by Mitch Kokai
Senior Political Analyst, John Locke Foundation
In addition to news that the latest edition of the Fortune 500 has added two North Carolina companies — Durham-based Quintiles and Greensboro-based Lorillard — an article about geographic shifts among the 500 top American companies highlights the Tar Heel State.
Overall, nine states — California, Texas, Minnesota, North Carolina, Tennessee, Washington, Arkansas, Wisconsin, and Nebraska — have truly shined since 1995. Seven others — New York (despite tying California for the most number of companies in the 500), New Jersey, Connecticut, Pennsylvania, Ohio, Illinois, and Michigan — have disappointed. The collective market capitalization of companies in the nine leading states has grown an average 12% a year since 1995, close to doubling the gain (6.6%) for those based in the laggards.
Over the past two decades the nine winning states have gained 40 company headquarters, while the seven strugglers have shed 42. Companies in the lucky nine now account for 44% of the 500’s total revenue, up from 26% two decades ago. For the not-so-lucky seven, it has been a rough reversal of fortune: a drop from 55% of total sales to 37%.
And, finally, jobs: The hot nine have added 5.5 million jobs in 20 years and now account for 40% of all employment, up from 26% in 1995. By contrast, the embattled, smokestack-heavy seven have dropped 645,000 employees, and their share of the 500 workforce has shrunk from well over half the total to 38%.
One suspects that growth-friendly policies adopted in recent years in North Carolina could help the good news continue.