“Uneven,” “transitional” and “healthy” were all words a panel of Charlotte experts used Monday to describe the local economy.
The contradictory descriptors underscored how rocky the recovery has felt, both state and citywide. Despite recent economic gains in North Carolina, residents are largely reserved about short-term business prospects, according to a slate of business and economic leaders.
“What we’ve got is a tale of two cities,” said John Connaughton, a professor of economics at UNC Charlotte.
In sectors where demand is growing for high-tech, highly skilled jobs, wages get pushed up, Connaughton said. For some fast-growing businesses, such as Charlotte-based CPI Security Systems, the improved labor market conditions mean qualified workers are harder to find.
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But for individuals whose wages are still stagnant, the recovery isn’t yet apparent. In areas that got hit hardest during the recession, such as manufacturing, the supply of labor still outpaces demand, and wages remain flat.
Nineteen percent of North Carolinians expect economic conditions will be better a year from now, compared with 28 percent of people nationwide, according to a Wells Fargo survey conducted this summer.
The statewide results are surprising, given how much North Carolina’s economy has improved since the depths of the recession, said Mark Vitner, a Charlotte-based senior economist at Wells Fargo Securities. About three years ago, North Carolina had the highest unemployment rate in the South.
Vitner said since the official start of the recession in December 2007, there has been a net of 2.3 million new jobs added in the U.S., though only about 100,000 of those are full-time positions.
“That’s where a lot of the angst is,” he said. The panel was hosted by USA Today and Wells Fargo at the Mint Museum Uptown.
Despite the history of manufacturing, especially textiles, in North Carolina, 71 percent of people describe manufacturing in the state as “struggling,” according to the Wells survey.
Kati Hynes, vice president of economic development at the Charlotte Chamber, said local manufacturing is transitioning from lower tech to higher tech.
And the mismatch of skills required for new manufacturing jobs is one of the ways workers feel the pangs of the transition.
“A lot of the jobs that we lost in manufacturing required one set of skills, and a lot of the jobs we gained from new industry and expansion of existing industry require a whole other set of skills,” Wells’ Vitner said.
The Carolinas were a hotbed for the American textile industry until the 1990s, when foreign competitors penetrated the market with cheaper materials and labor. Local textile mills – often in smaller towns – over the years have shuttered, laying off thousands of workers. A recent example is the closure earlier this year of Mohican Mills in Lincolnton, where 150 people lost their jobs.
For CPI Security Systems, which just broke ground on a 120,000-square-foot building off Interstate 485, the health of the state’s economy is evident in the difficulty in its recruiting efforts.
Eric Schachner, the company’s chief financial officer, said a couple of years ago, CPI would get 100 applications or so for 10 to 15 positions. Today at a job fair, the company “would be lucky to get 15 to 20 applicants come through.”
“From our perspective, we’re having to be more creative in how we attract and retain employees,” Schachner said, adding that all of the jobs being added are full-time positions.
To lure qualified applicants, companies often have to increase wages, economists say. Over the last year, average hourly earnings rose 2.2 percent, just a bit faster than the cost of living nationwide, according to the latest national employment report.
The panelists all said Charlotte officials should do everything possible to make the city a hospitable place for businesses to want to stay, including supporting the airport, funding infrastructure development and encouraging schools to teach students about jobs in manufacturing.
“We’re building new office towers, we’re expanding hotel rooms, we’re building new apartments … all of that becomes the infrastructure to bring more people and more communities to our community,” said Michael Smith, president and chief executive officer at Charlotte Center City Partners.
Smith lauded local education institutionssuch as Central Piedmont Community College, which has partnered with Siemens to develop an apprenticeship program in Charlotte that transitions students directly into middle-class jobs.