The Charlotte Observer finally dives into the implications of the Bank of America situation. As is to be expected, their take is far sunnier than that of the Associated Press.
Here is an interesting point. Even if Bank of America somehow emerges largely unscathed from its mortgage debacle, and even if it keeps its current job footprint in Charlotte, the city’s reign of headline grabbing growth is likely over …
The drama illustrates the shifting fortunes of one of Charlotte’s most important companies. A few years ago during the boom, bank jobs were plentiful and salaries soared, drawing legions of workers to the area from across the country.
High-end shops and restaurants followed. Condo towers rose uptown, and sprawling homes sprung up in the suburbs.
Financial services jobs helped drive much of the growth: The sector accounted for more than one-fifth of Mecklenburg’s private-sector wages in 2007, paying out $5.6 billion – more than seven times the 1990 amount.
This is something that hasn’t really been contemplated locally. The permanent end of Charlotte’s period of off-the-charts growth, especially population growth. It was Charlotte’s other national claim to fame, after the banking center thing. Nationally significant numbers of people flocking to Charlotte was a huge part of its image and its momentum over the last two decades. It drove the city’s rising New South image and all that.
Charlotte may be able to continue to post respectable population growth numbers for a few more years. Here is why. The large amount of the population growth here over the last decade has been deceptive. While tens of thousands of educated, wing-tipped types moved to the region to take bank and financial services sector jobs, a much larger tidal wave of impoverished people also moved here, looking to escape even worse conditions elsewhere, a trend that was largely ignored locally.
A study of census data by the Brookings Institute showed that the Charlotte region had the second highest growth in poverty in the nation since 2000, with a jump from 123,000 impoverished people to 233,000 in just a decade. That same study ranked Charlotte first in the nation in the increase in poor children living here, from 40,000 at the beginning of the decade to 87,000 now.
Some of that was no doubt those on the economic margins slipping into poverty due to the economic situation. But much of it was impoverished people moving here looking for a way out of something worse.
Will the ongoing Great Recession slow down this influx? Or will impoverished people from the nation’s rust belt cities continue to flee even worse conditions there for Charlotte?
It’s anyone’s guess. But in the wing-tipped days just a few years ago when the financial sector here grew by billions a decade and the tax base grew by double digits, we could afford to support the nation’s second highest rate of poverty growth with minimal outward signs of economic strain.
Not anymore. And that’s what most of the local political squabbles will be about in the coming decade — how much of an assault the tax base can take without turning Charlotte into, as someone once called it, Detroit on the Catawba.
Mayor Anthony Foxx was already quoted last year in the Observer explaining that the county tax increase would come this year (check) and that the city tax increase would come next year. How many more can the county take with the financial sector teetering on the edge?
