In North Carolina, where one in nine workers can’t find a job, there’s a county where the tough times haven’t been all that bad.
In fact, unemployment is well below the state average, relatively few homes are falling into foreclosure and people are still flocking to restaurants and spending money at stores.
The Teflon economy of Orange County is unique to the state but not the U.S.
The United States is dotted with places that appear to be islands of relative prosperity in the sea of recessionary woes.
A common trait among these counties: At least 15 per cent of the work force is employed by the government, according to an Associated Press analysis.
In Orange County, it’s the University of North Carolina, the nation’s oldest public university and, in good times or bad, a job-creating machine. Elsewhere, it’s military bases, state capitals, universities and other government institutions.
The Associated Press’s Economic Stress Index, which factors in unemployment, foreclosures and bankruptcies to calculate a score that measures the relative impact of the recession, shows that about 300 of the nation’s 3,000 counties are being sheltered from the economic storm by large numbers of workers who get paychecks from federal, state or local governments.
The analysis, which assigns each county a score from 1 to 100 with higher numbers reflecting the greatest stress from the recession, also suggests the locales are in a strong position to weather likely cuts in government spending.
The Associated Press found that for every 5 point drop in the percentage of government workers a county has, there was a corresponding 1 point rise in the county’s Economic Stress score.
In Riley County, Kan., the military and Kansas State University dominate the work force. Leon County, Fla., where Tallahassee is, relies on state government. And in Los Alamos, N.M., it’s a national laboratory.
In Orange County, which also includes part of the Research Triangle, 25 per cent of the jobs are government funded, according to Census Bureau data.
Its latest Stress Score: 6.63. In neighbouring Alamance County, by comparison, 1 in 20 jobs are government funded. Its Stress Score: 12.92.
The University of North Carolina has 12,000 employees. On top of that, tens of thousands more people — students, researchers, patients at the university’s hospital and sports fans — pass through campus and spend money. In March, as the rest of the country was hitting the bottom of the recession, Orange County was cheering the school’s basketball team on to a national championship.
The team’s run “brought us tens of millions in new purchasing over the last month and a half,” said Aaron Nelson, president of the Chapel Hill-Carrboro Chamber of Commerce.
“Every game we go further into a tournament is another evening of absolutely full bars and restaurants.”
The university’s work force alone is paid US$1.2 billion a year in salary and benefits, an average of US$100,000 each.
The state is facing a budget deficit of up to US$4 billion and has told workers to take 10 hours of unpaid time off this year to save money.
“In good economic times, a 3 per cent pay increase for state employees is like recruiting a new employer with a $50 million payroll,” Nelson said.
There are limits to government-financed job security — the good times are never quite as good because a boom doesn’t inflate government pay the way it can wages in the private sector.
And when tax revenue drops, bad times can affect government employees — states from California to Maryland have plans to furlough workers and cut pay this year.
Nelson also points out that government institutions typically don’t pay property taxes.
And big government employers are subject to abrupt change that may have nothing to do with the broader economy.
Riley County endured several years of unexpected pain when the U.S. Army moved thousands of soldiers from Ft. Riley to Germany in the mid-1990s.
But even if governments take the drastic step of cutting jobs, it’s usually not on the scale now common among big corporations and small, locally owned shops.
It’s often just too tough to lay workers off “because of the unions, because of the civil service protection,” said economist Suzanne O’Keefe at Sacramento State University.
At the University of Illinois, for example, the last sizable round of layoffs came in 2003.
Only 44 people lost their jobs — about one half of 1 per cent of the Champaign County school’s 8,700 workers.
The county in March had a Stress Score of 7.92, one of the lowest in the state where the unemployment rate is approaching 10 per cent.
More than 18 per cent of the county’s jobs are government funded.
University of Illinois economist J. Fred Giertz has lived in that protective bubble for nearly 30 years, raising two children and building a career.
The recession that was cranking up when Giertz came to the campus in eastern Illinois’ corn country in 1980— widely remembered for gutting the Rust Belt — left Champaign, Urbana and other Illinois towns with heavy government employment relatively untouched, Giertz said.
“But the other places — Decatur, Danville, Rockford — were really devastated,” he said, referring to manufacturing towns that have never fully recovered.
In Los Alamos County, N.M., home to the Department of Energy’s Los Alamos National Laboratory, more than 30 per cent of the work force is employed by government, well above the national average of about 8 per cent.
Many more people work in private-sector jobs related to the weapons lab, and local unemployment hovers around 3 per cent.
The local Stress Score is 3.23, seventh lowest among the country’s more than 3,000 counties.