NC Sees Income Gains
Publisher's note: This article appeared on John Hood's daily column in the Carolina Journal, which, because of Author / Publisher Hood, is linked to the John Locke Foundation.
Over the 12-month period ending in August (the most recent federal data available at this writing), employment in North Carolina rose by 2.6 percent. That's the 10th-highest rate of job growth in the United States, and about 25 percent faster than both the national and regional averages. In the Southeast, only Florida (#3 in the nation) and South Carolina (7th) are adding jobs at a higher rate.
Now look at incomes. Although North Carolina has compared favorably in job creation for a while now, the same can't be said for personal income growth. In 2013, when our state ranked poorly on this measure, Democratic and liberal critics of Gov. Pat McCrory and the Republican-led General Assembly pounced. The media, in turn, played up the story - a reasonable decision, I might add, as income growth is obviously a worthy topic for news coverage.
But what happened a couple of weeks ago when the Bureau of Economic Analysis released its latest estimates of personal income, through the 2nd quarter of 2015? Once again using the most recent 12-month period available, North Carolina once again ranked 10th in the nation, measured either in total personal income growth (4.7 percent in our state) or growth in personal income per person (3.7 percent). Personal incomes in North Carolina are growing between 12 percent and 15 percent faster than the national and regional averages, depending on the measures used.
Just six states currently make the top-10 lists for both job growth and per-capita income growth. North Carolina is one of them - the only Southern state to do so.
But is per-capita income the right measure? Some commentators insist that median household income is better. There are technical arguments for each one, but in this case it doesn't matter. For 2014, the most recent period available, North Carolina's median household income also grew faster than the national and regional averages. (For the record, I still think per-capita income is the superior measure when tracking long-term trends. The ratio of population to household formation isn't stable, for example.)
To say that our state is one of the nation's economic pacesetters is hardly to say that we lack economic challenges. Remember that the United States as a whole has struggled to climb back from the hole dug by the Great Recession. The economic recovery is weak by historical standards. For North Carolina policymakers, the real question is how best to maximize growth and opportunity within the constraints imposed by federal policies, regional trends, and international economic forces.
State lawmakers and the McCrory administration have been repeatedly excoriated for making the "wrong choices," for placing too high a priority on lowering tax and regulatory burdens and too low a priority on government spending to boost state economic growth. You can be sure that if North Carolina were lagging behind the national average in job creation and income growth at the moment, the critics would be making lots of noise about this - and that noise would translate into copious media average.
I am quite familiar with the old adages: "bad news is good news" (media audiences are very interested in plane crashes) and "good news is bad news" (audiences tend not to notice safe landings). But these are tendencies against which journalists should lean, not ironclad rules of editorial judgment.
Although the trends are promising, we all know there is a long way to go if our destination is a North Carolina economy of full employment, sustained growth in wages and incomes, and broader opportunities for all. Policymakers still have many complicated issues to address and tough decisions to make.
That debate must begin, however, by stipulating to demonstrable facts. One of them is that North Carolina is doing comparatively well in job creation and income growth right now. Good news, unless you're rooting for failure.