Economist: Economy isn’t growing fast enough, high-tech jobs should be priority
The nation’s economy is growing, but not fast enough, according to a local economist.
Associate Professor Eric Hake, who teaches in the School of Business at Catawba College, said there are signs of improvement in the economy, but slow growth and stagnant incomes are problems.
Hake spoke during the Rowan County Chamber of Commerce Power in Partnership breakfast at Trinity Oaks Thursday.
There has been a “series of false starts” in the nation’s economy since the recession ended., Hake said. The recovery is taking longer than others have in the past.
Economic growth isn’t happening fast enough to make up for the losses suffered during the downturn that followed the collapse of 2008, Hake said.
“You’ve got to make up the difference, you’ve got to grow more quickly,” he said.
For Rowan County, he said bringing high-tech manufacturing jobs to the region should be a priority so people will have access to good paying jobs. And it will be important for regional governments to find ways to work with businesses and the banking community to encourage growth.
Since the 1970s, the amount of time it has taken for the economy to recover after a recession has been getting longer, according to Hake, who used charts and graphs as visuals during his presentation.
It’s taken longer than six years for the unemployment rate to get back to pre-recession levels, longer than in previous recessions.
Due to the depths of the recession, there was an enormous growth of deficits at the state and federal levels, Hake said. Loss of incomes caused people to rely on government support, and tax revenues diminished. Now, the federal government is in a position where it has to tighten its budget even if it’s not good for the recovery, he said.
The recent dramatic drop in gas prices has provided a huge amount of disposable income, which is a boost to the economy. Hake said he doesn’t see gas prices increasing anytime soon.
North Carolina’s economic growth is ahead of the national average, Hake said, adding that the state’s urban areas are seeing sustainable levels of recovery while the rural areas are lagging behind.
Rowan County fits into the rural lag. But, in a recovery, urban areas tend to grow a little more quickly, he said.
In North Carolina, the median household income fell by more than 4 percent after the recession ended. Since 2000, incomes in the state are down 7 percent.
“Those are some numbers that really have to be paid attention to and addressed,” Hake said.
Nationally, middle-class incomes are stagnant while incomes for the wealthily are on the rise.
Without income, and without demand, there won’t be growth in supply, Hake said.
Speaking about Rowan County, Hake said the decline in the labor force has played a role in the declining unemployment rate.
“That is an issue,” he said.
Average annual pay for Rowan County workers did increase slightly in 2014, Hake said.
Contact Reporter David Purtell at 704-797-4264.