Wednesday, March 07, 2007

Diminishing Economic Prospects for Rural North Carolina

The numbers are in and the story they tell isn't pretty for the hundreds of thousands of men and women who have traditionally served as the backbone for North Carolina's workforce.

According to a recent assessment from the North Carolina Commission on Workforce Development the demand for "middle" jobs, those jobs that provide a family-sustaining wage without rquiring a formal education, has seen a serious reduction and job growth is concentrated in urban areas. The "State of the North Carolina Workforce" report does not assign blame, but does confirm what many of us already knew. It isn't a pretty picture for rural workers and the future isn't looking much brighter.

There are eight key trends that are outlined in the executive summary of the report. Over the next couple of weeks I will go through this report in detail. Today, I would simply like to highlight the key trends.
• Many of North Carolina’s traditional manufacturing industries continue to shed jobs as part of an on-going economic transition.
"On-going economic transition" sounds benign but refers to the outsourcing of America's jobs to cheaper foreign labor sources. The culprits are the numerous free trade agreements pushed by Bush and passed by the Republican Congress over the past several years. These free trade agreements have also been supported by many Democrats.

The election in November 2006 may have brought a new balance of power to this issue, but is it too late to undo the damage these free trade agreements have already caused to rural areas of North Carolina? What corrective action should be taken by national, state and local governments as well as chambers of commerce and local business leaders? Do we repeal free trade agreements or do we curtail passing future trade agreements until the damage is assessed and corrective action is taken?
• North Carolina’s traditional “middle jobs”—those that paid a family-sustaining wage and required minimal formal education or training—are disappearing as part of this transition.
Here is further proof, in black and white that there is a war on middle income earners. The current increases in minimum wage will not solve the problems caused by the loss of middle wage jobs. There is a big difference between a minimum wage and a living wage. Most official definitions of "living wage" I find put it at 120% to 130% of the federal poverty line for a family of four. With the poverty line around $19,000/year in North Carolina, that puts the living wage around $25,000 for a family of four. Just how far does a family of four go on $25,000/year? Will this pay medical bills, dental, vision, food, clothing, housing, savings or provide for a college education for the kids? How do we make sure our economic growth brings along as many minimum and living wage workers as possible?
• New job creation is concentrating in certain fast-growing metropolitan areas.
For those of us who live in these metropolitan areas this might seem like good news, but the growth in population that follows the growth in the job market is providing its own challenges in areas like transportation, housing and education. Of course, these issues are preferable to the alternative reality that many of our rural communities are facing.
• Many areas of North Carolina are not prospering from the economic transformation.
In the past election we heard quite a bit about some of the rural communities included in NC's 8th Congressional District. Some of these areas lose so much of their tax base after a major mill closing that it isn't just the workers but the town itself that suffers. What can we do in the immediate future to help these areas prepare to attract new business?
• The future prosperity of all North Carolinians depends on achieving higher educational attainment levels for all citizens.
The new jobs coming to North Carolina require a better educated workforce. While the education level attained for the average North Carolinian has increased over the past 15 years, we still trail the nation. This will have to change for North Carolina to continue to attract high-tech businesses and for these businesses to hire workers currently living in the state. How will our financially stressed rural workforce and those living at or below the poverty level afford to send their children to college so they can participate in the economic growth of North Carolina?
• Impending baby-boom retirements will exacerbate an emerging skills gap among experienced, skilled workers.
This tells us which age group a large concentration of our highly skilled workers is in. Will we have the workforce needed to sustain current and future economic growth in 10, 15, 20 years? How do we plan for this?
• High-skill in-migrants will help fill part, but not all, of this skills gap.
Currently, the United States is not very selective about the people allowed to migrate to the United States however highly skilled migrants account for a fairly high percentage of successful businesses. According to a study at Duke (via Contacto Magazine):
"Immigrant entrepreneurs founded 25.3 percent of the U.S. engineering and technology companies established in the past decade...... What's more, foreign nationals -- those living in the United States who are not citizens -- contributed to an estimated 24.2 percent of international patent applications in 2006."
What does this mean for the immigration process? Do we fast-track those with certain skills or advanced degrees? Do we worry about whether that's fair to the huddling masses?
• Low-skill in-migrants present both opportunities and challenges in meeting the state’s workforce needs.
If the middle income jobs are a thing of the past, will there be greater competition for the lower income jobs if we allow the current level of unskilled migrant workers to continue? What other stresses does that put on our economy? Does the good outweigh the bad? I'm not talking about what is humane or fair to those in our country illegally. What is the economic impact? What does it mean for the future economy of North Carolina? Can we meet the needs of our legal citizens if the current level of those here illegally remains constant or increases?

Obviously, I don't have all the answers, but I hope to interview the men and women who do. I have put together interview questions that I will email to as many elected officials and prospective elected officials as I can. I have already contacted a few and they seem eager to join in the conversation. I have been researching each of these trends and will address each in detail. Look for the first installment on free trade early next week.


Post a Comment

Subscribe to Post Comments [Atom]

<< Home