Wednesday, June 19, 2024

Economic nationalism’s growing appeal

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As manufacturing industries in North Carolina unraveled in the last 20 years, it was conventional wisdom that middle-class factory jobs would be replaced with middle-class work in service industries and at more technologically advanced plants making higher-quality products. Let the commodity stuff go overseas, the CEOs and academics said. Domestic producers would still make the best bearings, brakes and whatnot. Moreover, expanded wealth in Asia and Latin America would prompt more exports.

Part of the conventional wisdom panned out. Manufacturing jobs in North Carolina plummeted from 800,000 in 1998 to as low as 430,000 in 2010. The job total has inched back up to about 460,000, according to the most recent federal data.

Meanwhile, professional and business-services jobs soared 70% to about 630,000. Despite the textile-furniture collapse, total employment increased 24% as the state added more than 900,000 jobs.

What didn’t pan out was the expected surge in exports to Asia, nor did many anticipate how hard it would be for rural cities to rebound or lesser-skilled manufacturing workers to adapt. The Chinese proved unwilling to allow even the most innovative U.S. companies, let alone the less successful furniture and textile ones, to gain significant market share.

The real-world impact is massive resentment about stagnant wages for rank-and-file workers who haven’t shared in the stock market’s gains or other prosperity measures. Per capita income in our state has declined relative to the national average in recent years.

Political operative Steve Bannon tapped into this anger with an economic nationalism theme that propelled Donald Trump’s victory. Now, Bannon is pushing the president to reverse decades of conventional global economic wisdom.

While Bannon’s rhetoric on immigration and other issues is offensive, his view that economic policies should benefit more people is a winning, bipartisan strategy. Losing some manufacturing work to lower-wage countries was inevitable, but wiser business and political leadership could have slowed the process, averting some tumult experienced by North Carolina families in rural areas.

We were warned, especially by the late South Carolina textile magnate Roger Milliken, who campaigned for economic nationalism for decades, unsuccessfully. Much of North Carolina outside Raleigh and Charlotte would be more vibrant today if federal and state leaders had worked to develop policies to slow the pace of offshoring, buying time for domestic companies to adapt. In other words, the same approach of virtually every other nation.

It’s never too late to change, and one helpful approach could be to encourage broader ownership of private businesses, as highlighted in this month’s story on Quaintance-Weaver Restaurants & Hotels. Having more people invested in their daily work seems like an obvious way to create businesses with deep community roots and long-term visions. Despite the successes of Publix and others, employee-owned companies remain oddities. Why is that, I asked a friend who helped build one of the biggest ESOPs. “Greed,” he said, noting owners often receive more by selling to outsiders. Which is all the more reason to applaud Mike Weaver and Dennis and Nancy Quaintance for their succession plan.

An October story exaggerated Morehead Memorial Hospital CEO Dana Weston’s view of the state’s decision to block Medicaid expansion. It is one of many factors hurting rural hospitals, she says. The story also said Novant Health assigned her to Morehead; she applied for the job.

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at

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