North Carolina Banking on Tech Shifts Politics From South

Since taking office, President Barack Obama has been to North Carolina a dozen times -- and never set foot in South Carolina. Since clinching the Republican nomination, Mitt Romney has visited South Carolina once, while campaigning in North Carolina five times.

For generations after World War II, the politics of these neighboring states were almost identical. No more.

North Carolina, which Obama won by 14,000 votes four years ago, has left the reliably Republican fold and become a presidential campaign battleground.

South Carolina? The Democrats don’t even try.

The transformation of North Carolina from a Republican “red” state to a swing, or “purple,” state can be traced to economic development and education-policy choices the state made decades ago.

North Carolina invested in public education and research universities. Banks, business and government joined forces in the 1950s to create the Research Triangle Park, in the area between Duke University, North Carolina State University and the University of North Carolina at Chapel Hill.

Charlotte, the site of the 2012 Democratic National Convention and only about 20 minutes up Interstate 77 from the South Carolina border, has become a financial center, in part because of state laws that made it easier for banks to expand.

Tempering Politics

“In North Carolina, you had a much stronger, much more diverse business climate -- and business leaders in this state largely have tempered politics,” said Bob Geolas, president and chief executive officer of the Research Triangle Foundation.

While South Carolina’s policies limited cities’ growth, North Carolina allowed more urbanization. That also fed business growth and drew young people, Hispanics, blacks, and white liberals and moderates. Hispanics are 8.6 percent of North Carolina’s population, 4.7 percent of South Carolina’s.

“The heavier, more robust metropolitanization of North Carolina has made the state purple, more than states like South Carolina and Mississippi and Louisiana,” said Ferrel Guillory, director of the Program on Public Life at the University of North Carolina at Chapel Hill.

The town of Cary in the Research Triangle area illustrates the changes. While only North Carolina’s seventh-largest municipality, it’s bigger than any city in South Carolina. The population tripled since 1990, to 135,234 in 2010.

Relocated Yankees

Cary, where about two-thirds of residents have a college or advanced degree and the median household income is about twice the national average, is a magnet for ambitious out-of-staters.

A local joke is that its name is an acronym for Containment Area for Relocated Yankees.

The city is part of North Carolina’s fourth congressional district, represented in Congress by Democrat David Price. The district backed Obama in 2008 with 63 percent of the vote.

Jim Goodnight, chief executive officer of Cary-based SAS Institute Inc., which employs more than 13,000 people worldwide and 4,900 in Cary, backs Romney even as SAS and other employers have attracted thousands of Democrats and independents.

“North Carolina’s always put a big emphasis on the university system” and that’s meant “plenty of talent in the area,” Goodnight said. “It’s a community, a region, we’ve never had trouble hiring people in.”

Only Carter

North Carolina’s economic and social changes have driven its politics.

Both Carolinas were dominated until the early 1960s by conservative Democrats. From 1968 through 2004 they voted in lockstep for Republican presidential candidates -- except when they both went for Southern Democrat Jimmy Carter in the post- Watergate election of 1976.

Both states by the early 1960s had elected progressive Democrats as governor, Fritz Hollings in South Carolina and Terry Sanford in North Carolina. At the same time, both were represented in Washington for decades by two of the most conservative U.S. senators, Republicans Strom Thurmond of South Carolina and Jesse Helms of North Carolina.

Both states have grown. In 1950, South Carolina had 2.1 million residents and North Carolina 4.1 million. Today, South Carolina has 4.7 million. North Carolina has 9.7 million.

Growth hasn’t generated broad prosperity. They still have deep strains of poverty along with centers of wealth. And both have grappled with the loss of jobs in textiles, tobacco, farming and furniture.

Hanging On

While North Carolina invested in higher education, South Carolina “grew its textile industry and hung on to that very tightly, even when the handwriting was kind of on the wall,” said Jeff Allen, interim director of the Strom Thurmond Institute of Government and Public Affairs at Clemson University in South Carolina.

By the 1980s, when “South Carolina was looking and saying, ‘How do we attract high-tech workers?’ there wasn’t the political will” to make the investments needed, Geolas said.

Today, North Carolina is home to three top-30 universities in the U.S. News & World Report 2012 rankings -- Duke, Wake Forest and the University of North Carolina at Chapel Hill. North Carolina’s 14 Fortune 500 companies include Bank of America Corp., Duke Energy Corp. and Lowe’s Cos.

South Carolina has one Fortune 500 company, paper producer Domtar Corp. (UFS), and no schools in that top 30.

North Carolina last year was ranked the third-best state for business and careers by Forbes magazine. South Carolina was 28th.

Boeing Arrives

In recent years, South Carolina has used its anti-union right-to-work laws and tax incentives to attract factories, from German automaker Bayerische Motoren Werke AG to French tiremaker Michelin & Cie. (ML) and U.S. aerospace giant Boeing Co. (BA) Boeing’s new $750 million Dreamliner aircraft plant in North Charleston is expected to create 3,800 jobs over seven years. BMW, which opened its first U.S. plant in Greer in 1994, produced 276,000 vehicles last year and employed more than 7,000 people.

Today, the Bloomberg State Equity Index has 141 members in North Carolina and 46 in South Carolina.

Still, the Bloomberg Economic Evaluation of States Index shows North Carolina’s economy has fared worse since 2009. North Carolina ranked 44th on the BEES Index, while South Carolina ranked 36th.

$20 an Hour

Yet South Carolina’s manufacturing jobs offer lower income than the employment in North Carolina’s Research Triangle.

Shelly Click, 24, a college graduate, and her husband, Brent, 22, work for a military contractor in Greenville. Combined they earn $20 an hour and no benefits.

Manufacturing has been “really important” for jobs, said Samone Golden, 20, who works at BMW as a paid intern as part of her machine-tool technology program at Greenville Technical College.

Golden, who is black, is backing Obama. The Clicks, who are white, said they’ll vote for Romney because he has more business experience and they aren’t satisfied with the economy.

To contact the reporter on this story: Margaret Talev in Washington at mtalev@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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