Regional Report Charlotte September 2010
Charlotte lost more than its swagger and one of its two megabanks in the financial meltdown of 2008. It also shed lots of well-paying jobs. In Mecklenburg County alone, the number of financial-sector jobs fell 7% to 48,158 in 2009, according to the state Employment Security Commission. The average weekly wage in that sector dropped 10.8% to $1,715.61. “We lost, with the merger of Wachovia and Wells Fargo, 215 to 300 high-salaried individuals,” says Tony Crumbley, vice president for research at the Charlotte Chamber of Commerce. “These are million-dollar-a-year jobs.”
Trouble at the banks had a ripple effect on professional firms that work with them, says Mike Walden, an economics professor at N.C. State University. All of that helped decrease the average weekly wage in Mecklenburg County 2.6% in 2009 to $997.36, while the statewide average rose slightly to $766.08. But Mecklenburg didn’t suffer alone. Wages dropped in every county of the Charlotte region — the only region in the state so affected — and Mecklenburg wasn’t even the worst of it. The average wage in neighboring Cabarrus County fell 3.3%. Another of Mecklenburg’s neighbors, Union County, fell 2.6%.
In each county of the region, national and local circumstances contributed to the wage declines. Recession has dealt a big blow to manufacturing nationwide, and several counties suffered layoffs by big manufacturing employers. In Cabarrus, 1,100 jobs went up in smoke when Richmond, Va.-based Philip Morris USA Inc closed its cigarette plant in Concord last year. That accounted for 18% of the nearly 6,000 jobs the county lost in 2009. Cabarrus also suffered from the woes of NASCAR racing teams based there. “A lot of those companies that were sponsoring them have had to cut funding, so as a result they’ve had to cut staff,” says Vanessa Goeschl, vice president of research at the Charlotte Regional Partnership, an economic-development nonprofit. “Those are $70,000-a-year jobs.”
But it’s more than just isolated cases of bad luck or random effects of recession that caused wages to drop throughout the region. With the biggest and best-paid work force, Mecklenburg impacts economies in neighboring counties. “A lot of the people that were making money here, they lived in the outlying counties,” Goeschl says. “They bought large homes. They spent their money on luxury items, and that’s been scaled back.”
The reduction in spending resulted in wage cuts and layoffs in surrounding counties. “That income that was circulating in the region has declined. With that, the purchasing power has declined. The number of goods and services being bought has declined.”
The Epicentre cannot hold
It’s a hub of entertainment and shopping in downtown Charlotte, but since opening two years ago the 300,000-square-foot EpiCentre also has been the focal point of disputes between its developers and contractors (Regional Report, September 2009). Now it’s a battleground fought over by the developers and their lender. In July, Birmingham, Ala.-based Regions Financial Corp. began foreclosure proceedings against Pacific Avenue LLC and Pacific Avenue II LLC, Charlotte companies managed by Afshin Ghazi, which the bank says have defaulted on a $90 million debt. Ghazi’s companies moved to prevent foreclosure on the property — just a block from Bank of America Corp. headquarters and the home court of the Charlotte Bobcats — by filing for Chapter 11 bankruptcy.