Friday, May 4, 2012

Weathering the downturn – or not?

For decades Charlotte was known as the metro region that simply shed recessions like water off a duck's back. But will the current downturn belie that reputation? That's the key question being explored today at a conference today that has drawn several dozen experts in regional resilience to Charlotte's Duke Mansion.

Obviously the answer to that can't be known just yet. But some interesting information has come out, particularly during a panel discussion I served on this morning. The group that came to Charlotte is the MacArthur Network on Building Resilient Regions, which has studied metro regions for years. They look at how metro regions react to major economic shocks. Are they resistent? Or do they bounce back, i.e., are they resilient? Or re they non-resistent? They studied the Charlotte region's response to previous economic downturns – finding the region either resistant or resilient. But their study ended before 2007. They haven't been back, and they wanted to get caught up on the situation here since the banking crisis.

One key stat we talked about: The metro region's (that is, the MSA's) percentage for employment in banking and finance is virtually unchanged now from what it was pre-2008. Another: The manufacturing sector in the region has gone from one-third of the employment in 1980 to, by 2005, less than 10 percent.

Another, from panelist John Connaughton, a UNC Charlotte economist: Since the downturn began, the U.S. has regained 40 percent of the jobs lost. North Carolina has regained only 25 percent of its lost jobs. The Charlotte MSA has regained 50 percent of its lost jobs. But, he pointed out, what Charlotte lost, when it lost the Wachovia headquarters when that bank was bought by Wells Fargo, was some high-paying jobs. The real issue, he said, is the loss of blue-collar jobs: manufacturing and construction jobs.

"Charlotte is a very diverse economy," he said. He predicted the metro region will spring back. "It will be the star that it was," he said.

The panel also talked, predictably, about the need for education. I mentioned the region's history in the past centuries of not valuing education, especially for low-income farm- and mill-workers. And this region remains comparatively poor in post-baccalaureate education and research universities. UNCC is on the road to creating a reputation for research, but as Hal Wolman, director of the George Washington Institute of Public Policy conceded, it does not now have a national reputation for research.

If cities are made more resilient to downturns by having strong education, government and health sectors, then Charlotte may be at risk. One out of three may not be enough.


James Brooks said...

Charlotte, like lots of cities, has a mismatch in worker skills vs. employer needs. As in places like Chicago, attention needs to focus more on K-12 education. Low educational attainment generally equals high poverty and few employment prospects. Charlotte's life science and aerospace and IT sector need talented people but big value will come from hiting the educational basics first.

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