Editorials

How’s the NC economy? Not as good as Republicans say

Senate President Pro Tempore Phil Berger
Senate President Pro Tempore Phil Berger The News & Observer

After eight years, Republican dominance of the General Assembly is getting a little long in the tooth. One sign of that is the fraying of the Republicans’ central conceit — that the economy soared after they cut taxes and held down state spending.

Senate leader Phil Berger repeated that claim in his response to Gov. Roy Cooper’s recent state of the state address. He said, “The facts show what you and your neighbors already know to be true: The financial and economic state of our state is the strongest it has ever been. North Carolina is booming under responsible Republican leadership.”

North Carolina Governor Roy Cooper delivers his State of the State address to a joint session of the General Assembly, Monday night, Feb. 25, 2019 in Raleigh.

Actually, what you and your neighbors know is that claim isn’t true. Since the Republicans passed a regressive 2013 tax cut package that disproportionally benefited the wealthy and large corporations, household incomes haven’t so much risen as they have recovered from the severe recession that hit from late 2007 to mid-2009.

It’s true that jobs have been added and new businesses have come in, but mostly the new jobs have kept pace with the state’s growth in the population, and many of the jobs are low-paying service jobs. The unemployment rate has dropped sharply here and around the nation since the height of the recession, but that hasn’t translated into higher wages.

John Quinterno studies the state labor market at South by North Strategies, a Chapel Hill research consultancy specializing in economic and social policy. He said, “The economic recovery continues to deliver few meaningful improvements in the living standards of the typical household in North Carolina.”

Quinterno’s review of Census data on household income from 2007 to 2017, the latest numbers available, found “no statistical difference” between the inflation-adjusted median income of a North Carolina household in 2007 and the median income ten years later. In 2007, it was $52,430. In 2017, it was $52,750.

That is the reality of what former Gov. Pat McCrory touted as the “Carolina Comeback.” We’ve come back to where we were before the recession. That’s good, but it happened everywhere, even in high tax states. And the North Carolina economy is hardly what Berger called “the strongest it has ever been.” It’s just back to where it was when those big-spending, high-taxing Democrats were in charge, except now state government has lost $3.6 billion a year in revenue because of tax cuts.

The loss of that money has kept state funding at an austerity level reflective of a recession rather than a recovery. And that austerity — imposed by choice rather than necessity — is undermining North Carolina. A study by Ohio University released in February ranked state economies by how they performed over the past 10 years. The study’s measuring stick was a “economic distress score,” a number determined by a state’s unemployment rate, per capita market income and poverty rate compared to national averages. The higher the score, the worse the distress. North Carolina came in 40th in the nation with a score of 112.1, much worse than the national average of 100. That’s worse than in 2009, when North Carolina ranked 35th with a score of 104.6.

Berger can say what he wants, but most North Carolinians know which way their household income is going. For most, it’s close to where it was before the recession. Meanwhile, the state as a whole is getting poorer for lack of needed investment in public education, health and caring for the needy. After eight years of Republican rule, that’s the true state of the state.

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