North Carolina Cooperative Extension

You Decide: Will North Carolina jobs jump in 2013?

By Mike Walden | Jan 05, 2013

North Carolina received a nice Christmas present right before people
gathered with friends and family for the holiday season. More than
30,000 jobs were added to the state’s employment rolls in November,
and the unemployment rate slide from 9.3 percent to 9.1 percent. Of
course, there is usually extra hiring during the holiday season, but
these numbers adjust for that typical seasonal trend.

The November job numbers are also significant in another way. North
Carolina’s growth in jobs since the bottom of the recession (February
2010) now exceeds the comparable growth rate in jobs at the national

Specifically, from February 2010 to November 2012, North Carolina
added jobs at a 3.8 percent rate, compared to 3.6 percent for the
nation. Also, both North Carolina’s and the nation’s unemployment
rates have now dropped 2.3 percentage points from their peak.

Of course, the state is by no means out of the woods from the job
losses suffered during the recession. Manufacturing always gets hit
harder during economic downturns due the ability of buyers to postpone
purchases of durable products. In the 2007-2009 recession,
manufacturing fell twice as fast as the overall economy.

And because North Carolina has a much bigger chunk of its economy in
manufacturing -- twice as much as the nation in terms of sales value
-- recessions always hit our state harder. The state lost 8 percent of
its job base during the recession, compared to 6 percent for the

Yet the fact that our state’s job growth in the last three years has
now exceeded the nation’s pace is encouraging. The question is: Will
it continue?

Several reasons point to a yes answer. First is history.
Traditionally, North Carolina loses more during recessions but gains
more when the economy resumes growing. Consider the recession of the
early 2000s. From 2001 to 2003, North Carolina lost 4 percent of her
jobs, while the nation lost 2 percent. But in the economic recovery of
2003 to 2008, our state added jobs at almost twice the rate as the
country (12 percent versus 7 percent).

Of course, history may not be repeated. But there are other reasons to
be optimistic about jobs in our state. Compared to the country, North
Carolina’s workers are more affordable and more productive. That is,
pay is lower, but productivity is higher. Businesses like this
situation. So when firms are looking for places to locate in the
country, they know they’ll get a good deal and a good day’s work in
North Carolina.

However, won’t new jobs just go to foreign countries? Not necessarily,
at least not anymore. For example, worker wages in China have
increased five-fold since 2000, while changing very little in the U.S.
Indeed, a just-released study shows worker wages in the U.S. rising
the slowest last year among 15 major industrialized countries.

Other factors are helping the competitive position of both the U.S.
and North Carolina. Higher oil prices are making it more costly to
transport finished goods from overseas factories. At the same time,
lower domestic natural gas prices are reducing energy costs to U.S.

Finally, some U.S. companies producing in foreign countries have had
trouble with property rights, a fancy term meaning the protection of
confidential plans and procedures.

North Carolina can also market itself as a “right to work” state,
which makes it more difficult for unions to organize workers. While
this is certainly a controversial topic -- the pros and cons of unions
can be debated -- many companies prefer to do business in states that
give them more control over worker costs and rules.

It also is a plus that our state is located in the fast-growing
southeast, because locating in North Carolina puts a business in
proximity to expanding population markets. North Carolina also has
highly rated and relatively (compared to other states) inexpensive
community college and public university systems. So businesses know
workers in North Carolina have access to top flight education and
training programs.

Still, despite these advantages, North Carolina faces important job
challenges. Most economic forecasters predict the unemployment rate
will continue to decline -- but slowly -- taking several years to
reach 6 percent. Many of the long-term unemployed do not have the
correct set of skills for today’s jobs. Income growth will likely
continue to be uneven. Those with college degrees will see their
incomes advance faster than those without degrees.

So the job clouds are finally parting, leaving some sunshine to peak
through. But we’re far from a sunny jobs sky. You decide what,
individually and collectively, we can do to brighten every job
hunter’s day!

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Dr. Mike Walden is a William Neal Reynolds Professor and North
Carolina Cooperative Extension economist in the Department of
Agricultural and Resource Economics of N.C. State University’s College
of Agriculture and Life Sciences.