Work starts to pick up
Things will get better — eventually. That’s what most of the economists quoted in the last few introductions to Business North Carolina’s annual ranking of the 100 largest private-sector employers forecast. With the state having an unemployment rate now among the nation’s highest, it’s no wonder they had modest expectations. But according to Appalachian State University finance professor Harry Davis and some of his peers, maybe eventually is now. “Clearly the unemployment rate here is going to go down,” Davis says. “The question is, how far?”
It could improve a half-percent or more this year, he says, with health care and technology leading the way. A majority of the large health-care providers on the list have added employees since the recession began four years ago, with Greenville-based University Health Systems of Eastern Carolina Inc. (which has rebranded itself Vidant Health) increasing by about a third. But that kind of growth is not typical, says Don Dalton, spokesman for the North Carolina Hospital Association. “It’s like that old real-estate thing — location, location, location. Look at our smaller communities across the state: The population is skewed toward being older and poorer. Some of our hospitals have had to lay off people and curtail services because of the demographics within their communities.” The association represents 130 hospitals and health-care systems. “As a field we have grown, but it is not growth universally, across the field.”
There might be some surprises in store. Even manufacturing, whose decline predates the recession, could show improvement, Davis says. “The cost of energy and transporting stuff from China back to us, plus the cost of labor going up faster in China and the Chinese currency going up relative to the dollar — put those things together and there are going to be manufacturing jobs coming back to the U.S. and North Carolina. I’m not looking for big changes this year, but it’s a significant turnaround from what we’ve seen in the last decade and something for us to watch.”
Perhaps more indicative of recovery is consumer sentiment. The percentage of paychecks going to service debt is down to what it was in the 1990s, N.C. State University economics professor Michael Walden says, and well below what it had been during the recession. “That means more households feel as though they have their financial balance sheets to acceptable levels, and they’ll start to spend more. We are a consumer-spending economy.” Discount retailers are responding by increasing their Tar Heel workforce. Three of the four on the largest-employers list have added workers. Compared with the 2008 list, compiled just as the nation was entering recession in late ’07, this year’s ranking shows Dollar General Corp. has added about 1,160 — roughly 32% — while giant Wal-Mart Stores Inc., which consistently tops the list, has grown about 2%.
“Clearly what happened during that period, which captures all of the recession plus the modest-to-date economic recovery, is the recession raised unemployment and reduced household wealth,” Walden says, “but people still needed to shop to some degree, and they’re looking to economize on their spending. So discount retailers are attractive in the sense that they offer the best dollar values. The employment change captured the fact that they were gaining market share.” Wal-Mart added more employees in North Carolina from late 2007 to late 2009 than it did during the last two years.
Overall, this year’s largest 100 employers had 708,370 on their payrolls when surveyed late last year through early January. That’s an increase of about 4% from the previous year, when total employment for the companies that were on it was 681,150, a 2.8% increase over its predecessor.