Sunday, September 18, 2011

North Carolina Is Dying

The vitality of the Research Triangle area is deceiving. Much of North Carolina is more Rust Belt than Sun Belt. One or two booming metros can make an entire state look strong. The looming fiscal crisis:

Only 17 N.C. counties, coded light gray and white in the map, had low-to-moderate dependency ratios (i.e., 40 to 69 dependents per 100 employer workers) in 2010. Between 2000 and 2010, these counties were the state's primary population growth magnets. Also, because a higher percentage of the employed work force was well educated, they were better off financially and therefore better able to provide essential services to their youth and seniors than the black- and dark gray-coded counties.

But even these counties are at a grave risk of fiscal calamity. Their future economic viability is at risk because the well-educated have not fared very well in the current economic downturn.

Both long-term joblessness, defined as being unemployed for six months or longer, and poverty have increased sharply among those with some college, a bachelor's degree or higher since the onset of the great recession in 2007. Moreover, although they are net importers of population, out-migrants had higher per-capita incomes than in-migrants to several of these counties (e.g., Wake and Mecklenburg) between 2004 and 2008, according to IRS migration statistics.

Even in the demographically exceptional counties, the future looks bleak. Rust Belt states have a much longer history of dealing with such problems. The world is upside down. Greenfields are turning brown. Brownfields are the new greenfields.

Domestic migration has been slowing for decades. Growing states have added infrastructure and the like to keep up. The legacy costs are mounting. That's fine as long as the people keep coming. Texas can breathe easy. The rest of the Sun Belt is looking at prolonged fiscal distress.

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