So far this year, around 30 companies have decided to move here or expand operations with projects that could qualify for state incentives. That’s a pace a little ahead of what we usually get each year, so that’s encouraging, and they include some blockbusters like Apple (3,000 jobs) and Fujifilm Diosynth (725).
Around half of the projects recruited so far are manufacturers. A number of them are in more rural counties, and they get less attention. But they are significant, because building back the state’s manufacturing capacity has been a major economic development goal.
One of the things you will continually hear is how our manufacturing base declined. But it is difficult to grasp what that means without some numbers, unless you grew up in a factory town, and why every new manufacturing company expansion is a big win.
I went to the N.C. Department of Commerce database of the top 25 employers in each county going back to 1990, by number of workers. I downloaded 1990 into a spreadsheet and did the same for 2020, just to add up the major employers by industry to see what it looked like. The information comes from the Quarterly Census of Employment and Wages, which is a joint federal-state effort of the North Carolina Commerce Department’s Labor and Economic Analysis Division (LEAD) and the U.S. Bureau of Labor Statistics. Basically, the information is pulled from things like regular unemployment insurance tax and wage reports employers file with the state government.
In 1990, there were 927 manufacturing companies that were top-25 employers in each of the 100 counties. In 2020, there were 502. That’s consistent with the broad trend. In 1990, more than 860,000 North Carolinians were in manufacturing, roughly a third of the labor force employed by companies, according to the census. By last year, that had fallen to around 450,000, according to the QCEW. Which meant around 12% of today’s workers on private payrolls.
Many lost jobs were in furniture and textile as the state was heavily concentrated in those industries for much of the 20th century, especially in the Piedmont. We had abundant natural resources and a large labor force that the farming economy — increasingly mechanized and efficient — no longer required.
But part of manufacturing’s shrinking role in the state’s economy was the rapid growth of other sectors, like finance, technology and biotech. The state’s population has increased by nearly 60% since 1990, growth fueled by these sectors, mostly in 20 urban and suburban counties.
Impact on the counties
The problem with describing the loss of manufacturing jobs is that when the losses are summed up at the state level, they lose impact. I went to the census to look at the role manufacturing played in the counties in 1990, compared with 2019 figures.
Manufacturing jobs 30 years ago were nearly everywhere, but 10 counties had more than 40% of them.
The leader in 1990 was Mecklenburg, with nearly 59,000 jobs distributed across a range of industries such as metal fabrication, electronics, food production and tires. A close second was Guilford, a more traditional textile, furniture and tobacco county. But in Mecklenburg, manufacturing only made up around 16% of the private workforce. As you might expect, the banks were big employers, as well as Duke Energy (then Duke Power.)
Wake, another large urban county, had nearly 30,000 manufacturing jobs, but that was 14% of the private workforce in a region with booming service and IT sectors.
It was the smaller counties where manufacturing was a bigger deal.
Catawba County, in the foothills of the Blue Ridge Mountains, helped make North Carolina the nation’s top producer of household furniture, and furniture was the second-leading manufacturing industry in the state, behind textiles.
Catawba had more than 43,400 manufacturing jobs in 1990, mostly in furniture and textiles. That dwindled to 23,500 in 2019. The lowering of trade barriers 20 years ago was followed by a surge of Chinese wood furniture imports. By 2016, more than 70% of furniture sold in the U.S. was imported. (Now Vietnam has overtaken China as our largest supplier.)
Furniture is still made in Catawba. A half-dozen smaller companies are in the Top 25 list. But the industry is focused on the higher end of the market and upholstered furniture.
Catawba’s largest for-profit employers are Corning Optical Communications and CommScope, which have thrived with the exponential growth of networks.
Mills everywhere
In almost every county in the 1990s, there were textile and apparel mills, producing yarn and fabric, sewing shirts and trousers. If you pass an empty factory building in rural North Carolina today, chances are it was operated by one of the 2,000 companies that employed nearly 280,000 textile and apparel workers 30 years ago. Now about 44,000 work in the business here. The jobs went to Asia and Mexico, much like the jobs came here a century ago from New England. There is always a cheaper place, a reality most recently visited upon the Brooks Brothers factory in Sampson County, which closed last summer.
In a number of counties, textiles and apparel were the major employers, such as Alamance, Bladen, Cleveland, Columbus, Gaston and Robeson. Gaston County, across the river from Charlotte, was a center of textile manufacturing, which made up half of the county’s private workforce in manufacturing with about 20,000 employees in 1990. Today, there are around 3,300. Montgomery County had 4,800 textile and apparel workers 30 years ago, compared with 450 today.
While many farmers were growing tobacco in 1990, fewer than 15,000 North Carolinians were manufacturing cigarettes and related products in factories in Forsyth, Guilford, Durham, Cabarrus and a few other counties. That has declined to 5,500.
Brute force
North Carolina knows the brute force of globalization. Few states have experienced it like we have. I was reminded of this the other day by a story in the New York Times about Rocky Mount Mills, and the redevelopment that transformed it into “a bustling complex with restaurants and breweries.”
In the first quarter of 1996, it was the 19th-largest employer in Nash County, with more than 300 workers. By that summer, it was closed.
About that time, I moved from Maryland to the Johnston County town of Clayton, where textile mills had operated for nearly a century. The Champion plant, with more than 400 employees, was the largest employer before Caterpillar and pharmaceutical companies like Novo Nordisk arrived. It shut down in June 1997. A few months later, Burlington Industries closed its yarn-spinning plant at the county seat in Smithfield, eliminating 190 jobs. Burlington had already closed its plant in northern Wake County, eliminating 765 jobs.
A deep imprint
The last 30 years have left a deep imprint on North Carolina. Economic development has become the state’s central organizing principle. The state and counties and regional organizations are on the prowl every day for companies to bring here, particularly to rural areas. Our 58-school community college system is focused on creating a more skilled workforce.
We were complacent years ago, thinking that abundant jobs in the furniture, textile and tobacco factories would last long enough for us to pivot to the post-industrial, global economy. We didn’t move fast enough. We have a more diverse business ecosystem today; the 250 companies that the state has recruited with incentives the past five years represent a wide range of sectors. There is an urgent focus on education from groups like myFutureNC, which is pounding away at the need for everyone to get a certificate, get an associate’s degree, get skills for jobs that can’t be easily moved to a cheaper country.
And yet I worry that local politicians get too excited about massive, new Amazon distribution centers, and other warehouses of the e-commerce economy. I fear that by the middle of the next decade or sooner, automation will have advanced to replace what humans are now doing in them. There are just too many workers doing repetitive tasks. Better to go to community college to learn how to fix robots than be replaced by robots.
I had been down in the weeds with the data. I wanted a bigger picture, so I emailed economist Michael Walden. He retired from N.C. State in March after 43 years.
“Three decades is a long time in the economy,” he wrote back. “Further, the past 30 years have been game-changing for North Carolina — both good and bad. On the upside has been the growth of our tech, pharmaceutical, and financial services industries, as well as the positioning of our two big metros – Charlotte and the Triangle — at the upper levels of the national economic stage.
“On the downside is the demise of the state’s traditional “Big 3” industries – tobacco, textiles, and furniture — as a result of globalization and medical concerns (tobacco). The contraction of the Big 3 is behind many of the economic struggles of our rural counties, pushing the ‘urban-rural’ divide from a crack to a chasm.”
What is likely is more disruption.
“One can only imagine how technology will change the economy,” says Walden, “with technologies like AI, virtualization, and 3-D manufacturing to name a few. Add the rise of remote working and those of us who live to mid-century (I’m 70, so the odds are not in my favor) won’t recognize the future economy. Yet one positive result could be the expansion of remote working leading to a renaissance in rural and small town living – assuming high-speed internet is available everywhere, which I think it will be. That is actually the topic of the next book I am writing.”
