A left-of-center advocacy group releases a report today designed to address the “state of working North Carolina” in 2016. The subtitle of the N.C. Justice Center’s report makes clear that it aims to challenge Republican Gov. Pat McCrory’s campaign touting an economic “Carolina Comeback.”
It’s not surprising that this misdiagnosis of North Carolina’s economy would lead to misguided recommendations for a “cure.” Whether you accept the terminology of a Carolina Comeback, most relevant data since 2013 show North Carolina’s economic growth outperforming the region and the nation as a whole.
Since mid-2013, when Gov. Pat McCrory’s first budgets and other policy priorities were enacted, North Carolina’s gross domestic product has expanded by an average annual increase of 2.7 percent, after adjusting for state-by-state price changes. That’s one of the fastest rates of real GDP growth in the country. After-tax, per-person incomes have gone up about 10 percent faster than the national and regional averages. In each of the last 10 full quarters of data, income growth, GDP growth, or both have exceeded the national average.
North Carolina employers have added nearly 265,000 net new jobs, and the broadest measure of unemployment — factoring in discouraged workers and involuntary part-timers — has dropped by 4.6 percentage points. That performance also has exceeded national and regional averages.
Through careful manipulation of purposefully misleading statements, this report attempts to hide the real story. Yes, North Carolina’s economic recovery has been slower than normal — because the U.S. economic recovery has been slower than normal. North Carolina’s improvement has been among the strongest in the country, even as this state and every one of its counterparts continue to struggle with sluggish growth tied in no small part to bad economic policies adopted at the federal level.
One of the most disappointing aspects of this report is its willful ignorance of the evidence. A 2014 examination of more than 680 peer-reviewed academic journal articles published over a 25-year period showed that a certain set of state and local government policies was most likely to foster the kind of economic growth necessary to help boost all North Carolina families. Those policies include keeping overall tax and regulatory burdens as low as possible, investing effectively in public safety and the courts, and increasing productivity of spending on infrastructure and education. These research-based ideas track closely with policies North Carolina’s elected leaders have pursued over the past few years.
Yes, North Carolina needs a stronger economy. It’s not likely to see one by getting rid of recent policy changes — tax and regulatory relief, government spending predictability and restraint, increased emphasis on economic freedom and choice — that have helped this state stand out from the crowd.
