The Rise of “Education for Economic Growth” in North Carolina and the U.S. South, 1977–1984

William D. Goldsmith

This paper examines how North Carolina state economic policy moved from place-centered “balanced growth” to a people-centric emphasis on “education for economic growth” during Gov. James B. Hunt’s first two terms. The imperative to improve education was at the core of the “New Economy” narrative that so captured moderate and liberal southern policymakers and politicians in the 1980s onward, a narrative that argued that the U.S. could trade low-wage, low-skill industrial work for high-tech, high-wage “knowledge” jobs. In North Carolina, the New Economy narrative had its biggest proponents among Democrats, many of whom also carried a strong commitment to economic equality and social justice. Yet the focus on a high-tech, high-wage economy has led to unintended economic losses for North Carolina, especially its rural areas, where the offshoring of lower-wage manufacturing has proved economically devastating. One irony is that policymakers pushing toward the New Economy narrative were among those most attuned to the equity issues of rural development. They sought to break rural communities from their dependency on low-skill manufacturing, and they used the effects of early globalization on North Carolina’s traditional industries (textiles, apparel, and furniture) to promote the state’s shift toward education-based economic growth.