Mike Hensen, Senior Program Coordinator at the Center on Globalization, Governance & Competitiveness at Duke University recently sent me a fairly depressing article that examines the Tar Heel State and how its different regions have fared economically over the last few years. The Council on Foreign Affairs published the first Working Paper in its Renewing America series titled After Manufacturing, Lessons for a New Reality from North Carolina.
In the paper, the author Roland Stephen documents the amazing declines in U.S. manufacturing employment, from 1 in 4 U.S. workers in 1979 to 1 in 10 today. Stephen acknowledges the role of outsourcing in this precipitous decline, but also opines that productivity gains played a big role. This “productivity” explanation has recently been called into question.
In the last two decades in North Carolina total employment rose by 23%, even as the state lost half of its manufacturing jobs. To explain this phenomenon, Stephen discusses three regions in North Carolina: Hickory (old style manufacturing areas), Asheville (areas with lots of non-traded service sectors) and Raleigh (areas with internationally traded sectors specializing in technology-intensive goods and highly skilled professional services).
As you might imagine, if you live in Hickory, you are hosed. The region lost tons of furniture and textile manufacturing jobs over the last twenty years. The region has chronic unemployment and slow economic growth. Because you could make a decent living in manufacturing without going to college, education levels are relatively low in Hickory.
Asheville is a mixed bag. It lost a lot of manufacturing jobs, but has replaced a lot of them with service jobs. Asheville has lots of college educated people because many of its service jobs require a college education, but those jobs don’t pay very well.
Raleigh is the happening place. Lots of jobs have been created over the last twenty years. Nonfarm payroll grew by almost 70 percent over that period, including rapid growth in high-income business and professional services sectors. Raleigh’s businesses are world beaters: biotechnology, information technology, and software-related businesses. At the same time lots of jobs in health care, leisure and hospitality have been created. Median income in Raleigh is $60,026, more than $15,000 more than the median income in Asheville and Hickory. Raleigh would be like Hickory and Asheville but for its three major research universities: Duke, UNC Chapel Hill, and North Carolina State. Over 47 percent of the population over the age of twenty-five has a bachelor’s degree, a level that is among the highest in the country. Let’s all live in Raleigh!
Stephen seems to have no hope that the “old jobs” will ever return. “The challenge facing each type of region—in North Carolina and the United States—is to determine which new jobs, and of which quality, will offset the losses of old jobs. Each region scrambles to find new jobs as old industries disappear. But while policymakers may dream of an economy populated by bankers and geeks, these sectors will never employ most people.” Lots of people will be working in Asheville, providing all sorts of services including education and health services. Some of these jobs require quite a bit of education, but hardly any of them are very well paid. Then you have the people working at Starbucks who have a Philosophy degree from Cornell, Smith, or other similarly expensive university. I don’t know which is worse, getting a job that requires you to get a college degree and then pays you poorly, or having to take a poorly paid job after you graduate from college and find that there are no jobs, let alone well-paying ones, in the field you studied.
I encourage you to read the entire study. But to a certain extent I don’t agree with the premise. I believe if you and I make a commitment to buying products made by members of our extended American family, we can bring back a lot of the “old jobs” that were offshored over the last twenty years. Buy furniture made in North Carolina rather than furniture made in China. Buy clothing made in North Carolina rather than clothing made in Vietnam. Most of these studies on the loss of manufacturing employment suggest that we all need to focus on education, and I certainly support an effort to promote public-private partnerships in trade and technical training programs. But if the idea is that we will all go to college and everything will be hunky dory, don’t forget Asheville. Going to college for four or five years and emerging $100 grand in debt to find only low paying service jobs at the end of the rainbow is rather disappointing. Do what you can do to support manufacturing in this country. Buying any of the about a hundred products I have featured over the last six months is a good start. Who knows, if enough of us do it we can create a lot of new “old jobs.”