embarked on nearly a decade ago in North Carolina cannot be specifically credited with economic performance, but certainly given attribution for contribution. The Old North State has been performing well over those years, taxing people less and regulating businesses less, leading to steady growth, bulging tax revenues, and healthier balance sheets. All of that was done under a Democratic president that asserted, “You didn’t build that!” and a congress that was typically bad at bold government-reducing reforms.
Now we have a mold-breaking Republican president slashing regulations, and a (still typical) congress that has managed to pass a tax reduction act on a federal level. The result could be the best job growth in North Carolina in the last quarter century according to N.C. State economist Dr. Michael Walden.
At a Chatham County Chamber of Commerce event last week, Dr. Walden said, “if we continue the pace of job growth for the rest of the year that we had in the first half of the year in North Carolina, we’re going to have the fastest job growth in our state than we’ve had in 25 years.”
Now, Democratic Gov. Roy Cooper will definitely use such comments to boast about his leadership over the last two years. We all know how much to believe that. Instead, the foundation policies implemented by the N.C. General Assembly since 2010 and, more recently, the shot in the arm the national economy has received from the Trump agenda are animating this surge.
“I just have to say, the economy has been on a very great roll. If we look at national numbers, you’ve heard this number banded around four percent GDP growth. That’s very good. Looks like it might be faster in the third quarter. We have unemployment rates that are record lows for many segments of the population. Business optimism is high, consumer optimism is high.
I read recently that the job market is getting so tight that many employers are actually lowering their standards and hiring, for example, people they would have never looked at in years past because they just need people there and they’re willing to train them. I think that’s an excellent, excellent sign.
Just to fall into the statistic, in the last year, the unemployment rate along high school dropouts has fallen 10 times faster than the unemployment rate among college graduates. So we are in a booming economy. Now, there are issues out there. I think everyone is aware and certainly farmers in North Carolina are aware of the trade disputes.”
The trade disputes are bound to factor into economics, here and around the country, but most of those effects are yet to materialize. (Although anecdotal stories of negative economic effects of tariffs and trade spats are numerous)
So what about North Carolina specifically?
“One of the things I’ve noticed is if we continue the pace of job growth for the rest of the year that we had in the first half of the year in North Carolina, we’re going to have the fastest job growth in our state than we’ve had in 25 years. And very importantly, you hear this term, “The Economic Divide.” The rural/urban economic divide. In the first six months of this year, the second fastest job growth rate in the state was in rural counties.
Fastest was actually in this area, the Durham/Chapel Hill Metro area. Charlotte actually can 2/3 of the way down, it was 2/3 of the way down the list. And we’re also beginning to see middle income jobs, particularly in manufacturing, construction, transportation, come back. So a lot of good things happen when the economy is growing and we’re seeing those in North Carolina.
And then, lastly, the focus right here, Chatham County, the greater triangle region, and what can you say? When I talked to people that I associate with around the country, usually academics, but some in the business world, they just marvel at this region.”
You might remember that when candidate Donald Trump held political rallies in North Carolina – and he did quite a few here in our swing state – the campaign chose to visit rural areas far more than previous candidates, and certainly more than Hillary Clinton.
Now those rural areas are seeing economic benefits and, despite talks of a Blue Wave, we think it will be a powerful confirmation for Trump voters of all stripes come election day. Republicans in congress, and in the state legislature, will benefit from this.
The contrast the Democrats here and around the country offer would easily represent a departure from a positive economic trajectory. More taxes, more regulations, more demonizing identity politics, (even) higher spending on Big Government programs – do you think the economy continues apace if that becomes the new political direction? Us, either.
Read more of Dr. Walden’s comments here.