The Economic and Social
Impact of Job Loss in Robeson County, North Carolina
University of North Carolina
Center for Community Action
|As a result of manufacturing job loss from Robeson County,
NC 1993-2003, over $713 million in jobs, income, and business taxes were
United States manufacturing has undergone
intensive economic restructuring over the last thirty years.
This has had a profound effect on rural areas, especially in the Southeast
where textile, apparel, and furniture manufacturing have been based.
North Carolina, in particular, has been dependent on traditional manufacturing
supplying most of rural counties’ employment (Scott 2001).
Throughout the 20th century, manufacturing
jobs provided economic stability for individuals and communities in North
Carolina. Yet since the mid-1990s, this stability has eroded.
With the implementation of General Agreement on Tariffs and Trade (GATT)
and the North American Free Trade Agreement (NAFTA), the impact has meant
displacement for thousands of North Carolina rural workers. North
Carolina job loss between 1994 and 2000 reached more than 100,000 (The
Rural Center 2002).
Rural areas have been the hardest hit.
Robeson County, North Carolina has felt the brunt of economic restructuring.
Between 1997 and 2000, Robeson County lost 41% of its manufacturing jobs
(Estes, Schweke, and Lawrence, 2002). This predominantly rural county
has seen significant increases in unemployment, bankruptcies, and substantial
reductions in household income and business taxes.
The impact of job loss is far-reaching:
individuals, families and the entire community have all been negatively
touched. Distress extends not only from the loss of jobs, but also from
the more profound loss of an entire way of life.
Research on the social and economic
impact of job loss in Robeson County, N.C. is one of the main goals of
the Jobs For the Future Project of the Center For Community Action.
The Jobs For the Future Project was
created in 2002 in order to develop comprehensive strategies of economic
relief and reconstruction in Robeson County, N.C.
Along with formal and participatory
research, the Jobs For the Future Project utilizes the following
strategies in its program: community organization, engagement, and problem-solving;
multi-sector collaboration; faith-based involvement; service learning;
program and proposal development and support; and policy development and
The project’s research design and its
comprehensive approach to development provide a model for other rural communities
across N.C. and the nation that are facing significant economic and social
challenges as those in Robeson County, N.C.
This report provides preliminary research
findings. A more extensive research report will be published in October
Policy and program recommendations
for rural economic relief and reconstruction are also available through
the Jobs For The Future Project.
Robeson County, N.C.
Robeson County, N.C. is a large,
rural county located in the Coastal Plains of Southeastern N.C. Based on
the 2000 Census, its multiracial population of 123,339 is 38 Native American,
32% European American, 25% African American, and 5% Latino/Hispanic.
The Asian population is less than 1%. Robeson County is home to the
Lumbee, the largest Native American tribe east of the Mississippi River.
Robeson County’s highly diverse population
earns it the distinction of being the most ethnically diverse rural county
in the U.S. Its present poverty rate of 24% and illiteracy rate of 38%
are indicators of low economic and social well being that have persisted
While the people of Robeson County
have made major advancements in improving political governance and equitable
racial representation, the county’s contrasting decline in economic and
social conditions reveals the significant nature of its present and most
serious economic and social crisis in the last 75 years.
On the one hand, Robeson County has
advanced further in the past 20 years than most, if not all, N.C. counties
in achieving racial inclusion and representation in all levels of government.
On the other hand, its economic and social conditions have significantly
declined in the last 10 years, more than most, if not all, N.C. counties.
Because of both its racial diversity
and massive loss of jobs, Robeson County is a microcosm of the present
experience of many U.S. communities and counties, particularly across rural
Ten-Year Change in Robeson County
Manufacturing, 1993 to 2003
Based on NC Employment Security Commission
data, Robeson County has lost approximately 8,708 manufacturing jobs since
1993. The peak years of plant closures in Robeson County were 1998
to 2003, with nine plant closings reported in 2003. In 1993, manufacturing
accounted for 31% of all jobs in the county.
Ten years later, manufacturing accounts
for only18% of jobs in Robeson County. Figure 1., below, shows the
percent of jobs in manufacturing and the decline in Robeson County’s manufacturing
jobs in the past 13 years.
Percentage of Jobs in Manufacturing, Robeson County,
Source: US Census Data 1990-2003.
Figure 2., below, captures the decline
in manufacturing employment and manufacturing payroll in Robeson County.
Manufacturing work declined significantly from 17,430 in 1993 to 6,832
in 2003, with a corresponding decline in manufacturing payroll.
Number of Manufacturing Employees and Manufacturing Payroll,
Robeson County, NC, 1994-2003.
Source: County Business Patterns 1994-2003.
Economic Impact of Manufacturing
“As I said right now, our organization is
running a deficit, in our budget, we’re providing more services to our
clients than we are receiving reimbursement for. So, what we’re trying
to do right now is to see if there are any additional grant dollars out
there because our county has been so hard hit by the textile losses.
We have to see if there are any additional resources out there we can tap
into, actual dollars that we can tap into to help offset the deficit we’re
running right now because of the services that we’re providing the patients.”
Robeson County hospital administrator
The impact of manufacturing job
loss is not isolated to the individual worker or the individual plant closing.
Workers’ salaries flow back into the community when they purchase goods
and services. Similarly, a manufacturing plant uses utilities and
services from the community, and generates considerable property tax for
the county. When these salaries and taxes are gone, the ripple effect
Ripple Effect of Job Loss
To understand the ripple effect, we
examined the loss of manufacturing activity and employment in Robeson County
over a ten-year period, from 1993 to 2003. We wanted to understand
the regional economic impact of the decline in manufacturing activities
on regional employment, household income, and indirect business taxes.
Using economic input-output model analysis
(IMPLAN), we estimate that the loss of 8,708 manufacturing jobs in Robeson
County resulted in a total reduction in regional employment of 18,345 jobs
over ten years. These employment impacts refer to the total (net)
employment effects of the loss of both part-time and full-time jobs.
We looked at: initial manufacturing layoffs, and all “multiplier effects”--
including both indirect “ripple” effects and induced, household-spending
“feedback” effects. Figure 3 below shows the ‘multiplier effect’
of losing 8,708 jobs from 1993-2003. The net result is a ‘ripple
effect’ of 18,345 jobs lost.
Employment Impacts from Manufacturing Job Loss in Robeson
County, NC, 1993-2003.
Source: Dumas 2004
Ripple Effect on Loss of
By 2004, regional household income
had been reduced by
$674 million per year due to the manufacturing
job loss in Robeson County. The region is defined in this study as
the adjacent commuting counties (Scotland, Hoke, Columbus, Bladen, Cumberland
and Dillon, SC). Household income is defined here as the total
of employee compensation (wages, salaries, insurance and retirement benefits),
proprietors’ income (self-employment income including private business
owners, doctors, lawyers, etc.) and “other property type income” (property
rents, corporate dividend payments and retained earnings, and royalties).
The reported household income impacts
are total (net) household income impacts. These include the initial
reductions in household income that result directly from manufacturing
layoffs. They also take account of all “multiplier effects” reductions
in household income-- including both indirect, “ripple” effects and induced,
household-spending “feedback” effects.
Household Income Impacts Due to Manufacturing Job Loss
in Robeson County Over 10 Years.
Source: Dumas 2004. Income loss over ten
years from 2004 should jobs not be replaced.
Ripple Effect on Loss of Indirect
By 2004 regional governments were collecting
$39 million less per year in indirect business taxes due to the manufacturing
job loss in Robeson County.
Indirect business tax (IBT) impacts
include sales taxes, business taxes (but not residential property taxes),
federal customs duties and excise taxes, severance taxes, and business
motor vehicle licenses fees (but not personal motor vehicle license fees).
IBT do not include federal income taxes,
corporate profits taxes, estate taxes, gift taxes or Social Security/Medicare
taxes. IBT do not include state income taxes, corporate profit taxes,
estate taxes, gift taxes, fish/game license fees, or state social insurance
The reported IBT impacts are total
(net) impacts. These refer to the initial reductions in IBT resulting
directly from manufacturing layoffs, and all “multiplier effect” reductions
in IBT, including both indirect, “ripple” effects and induced household-spending
“feedback” effects. Figure 5. below shows the ripple effect of loss
of indirect business taxes to Robeson County from 1993-2003.
Annual Reduction in Regional Business Taxes Paid Due
to Job Loss in Robeson County from 2004
Forward Should Jobs Not Be Replaced.
Source: Dumas 2004
What Happens When Jobs Disappear?
Job loss affects not only the immediate
worker who loses their job, but other workers in the community. Figure
6., below, gives a sample of the ripple effect in Robeson County when manufacturing
Sample of Ripple Effects on Other Industries of Manufacturing
Source: Dumas 2004. Loss estimated using IMPLAN
Sample of Trade-Related Job Losses 1993-2003
Lost Income in Dollars
Eating and Drinking
US Postal Service
Due to manufacturing job losses from
1993-2003, Figure 6 demonstrates that banking jobs were also affected with
a net loss of 148 jobs and a $-13,680,000 in income. The US Postal
Service was affected with a net loss of 51 jobs and income loss of $-2,349,769.
Hospital jobs, eating and drinking establishment jobs were also affected,
as were many other jobs in the county. The ripple effect in an area
when work disappears is substantial.
Figure 7 shows the total loss of jobs,
income and indirect business taxes from the disappearance of manufacturing
jobs from Robeson County in a 10-year period.
Total Loss of Jobs, Income and Indirect Business Taxes
from the Disappearance of Manufacturing Jobs in Robeson County 1993-2003.
Source: Dumas 2004
Lost Business Taxes
Total Per Year $ Loss to Robeson County from 1993-2003
Unemployment Rates and Unemployment
“Well, I was drawing unemployment up until
the first of December, and all unemployment was cut out, no more extensions
or whatever, and I’ve had not one dime coming in since then. Not
one thing, I’ve been staying at mama’s, taking care of her, trying to come
to school, taking my grandchildren to school, going back to get them. It’s
just been constant schedule every day. But it’s took a toll on my
health. And, I’ve gotten to the point where I’ve just really
been really nervous and worried because I didn’t know where I was
going to get another job to be able to, there’s taxes, there’s um, I can’t
buy food…, I’ve gained so much weight from my health problems and now I
can’t even afford my medicine. I can’t afford to go to the doctor.
57 year-old displaced worker
Annual unemployment rates have steadily
increased for the state and Robeson County since 1994, with peak years
of 2001 and 2002 corresponding to increased plant closings. The county’s
rates have remained double that of the state’s unemployment level.
North Carolina and Robeson County Unemployment Rates,
Source: North Carolina Employment Security Commission
According to data collected in 2002
by the NC Rural Economic Development Center, in 1999 North Carolina had
the 12th lowest unemployment rate in the United States. However,
by December 2001, North Carolina was 46th out of the 50 states in terms
of unemployment—only four states had more unemployment than ours.
The state’s unemployment rate had the
greatest increase of any state in the nation from 2000-2001. North
Carolina lost more textile and apparel jobs during this time than any other
state in the country. Sixty-nine percent (69%) of all textile layoffs
in North Carolina occurred in rural counties (The Rural Center, 2002).
Unemployment and Race
One of the key findings from the literature
on economic restructuring is that the process of deindustrialization has
differential effects on various categories of workers (Johnson & Oliver,
1991). Job loss in manufacturing has had dramatic effects on rural
workers, but particularly rural black workers. In Robeson County,
annual unemployment rates have increased for all categories of workers
between 1990 and 2000, from 7.6% to 9.1%.
African American unemployment has remained
almost three times higher than white unemployment since 1990.
Latino unemployment levels have increased
six times since 1990, and Latino workers are twice as likely to be unemployed
than white workers.
Native American unemployment minimally
decreased to 9% between 1990 – 2000, a decrease of .3 of 1% . Many of the
manufacturing plants that closed from 2000-2003 employed a large Native
American workforce, also increasing the Native America unemployment rate
in the county.
Annual Unemployment Rates in Robeson County by Race,
1990 and 2000.
Source: US Census
Annual Unemployment Rates Robeson County
In January 2002, unemployment payments
reached a record high for the state of North Carolina , nearly twice the
amount paid in 2000 (North Carolina Budget and Tax Center). In Robeson
County, unemployment insurance payments nearly doubled between 2000 and
2001 (North Carolina Budget and Tax Center).
Annual Unemployment Insurance to Robeson County Residents,
Source: U.S. Bureau of Economic Analysis 1993-2001.
The drain on the Unemployment Insurance
Fund (UIF) has intensified. According to the NC Budget and Tax Center
Reports (2003) the tax cuts made in the 1990s, coupled with the record-setting
benefit claims of 2001-2003, have dangerously reduced UIF. In June
2003, North Carolina had a negative UIF balance. By October 2003,
North Carolina was forced to acquire UI Trust Fund loans to continue benefits
(Employment Development Corporation 2003). According to the Center
on Budget and Policy Priorities (Jordan 2003), “the number of workers exhausting
their regular benefits between March and August 2002 was 225 percent larger
— or more than triple — the number exhausting benefits in the comparable
six months of 2000.”
Per capita income for the Robeson County
in 2000 was $13,223. The average household income in Robeson County
in 2000 was $36,579, as compared to the state’s average of $51,225.
When we examine household income closely, we find that 37% of Robeson County
households in 2000 had incomes below $20,000 a year; and over half (52%)
of Robeson County households earned incomes below $30,000 a year.
Figure 11., below, provides average household incomes by race in Robeson
County showing African American and Native American household incomes significantly
lower than whites.
Mean Household Income by Race, Robeson County, 2000.
Source: U.S. Census 2000.
According to the Federal Poverty Level,
24% of Robeson County households live in poverty (Census 2000). Critics
of the federal poverty line are of the opinion that this measure is outdated.
Today, rising costs in many areas absorb
larger portions of families' budgets. These include: housing, transportation,
health insurance, medical and childcare costs. Social scientists
argue that if current social and economic considerations were utilized
in formulating the poverty measure, the official poverty line would be
at least 50% higher than the current measure.
According to the North Carolina Justice
and Community Development Center Report Working Hard is Still Not Enough
(2003) a more realistic gauge of poverty is the Living Income Standard
(LIS). LIS is a basic family income criterion for estimating the
standard of living needed by average families in North Carolina in order
to meet their basic needs. It covers seven basic items: housing
and utilities; food; health care; transportation; miscellaneous expenses
like clothing and cleaning products; and taxes.
LIS does not include: money for
savings; consumer, lending company, or mortgage loans; meals out, entertainment,
birthday presents, videos, etc. Therefore, the Living Income Standard
is a very conservative, low indicator of the actual cost that is needed
for a sensible standard of living. Using the LIS measure, 45% of
families live in poverty.
The ripple effect of job loss on a
community can be seen in the increase in personal bankruptcies. As
shown in Figure 12, personal bankruptcies have nearly quadrupled in the
region since 1994.
Personal Bankruptcies Filed in U.S. Eastern NC District
Source: U.S. Eastern North Carolina District Court.
In Robeson County (Figure 13.), bankruptcies
steadily increased during the economic downturn from 1999 to 2002.
All Bankruptcies, U.S. District Court, Robeson County,
Source: U.S . Eastern North Carolina District Court.
Older Workers Are Disadvantaged
|‘I am 45 and I never thought of myself as old.
But now that I’m trying to find work, I feel very old.”
Rural displaced workers are generally
older workers with less education who are tied to home ownership, making
it difficult to migrate out of the county for work. Thirty percent
(30%) of Robeson County’s population is 35-54 years old. Half (50%)
of employed workers are in the 35-54 age category. Research on displaced
workers indicates that older workers endure greater hardships with longer
periods of unemployment than younger workers (Moore, 1990; Leana and Feldman,
1992; Kodrzycki, 1996). According to the NC Rural Center (2002),
older workers are considerably less likely to be reemployed within one
to two years of being laid off. And compared to younger workers,
older workers’ income is more likely to decline. Many of these workers
do not have a high school diploma and are faced with returning to school
and then finding training for new skills.
| “Sometimes it’s kinda embarrassing for me, I call
my grandson, he’ll be in fourth grade. In the fourth, you know, they’ve
already learned just a little bit of algebra, well that’s what I’m
in algebra now in high school, I never took it. During time I was
going to school, so it’s all new to me. On the equations and, with
the parentheses you know, and I was at home last night and I was trying
to work them problems out and I said, I just can’t get it. So I go
over to my daughter’s house toting my school books, it was like, my grandchildren
looking at me, here I am 47 years old, coming in the door with school books
Education and Knowledge-Based
| “We still have a significant number of our kids
who are not graduating from high school. We still have a significant
number of our kids dropping out of college and not finishing their education.
As long as we continue this trend, we’re not going to be able to tap into
computer-based, high-tech jobs or high-tech companies are not going to
be moving into this area because we don’t have a workforce that’s prepared.”
Robeson County agency worker
Previous research on displaced workers
indicates that college educated workers are more likely to be reemployed
compared to workers with a high school diploma. College educated
workers also have shorter duration of unemployment periods after displacement
(Moore, 1990; Keltzer, 1998).
Rural North Carolina workers often
have not completed their high school degree, and fewer still have associate
or bachelor degree. In Robeson County, the public school annual dropout
rate has increased from 9% in 1990 to 11% in 2000. Sixty-five percent
of the population has a high school diploma and 11% hold a bachelor’s degree
or higher. Displaced workers face the dilemma of having little educational
attainment when work today is increasingly knowledge-based.
When Family Members Lose Jobs
| “We have family members, people, employees of the
organization whose families have worked in the textile industries that
have lost their jobs. So we actually have families or people working
with us who are at the poverty level because they are having to support
family members who are out of work… Every time somebody loses their job,
they’re losing health insurance for their family. If they have
to choose between going to the doctor or putting food on the table they’re
going to put food on the table versus going to the doctor. Families
need steady work—job-- and unfortunately that’s something my company can’t
provide for them. But I think it’s something you know-- but that’s
what they need. They need steady work. They need a paycheck
coming into them.”
Robeson County agency worker
A survey by the North Carolina State
Center for Health Statistics in 2002 found that of the sample surveyed
in Robeson County, 30% did not have access to health insurance.
As workers are laid off, more and more families are uninsured.
The infant mortality rate in Robeson
County remains high, and has increased since 1990 from 12.1 to 14% in 2000.
Children are the category of people
at greatest risk of being in poverty. In Robeson County in 2000,
31% of children under 18 lived in poverty. Considering race, 45%
of African American children live in poverty, 29% Latino children live
in poverty, 26% Native American children and 19% white children live in
Figure 14., below, provides trends
in child well-being for children under 18 in Robeson County. From
1994 to 2001 free-lunch, foodstamps and Medicaid child recipients have
Trends in Child Well-Being Robeson County.
Source: North Carolina Child Advocacy Institute
‘Child’ refers to people age 0-17
Other Indicators of Distress
| “Because we are not honest about what is going
on. You know, if it’s NAFTA--which is the national whatever, that policy
that they passed which allows companies to move over to other countries
or whatever-- I don’t think people were really and truly honest about the
impact it was going to have on our country, and it’s had a very negative
Robeson County agency worker
Figure 15., below, shows the increase in annual
income-maintenance benefits payments to individuals by $28 million from
1994 to 2001.
Annual Income Maintenance Payments to Individuals in
Robeson County, 1994-2001.
Source: U.S. Bureau Economic Analysis. This data
represents payments that include SSI, AFDC, food stamp payments, general
assistance, foster home care and adoption assistance, earned income tax
credit, and energy assistance.
Government payment to individuals in Robeson
County doubled from 1994 to 2001 (Figure 16.).
Government Payments to Individuals in Robeson County,
Source: U.S. Bureau of Economic Analysis.
This data represents estimates for government payments to individuals,
which includes medical payments, AFDC payments, Food Stamp payments, general
assistance, income tax credits, veterans benefit payments, federal educational/training
payments, Bureau of Indian Affairs payments, and disaster relief payments.
About half the payments are for medical care and a quarter goes for retirement/disability
| “And I’ve begged, I’ve totally begged, you know,
for help to get me straightened out so I could go back to work. Find
a job and go back to work, but everywhere I went I’ve just been turned
away. We can’t help you. And I said, you know, it’s a shame,
I’ve worked all my life. Now I need some help and I can’t get it.”
The preliminary research findings presented
in this research paper demonstrate the negative effect of job loss on one
rural county - Robeson County, N.C - that has been significantly negatively
impacted by federal trade policies. Both the research model and findings
are applicable to a significant number of rural counties across the United
States that have experienced massive job loss over the past 10 years.
The data collected and analyzed in
the research report provides the basis and framework for:
valid and reliable research and findings that quantify the
total amount of jobs and income that has vanished on a county-level as
a result of massive job loss;
more research on the local, state, and national impact of
massive job loss in rural America and on effective program and policy models
for economic recovery;
an increase in responsible and creative policy discussion,
deliberation, and implementation on the national, state, and local level
regarding multiple strategies for economic renewal;
development of a massive program of federal, state, and private
assistance and support to rebuild and reconstruct the economies of rural,
Robeson County, rural N.C., and rural America.
|“Federal policy that lowered trade barriers with countries
around the world led to an exodus of manufacturers to developing countries
where costs are lower and labor and environmental laws are less stringent.”
N.C. Rural Economic Development Center Report on Rural
Since federal policy is a major cause
of the problem of massive job loss, more responsible and constructive national
policy must be a major part of its solution.
There is rising concern regarding the
lack of a federal policy focus on domestic needs and concerns that address
the critical issues facing our nation, including rising unemployment, joblessness,
poverty, and health care costs, particularly in rural America.
The release of October 2004 report
will coincide with the research education and training component of the
National Conference on Job Loss and Recovery that will be held in Lumberton,
N.C. at the Robeson County Agricultural Center on Friday and Saturday,
October 1-2, 2004.
Dumas, C. 2004. “The Economic Impact of Manufacturing
Activity Decline in Robeson County, NC 1993-2003.” Research Report,
Center for Community Action.
Estes, C., Schweke, W. and Lawrence, S. 2003. “Dislocated
Workers in North Carolina, Aiding Their Transition to Good Jobs,” North
Carolina Justice and Community Development Center.
Employment Development Corporation. 2003. Unemployment
Insurance Fund Forecast. State of California.
Jordan, E. 2003. BTC Report, June 30.
Keltzer, L. 1998. "Job Displacement" Journal of Economic
Kodryzcki, A. 1996. "Laid Off Workers in a Time
of Structural Change" New England Economic Review. July: 3-26.
Leana, Carrie and Danie Feldman. 1992. Coping with Job
Loss. New York: Lexington Books.
Moore, Thomas. 1990. "The Nature and Unequal Incidence
of Job Displacement Costs." Social Problems 37:230-242.
The Rural Center. 2003. Facing the Facts. Winter
Schmidt, S. and Jordan, E. 2003. Working Hard is Still
Not Enough. Raleigh: North Carolina Justice and Community Development
Funding for research on this project was provided in part
The American Sociological Association’s Sydney S. Spivack
Program in Applied Social Science Research and Social Policy Community
Action Research Award.
Ford Foundation and the Southern Funding Collaboration
Good Work, Inc.
Mary Reynolds Babcock Foundation
North Carolina Council of Churches
North Carolina Union Community Fund of the AFL-CIO
Z. Smith Reynolds Foundation