by John Hood

North Carolina’s economy, battered by COVID-19 itself as well as government’s costly attempts to contain its spread, is still struggling to recover. There were about 350,000 fewer jobs in August than in February. That’s a 7.6% decline in total employment — the worst in the Southeast.

In the past, anyone discussing state economic trends might assert a clear differentiation between North Carolina’s faster-growing urban counties and our slower-growing rural counties. The story was always more complex than such a simple dichotomy, actually. But what’s striking is that at the moment, our largest cities are faring worse, not better, than the statewide average.

The Charlotte metro, for example, is down more than 100,000 jobs since February, according to preliminary data from the U.S. Bureau of Labor Statistics, a decline of 8.6%. Employment is down a net 69,000 jobs in the Raleigh metro (-10.4%), 33,000 in Greensboro (-9.1%), 28,000 in Durham-Chapel Hill (-8.6%), 22,000 in Winston-Salem (-8.2%), 20,000 in Asheville (10.3%), 17,000 in Hickory-Morganton-Lenoir (-10.6%), 13,000 in Wilmington (-9.8%) and 11,000 in Fayetteville (-8.7%).

One reason our metros are home to a disproportionate share of North Carolina’s lost jobs is that they came into the COVID crisis with a disproportionate share of the industries placed most at risk by the virus and by the government lockdowns that followed it. Think restaurants, hotels, recreation and leisure, cultural and entertainment venues, and the firms that manage and maintain high-rises and office parks.

But the COVID crisis, as painful as it has been, is not the only causal factor at work. We cannot overlook the effects of the urban protests that began after the death of George Floyd, devolved all too quickly into destructive riots, and then got repeat performances in several communities during the summer months.

When rioters broke windows, defaced walls, destroyed property, and provoked violent confrontations with the police, the out-of-pocket costs to business owners and taxpayers were significant. They form only a small part of the full economic cost, however.

Talk to business owners in many North Carolina downtowns. They will tell you heart-rending stories of missed opportunities and shattered dreams. Even as customers return to businesses elsewhere in the region and state, too few are returning to downtown stores and restaurants. Many will never recover.

Some of these losses would have happened without the riots, of course. With theaters, performance spaces, bars, clubs, and other components of urban nightlife still shuttered by Gov. Roy Cooper, the magnets that normally attract people downtown lost their pull. But failing to protect central business districts from defacement, from disorder, and in some cases from outright assault by violent revolutionaries — however pathetic their fantasies of “revolution” may be — has only made the situation worse.

So, what can policymakers do to help our urban areas recover their economic momentum? This is a question all North Carolinians should be asking, even if they live far away from major cities. The jobs not created in our metro areas are probably not going to be redistributed to rural counties. The jobs will flee to metros in other states or countries.

For starters, reestablish public order and protect private property rights. These are core functions of government. Without them, individuals are less free and economic opportunities less plentiful. Those who wish to use public rights-of-way to stage political protests have every right to do so, as long as they secure permits and follow the rules. Those rules should include zero tolerance for attacks on property or law enforcement and, for the foreseeable future, no protests after dark.

Second, to the extent state or local governments continue to keep businesses closed or severely hampered to combat COVID-19, they should provide targeted financial assistance — think of it as compensation for injuries imposed by government — so that at least some of these businesses can survive long enough to reopen profitably.

Third, begin deregulating our overly restrictive zoning codes and other impediments to urban redevelopment by private enterprise. Such redevelopment will, alas, be sorely needed.

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