“For decades, there has been a consistent relationship between the level of education and unemployment rates. The more education a region’s people have, the lower the unemployment rate will be. There are no exceptions to that rule.”
vice chancellor for administration and finance at East Carolina University
By Michael Abramowitz
Tuesday, January 15, 2013
Eastern North Carolina, along with the state and the rest of the nation, is nearly fully recovered from the recession of 2009, but education will be the key to real economic growth, an ECU economist said Monday.
“With a couple of exceptions, virtually every national economic indicator has fully recovered or is clearly and convincingly recovering,” Rick Niswander, vice chancellor for administration and finance at East Carolina University, said Monday at the Greenville-Pitt County Chamber of Commerce’s Economic Forecast Luncheon.
Per-capita income in North Carolina and the Greenville Metropolitan Service Area (Pitt and Greene counties) is above where it was at the start of the recession but below the national average, Niswander said.
The employment market has shown national and local improvement, Niswander said. Pitt County has added jobs, but unemployment rates have not returned to pre-recession levels. The reason for the disparity is the growth of the workforce by more than 9,000 people, he said.
While most recovered jobs in North Carolina were in the service industries, Pitt and the Greenville MSA are below the national average in professional and business services jobs.
“It’s not as strong as we want or need, but it’s positive job growth after a very deep and wide recession that affected every aspect of our economy,” Niswander said. “The center of the state is doing relatively well, but the east and west are not recovering as quickly. We have to convince state legislators who are not from the east that North Carolina does extend farther east than Zebulon.”
Manufacturing lost 150,000 jobs during the recession even while manufacturing output increased, Niswander said. That is evidence the key to North Carolina’s manufacturing growth is education, he said.
“For decades, there has been a consistent relationship between the level of education and unemployment rates,” Niswander said. “The more education a region’s people have, the lower the unemployment rate will be. There are no exceptions to that rule. Job loss tends to occur most in areas that don’t require high levels of training. Education matters, now and in the future.”
The real gross domestic product of the United States now is higher than when the recession started, Niswander said. Some indicators, like car and truck sales, which were at 17.5 million per year when the recession started, have not recovered to pre-recession levels. That likely is because those levels were at unsustainably high levels then, Niswander said. Even so, after dipping to 9 million at the depths of the recession, auto sales now are at 15 million, which is healthy, he said.
The housing market is not recovering as quickly, though, with prices, housing starts, and sales and construction spending not recovering as well as economists would like to see, Niswander said.
“They are all above their low marks and clearly recovering; it’s just taking even longer to get back to where we want them to be,” he said. “New home starts are just barely moving up.”
Niswander focused in on the upcoming national budget showdown in Washington, D.C., where lawmakers are debating increasing revenues versus spending cuts.
“As things stand, we’re $1 trillion underwater,” he said. “If you protect Social Security, Medicare and Medicaid, defense spending, and interest payments on the national debt and cut all (non-mandatory) spending entirely, you still will not have a balanced budget. That, to me, means we have to put everything on the table (for cuts), including the big stuff, because you can’t fix (the debt) if it’s not.
“Whatever we do, it will affect the national economy.”
Contact Michael Abramowitz at firstname.lastname@example.org or 252-329-9571.
via The Daily Reflector.