Opinion: North Carolina surpasses its northern neighbor

 In February 2019

Opinion

By Mark Washburn

Our scenic borders are separated by a mere 60 miles, but nowhere in America is the economic gradient steeper than between North Carolina and West Virginia.

One prosperous, one stricken. One growing, one wilting. Quantifying the gap is the latest annual Best States for Business ranking by Forbes magazine that puts North Carolina at the top of the contiguous 48 states and West Virginia at the bottom. In overall economic climate, the Forbes formula ranks North Carolina No. 12, West Virginia No. 48; for overall quality of life, it’s No. 12 vs. No. 46.

Once upon a time, the two states languished closer on the poverty line. North Carolina was derided as the “Rip Van Winkle” state in the first half of the 19th century, largely because its leaders were satisfied with an agrarian economy challenged by a lack of transportation. Its education system was decrepit, and it was losing population.

But small decisions pay big dividends over the course of time. In the 1850s, N.C. lawmakers gambled that a railroad to the state’s western precincts would spur development, and they were right. Good road programs in the early 20th century boosted agriculture and manufacturing.

In West Virginia, cleaved from Virginia during the Civil War, mountainous terrain was difficult to overcome even by rail. Timber and minerals were the state’s greatest resources, and through the years, extraction of both left the economy beholden to out-of-state corporate overlords.

Labor wars in textiles and coal are woven into the history of each state. But North Carolina reached labor peace in relatively short order and now has the second-smallest union workforce at 3% of total employment. (Neighboring South Carolina is the smallest.) West Virginia, though also a right-to-work state, is at 11%. Labor strife continues.

West Virginia’s wealth relied on coal, steel and chemical manufacturing. Those industries have withered, and now the state’s poverty rate is nearly 20%. North Carolina’s legacy industries of furniture manufacturing, textiles and tobacco have fared poorly as well, but a small decision back in the 1950s blunted the impact.

N.C. leaders gambled that a research park in the pinelands between UNC Chapel Hill and N.C. State and Duke universities would attract well-paying technology jobs. It was a good fit for a state that had long invested in education, and the payoff kept growing (see our story on the Research Triangle Park in this month’s issue).

Soon, pioneers of interstate branch banking enriched the business hub of Charlotte. There was plenty of capital for investments around the state. As North Carolina’s research universities gained national prominence, the state invested in its community-college system to produce skilled workers. West Virginia re-invested largely in roads and catch-up social projects.

Small decisions, big returns. A century after the two states struggled in relative poverty, their paths have diverged. In North Carolina, 31% of the workforce is college-educated; in West Virginia, it’s 20%, lowest in the nation. North Carolina ranks No. 11 in labor supply; West Virginia, No. 50.

North Carolina adds nearly 100,000 residents annually. West Virginia loses about 2,600, worst in the nation. West Virginia’s population peaked at 2 million in 1950; it has sagged to 1.8 million and has one of the most aged citizenry. North Carolina’s population has soared from 4 million in 1950 to 10.3 million. Both states enjoy spectacular natural beauty, but while wealthy retirees have flocked to the culture-rich western North Carolina uplands around Asheville, West Virginia hasn’t attracted upscale senior settlers in great numbers. Its rugged topography remains a barrier rather than a magnet. A generation ago, West Virginia’s labor slogan was jokingly summed up in the Three Rs: “Readin’, Rritin’ and the Road to Akron.” Now many of those exports are drawn to North Carolina. Their new slogan: “Only one tank of gas away.”

Our migrants will be bringing one other thing: After the 2020 census, one of West Virginia’s three congressional seats will be moving 60 miles down Interstate 77 to a new home. Investment in brainpower paved the path.

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