The North Carolina Capitol in Raleigh, which formerly housed the General Assembly. (Photo: Brandon Kingdollar/NC Newsline)
North Carolina’s economy has seen explosive growth since 1970, rising to eleventh in gross domestic product in the nation. But according to a new study from the left-leaning think tank Urban Institute, the state’s income growth has lagged behind the rest of the country.
Released on Tuesday, the study found that the median household income in North Carolina rose from $56,952 in 1970 to $70,804 in 2023, adjusted for inflation, according to Census Bureau data. That represents a 24.3% increase, placing North Carolina 40th in the country in income growth — behind all of its neighbors.
“North Carolina kept running and made real gains, but other states sprinted ahead faster,” said researcher Brady Meixell, who co-led the study. “They’re still doing decent on attracting and growing and retaining talent, so it’s really about connecting that talent to higher-wage jobs.”
North Carolina led the region in household income in 1970, ahead of neighbors South Carolina, Georgia, Virginia and Tennessee, and 25th in the country overall. As of 2023, it had fallen to 34th in the country, lagging behind the growth of all four states. It now has a lower median household income than Georgia and Virginia.
Nowhere is there a starker contrast than North Carolina’s northern neighbor, Virginia, where median household income has skyrocketed since 1970 — increasing by 60.1% from $56,161 to $89,931 — despite a lower GDP than North Carolina.
Meixell said North Carolina’s relatively lower growth is somewhat surprising, given that the state performed well in two important metrics correlated with income growth: college-educated and foreign-born population growth. North Carolina ranked 13th in the growth of the former and 14th in the growth of the latter.
“A state like North Carolina made strong gains in education and immigration, which are two of the biggest predictors of income growth that we saw, but only modest income gains compared to other states in the country,” Meixell said. “Population growth alone is not going to deliver that prosperity. It’s a need to really think through the economic mix of the state.”
The period spans more than 30 years of Democratic control of the governorship and General Assembly and more than a decade of Republican control of each. It encompasses both Democratic promises to grow income through investments in education and a GOP plan to grow income by slashing taxes.
The clearest impact in the data set is from the 2008 financial crisis. From 1970 to 2000, median household income in North Carolina grew by 22% to $69,356. But by 2010, most of those gains were wiped out, with the median household income falling to $59,790, only 5% above its 1970 median — making it 45th in the U.S. in income growth by that point. Only in the years since have incomes in the state rebounded.
“We keep hearing this Sun Belt story about warm weather and low taxes driving growth,” Meixell said. “Those advantages alone aren’t really enough to guarantee rising income.”
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