Healthy state, worried workers: North Carolina in the world economy



NOuSeCON6MKAS Dezembro '07 / (44/53)


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Despite the wave of garment-factory closures, the state is putting its people to work and
developing new and more sophisticated industries to replace the old. The most recent reports
from the Bureau of Labor Statistics find North Carolina’s unemployment rate at 5.0 percent, only
slightly above the national average and below South Carolina’s rate. This figure is also noticeably
below the 6 to 8 percent unemployment rates typical of North Carolina in the 1970s, when textile
employment peaked.

Part of the reason for this is the change in the North Carolina economy. The decline of
light-industry employment, as in New England a century ago, has been offset by a rise in newer
industries. The most successful example is the Research Triangle, an industrial park based on a
combination of state and business support for research-based universities at Chapel Hill and
Duke. The Triangle has allowed the north-central part of the state to develop a network of
high-tech, medical and educational industries that support high-wage, high-skilled employment
that (on the whole) has left North Carolina more affluent than it was in the past. The state’s
governor, Mike Easley, takes justified pride in its development:

“New names have arrived, like General Dynamics, Verizon and Dell. Longtime North Carolina
companies are expanding like GE, Merck and Lowe’s. And we will soon have the only statewide
biomanufacturing job-training network in the world. North Carolina is now poised to become the
world leader in biomanufacturing, with new jobs not just in the Triangle but throughout the entire
state7”.

This evolution is underway (though it is too early to make a long-term judgment) in Kannapolis
itself. The town’s unemployment rate jumped from 7.5% in May 2003 to 12.1% in August 2003,
and remained around 10% for well over a year. This was nearly twice the national average. But
four years later, the rate is now back down to 5.8%, and total employment is at 19,200, above the
18,700 figure for May 2003.

Over the longer term, the town is attempting to create a new long-term center and a new identity.
Its plan is only in the initial stages, but so far seems very promising. Together with the state
university system and one of the earlier owners of the Cannon Mills, it is building a complex
known as the North Carolina Research Center - the heart of the bio-manufacturing Governor
Easley cites - whose hope is to copy the Raleigh-Durham area’s development of the Research
Triangle in the 1980s and 1990s.

The main effort is a new research complex, known as the North Carolina Research Center, built
over the old towel and bedsheet mill site. The old mill featured in the movie was blown up this
spring, and the town is now installing high-powered generators, a gigantic magnetic resonance
imager purchased in Germany, and other sophisticated equipment. The construction bill will be
$700 million, with $25 million in annual operating expenses, paid for in part by the state
government and in part by a former owner of the Cannon Mills who remains closely tied to the
town.

Such efforts of course do not always succeed, but are not simply quixotic tilts at windmills. A
parallel effort might be that of Bethlehem, Pennsylvania, once home to the gigantic Bethlehem
steel mill. This mill closed in 1995, eight years before the Cannon Mills complex, and the town
has bounced back remarkably. The steel mills now house a series of materials technology,
chemicals and other small research and scientific firms in the old mill complex.

2. And the Workers?

What about the individual? Here we have to say that the picture seems darker, and that the
policies we have created to ease transition are at best partially successful.

7 2005 State of the State address, North Carolina Governor Mike Easley, at
http://www.dlc.org/ndol_ci.cfm?kaid=106&subid=122&contentid=253186



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