Gauging Charlotte's place in the economy
Thu July 30, 2009
Gauging Charlotte's place in the economy
The economy has seen some encouraging signs lately. Home sales in the Charlotte region are starting to pick up and the DOW is now back over 9,000. But some unsettling signs continue. Unemployment continues to rise. The Charlotte region is now at 12.4 percent unemployment. WFAE's Public Conversation series addressed these issues last night at a forum that examined Charlotte's place in the economy and what a recovery might look like here. WFAE's Lisa Miller has more: The consensus last night was that the economy isn't getting any worse at this point. Matthew Martin, head of the Federal Reserve's Charlotte branch, put it this way. "It's sort-of like the patient from the car accident that you weren't sure was going to live and then the doctor finally comes out and says he's going to make it. Right?" explains Martin. "They're not out of the hospital; they're not better yet. But you can see a path to where they're going to get better over time." But not everyone is bound to feel that recovery the same way. Take the Charlotte banker who saw his company in the middle of a tug-of-war last fall. "I think it's probably a little bit better than it was six months ago, a year ago," says the bank employee. "I mean, I work at Wachovia, you know, Wells Fargo, whatever. But the company's been in flux, seems like it's maybe settling down a bit." But to a cab driver trolling for customers uptown, the economy still feels very much doomed. "To be honest, the economy is really very bad," says the taxi driver. "Usually we make pretty good money. It's affecting everybody's job. People have no job, so they don't call cabs. Very bad, you know." John Silvia, Chief Economist at Wells Fargo, said last night even though not everyone is feeling it, the economy is slowly getting better. But the people who may need a recovery the most, could be the last to feel it. "The more educated you are on average, the higher you're income growth over time. It is those computer-literate, college-educated folks that will benefit immediately," explained Silvia. He said it will be these people who will be in demand over the next 2 to 5 years in the Charlotte region, while times may continue to be difficult for many blue-collar workers. "The old manufacturing, the old Pillowtex jobs that we're all familiar are pretty much gone by the board," said Silvia. "You can see it within our state, the huge disparity in unemployment for example in the Hickory region which is really a pretty hard-hit furniture region compared to some of the service sector." In June, unemployment in the Hickory region was at 15.4 percent, three points higher than in the Charlotte region. Both Silvia and Martin agree that re-training will be crucial for people laid-off from manufacturing work to find new jobs as the economy improves. But just because the economy may be getting better, doesn't mean the unemployment rate will begin going down. In the Charlotte region, the unemployment rate has almost doubled from last June. Martin expects it to continue to rise even in a recovery. "Some of that optimism brings people locally back into the labor force who might have stopped looking for work," said Martin. "But then you start seeing that immigration pick up. So the people filling these jobs aren't all local people. There will be a pool of available labor locally, but some of those people are going to move in." Martin won't say the Charlotte region is in recovery mode quite yet. Just yesterday, the Federal Reserve released a report that characterized the region that includes the Carolinas, Virginia and Maryland as weak. Still, Martin says Charlotte's economy is pretty close to a turnaround, albeit a very slow one. "The longer term outlook for the region is very positive. I'd be very optimistic about that," said Martin. "That doesn't mean that the near term isn't difficult for a lot of families though. But there are probably a lot worse places to be over the next few years." But how quickly you feel a recovery may depend just as much on your field of work as your location.