Welcome to North Carolina, home to beautiful coastline, rolling mountains, great people, dying industries, two sources of the financial crisis, and the 10th highest unemployment rate as of March of 2010. North Carolina is a mixed bag of strong growth 21st century industries that’s being held back by the industries of the 20th century.
North Carolina was once a thriving economy backed by manufacturing and agriculture. The farms around the state do well with animals (cattle, poultry, eggs, milk, hogs, and even turkey), but they also do sweet potatoes, soybeans, and the big gun tobacco. They are the biggest grower of tobacco which goes on to support companies like Reynolds American based in NC, which is the second largest tobacco company in the US behind Altria in nearby in Virginia. It’s likely tobacco growers in North Carolina support both of these companies.
North Carolina also had a healthy manufacturing sector. Among the likes of paper, chemicals, furniture, and some electronics, textiles were once a really big contributor to the economy. Though North Carolina remains the textile leader in the US, they’ve lost many jobs to Asia and South America. When you lose lots of manufacturing jobs, the economy is slow to adjust because many of these people were paid good wages and are forced to work for less to keep the lights on. This leads to persistent high unemployment.
But don’t count this state out. They’ve been diversifying their economy for years, and it’s kept them from becoming like Michigan (sorry Michigan). Behind New-York City, Charlotte is the largest financial hub in the country. Bank of America calls Charlotte home (for now) and Wachovia’s headquarters were also there. As you probably know, Wachovia sold themselves to Wells Fargo to avoid a bank failure but many operations remain in town and it serves as the east coast hub for the San-Francisco based bank. Elsewhere in the state BB&T resides which has a very large footprint in the Southeast and is a top 10 or 20 bank depending an how you measure size and define “bank”.
The giant scar of finance isn’t all North Carolina has left though. The area around the capital, Raleigh, is an IT and biotech cluster known as Research Triangle Park (RTP). IBM, GlaxoSmithKline, Microsoft, and SAS all have operations there as well as dozens more. RTP has insprired other metro areas in the state to start their own research areas, and as a result North Carolina is becoming a high demand state for the technologies of tomorrow.
Helping along this development is a university system rivaled by few. The University of North Carolina and Duke University are nationally recognized in sciences and business, and a number of other schools are nationally or regionally important such as Wake Forest University and North Carolina State University. UNC, Duke, and NCSU all play very large roles in the success of RTP.
Finally, there exists an entertainment industry where are few shows and movies have been made around the state. Talladega Nights, The Color Purple, and Hannibal were filmed in NC, as well as a number of television shows and other movies. And where there are movies, you also have the arts. Frankly, I don’t know much about this stuff and don’t know how much it contributes to the economy, but the state pimps it because it gets people like me to talk about it.
One problem with the setup of this economy, as with many economies, is that the urban areas tend to do much better than the rural ones. North Carolina has some rural areas and some urban ones. They’ve got some tourism with wineries, beaches, and mountains. The diverse state is making the transition to the 21st century better than others in the south, but the loss of manufacturing jobs is a generational issue, and will continue to contribute to high unemployment for some time to come.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
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