Dr. Mike Walden
North Carolina Cooperative Extension
North Carolina has been a state on the move – literally. As a result of people moving to North Carolina from other states, the Tar Heel state has moved up in the population rankings. In 1970 North Carolina ranked 12th among the states in population. Today, with a population just shy of 10 million, our state is the 10th most populous state and will soon likely pass Michigan for 9th place.
With more people has come greater economic clout. North Carolina’s Gross State Product – the annual value of everything produced in the state – is now $471 billion. This is more than the economic output of several countries, including Austria, South Africa and Colombia. North Carolina ranks 9th among the states in Gross State Product. Thirty years ago North Carolina’s ranking was 12th.
It wasn’t always this way. Until the 1970s, North Carolina’s population growth significantly lagged the national rate. Part of the reason was the state’s rural geography, with few large cities to attract households, particularly those from foreign countries. Also, as agriculture mechanized and Northern manufacturing developed, thousands of North Carolinians left the state for jobs and homes in the North and Midwest.
But this all turned around in the last three decades. North Carolina has consistently placed in the top five of states for in-migration, which measures the movement of households from state to state. More households have been moving to North Carolina than have left. Since the 1980s, in-migration has accounted for over half the state’s population growth, with people moving here from other countries – termed immigration – accounting for another 16 percent. Clearly, the “people magnet” that North Carolina has become is largely responsible for its rapid population and economic expansion.
Will this growth continue? Professional demographers think so. These experts predict North Carolina’s population will reach 11.6 million in 2030. I’ve used a similar methodology to project the state’s population attaining 13.4 million in 2050. The rates of increase will gradually slow (21 percent from 2010 to 2030, and 16 percent from 2030 to 2050), but North Carolina’s population growth rates are projected to be higher than the nation’s over the coming decades.
Yet with birth rates thought to remain low in the future, North Carolina’s population growth will depend on continued in-migration. Three major factors have been drawing people to our state.
First is job growth. Even including the Great Recession, North Carolina has had faster job growth than the nation in the past two decades.
Second is affordable housing. Studies show interstate movers are attracted to states with modestly rising housing costs. Again, in the last two decades housing prices in North Carolina have risen less than the national average.
Last, movers appear to like warmer states with plenty of sunny days and temperate winters, where heating costs won’t be a big burden. North Carolina – like most of the South – certainly fits this bill.
Of course, a big question is whether these positive features of North Carolina will persist in coming decades. As the state grows and becomes denser, home prices could rise faster. Also, a scenario can be developed wherein the state’s lower rate of educational attainment, relative to many other states, makes it a prime candidate for massive unemployment as robots and technology replace humans in many workplaces.
Some even question whether the sunny South will remain attractive if climate change results in significantly higher temperatures. Then, currently colder Northern states may become the temperate regions in which to live.
So the projections for North Carolina’s continued population growth – largely based on people moving here – have to be viewed through the lens of uncertainty about what might happen in the future to the state’s current drawing cards.
Finally, there is an even deeper question as to whether population growth is desirable. This is an old debate, and there are two distinct camps. One says a thriving, growing economy needs more people to constantly stoke the innovative fires and to create more productive and efficient businesses. The other side strongly disagrees, arguing that innovation can happen even with a stagnant or slowly growing population – and also that no or slow growth saves precious limited resources that can’t be replaced.
One of the key components of visualizing the future is population size. Although forecasts can be made, they are not infallible, mainly because the future is so cloudy. Still, to plan for what kind of economy we’ll have, we have to start with the major ingredient – the number of people. You decide how we’ll come up with this number!
Dr. Mike Walden is a William Neal Reynolds Distinguished Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The College of Agriculture and Life Sciences communications unit provides his You Decide column every two weeks.
Previous columns are available at http://www.cals.ncsu.edu/agcomm/news-center/tag/you-decide
Related audio files are at http://www.cals.ncsu.edu/agcomm/news-center/category/economic-perspective