The unthinkable, the truly unfathomable, has finally happened. It appears that Raleigh has now passed Charlotte as the jobs engine of North Carolina.
For years, Wake County had been gaining but never got close enough to make us sweat. By 2008, a tough year for us, Mecklenburg still held a 6,000-job lead over Wake County.
According to the May 2009 Employment Security Commission of North Carolina jobs and employment report, Wake County, home to Raleigh, now has an official employment of 409,642. Mecklenburg's is 406,298.
The real bloodletting came in the loss of a nearly incomprehensible 14,500 professional and business services jobs in the Mecklenburg region as Charlotte's banking sector faltered and other related businesses felt the pinch of the recession. That's 10.4 percent of all the business and service jobs in the region.
And that's so far. Most experts, including UNCC finance professor Tony Plath, consider us to be about halfway through the bank-job shedding as Bank of America pares down and Wachovia blends with Wells Fargo.
So far, the media has mostly tiptoed around this story. Last week on Meckdeck.com, blogger and former business writer Jeff Taylor was the first to raise the possibility that Charlotte-Mecklenburg will soon no longer be the jobs engine of the state -- if it hasn't already surrendered that mantle to Wake County.
We're not totally out of the jobs competition with Raleigh yet, of course. Our region is still home to slightly more jobs.
"When you lob in Durham along with Raleigh-Cary, the 741K jobs in that region for May almost matches the 750K in Charlotte-Gastonia-Concord," Taylor wrote. "The metric to watch going forward will be if the (Queen City) actually gets pushed out of first-place in the state in terms of raw jobs. Certainly the Charlotte region's 12 percent unemployment rate already looks weak compared to the Triangle 8.5-ish rate, not to mention the $26 million in unemployment benefits Mecklenburg received in May compared to $20 million in Wake County."
But you can't really appreciate the gravity of the situation until you look at it from a nationwide perspective. According to unemployment data released by the U.S. Bureau of Labor Statistics for the month of May, the Charlotte region now ranks the third highest in unemployment among the 50 metropolitan areas with a population of more than one million. Only the Detroit and the Riverside-San Bernardino area of California had higher unemployment rates. Better than Detroit and California?
But Charlotte is in a different position. The state, which itself ranks fifth in the nation in unemployment, has regularly made the top 10 in the Tax Foundation's highest taxed/least business friendly annual ranking in recent years. With more tax hikes on business likely this year from the legislature, North Carolina will surely move from 39th this year to a permanent position in the top 10. With Mecklenburg County having borrowed itself into oblivion for every project under the sun in recent years, a large local tax hike -- on top of rates that already make us the highest taxed major metro area in the state -- is only a matter of time given the debt sinkhole commissioners have created. The city of Charlotte will likely follow suit with a massive tax wallop with Mayor Pat McCrory out of the way.
Going forward, this county is going to have a heck of a time recruiting new business on the scale we did just a decade ago. Because of this, we will now be far more dependent on the whims of bank CEOs who already have a presence here. They will largely decide whether our job situation recovers in the near future or we struggle on long after the recession ends as they shift jobs out of the area or overseas.
In a recent column, John Hood of the John Locke Foundation speculated on why newly minted governor Beverly Perdue's job approval ratings have hit rock bottom.
"While most Americans slogging their way through the economic downturn are disenchanted with politicians, North Carolinians have experienced one of the biggest reversals of fortune in the country," Hood wrote. "Having been told for years by politicians steeped in the state's Blarney Tradition that they lived in one of the nation's economic pacesetters, North Carolinians are coming to understand that they actually reside in one of the nation's economic basket cases. They feel misled and swindled. They're looking for someone to blame. Perdue is handy."
Perdue's main problem now is that the old solutions will no longer work. Papering over the rest of the state's financial woes by raiding Charlotte taxpayers' pockets and leaving the city high and dry for even the most basic services like criminal justice, highway lighting and roadside litter removal worked in the 1990s when Charlotte was still a banking boomtown. Charlotte is no longer competitive with most of the Southeast for jobs and businesses. Perdue will have to find another way.
Locally, Charlotte needs more than a $500 million streetcar and large new property and sales taxes to pay for toys. We can be a tourist destination after we face and address our jobs market. We need an economic makeover.