July 25, 2007
More manufacturing cuts
North Carolina's traditional economy suffered two recent blows, the first when Philip Morris USA announced it would close its giant cigarette factory in Cabarrus County and the second when Hanesbrands Inc. said it would close a large apparel factory in the state. The moves mean thousands of lost manufacturing jobs for North Carolina, and N.C. State University economist Mike Walden says they continue a longstanding trend.
"Unfortunately both for the companies and the workers, this is part of a trend. And it's really not a new trend," says Dr. Walden, a professor in the College of Agriculture and Life Sciences' Department of Agricultural and Resource Economics. "Textiles has really been downsizing for now, really, almost two decades, and they have done more so in the past decade.
"For tobacco this is the result of the reduced incidence of smoking in the U.S. It's also the result of the growth of foreign competitors," he adds. "For apparel, production can now be done more cheaply for many apparel items in foreign countries that have lower labor costs. And as trade barriers have been reduced more of that production is going to those countries.
"The good news for the North Carolina economy, ... if you look over the past 20 years or the last decade, is that our economy has been able to absorb those job loses" he concludes. "We are still one of the fastest-growing states in the nation. The bad news, though, is the workers who are let go from these factories will likely need to retain and -- or -- relocate in order to get comparable paying jobs."
Posted by deeshore at July 25, 2007 11:49 AM