OPINION: The Workforce Deficit Behind the Trade Deficit

North Carolina’s prosperity depends on the global supply chains that create local jobs. 

According to a new analysis from the NC Department of Commerce, statewide exports climbed to nearly $43 billion in 2024, led by pharmaceuticals, aerospace products and machinery. Imports surpassed $87 billion, driven by strong demand for medical supplies, computer equipment and vehicles. 

This $44 million deficit shows how our fortunes rise and fall with the global economy, and even small shifts impact local jobs. 

With tariffs imposed on China and a renewed push for reshoring, the US must proactively prepare its workforce for jobs in both goods production and service-oriented manufacturing. 

Economists agree on the keys to a trade surplus nation: national saving rates, the dollar’s value, and the industries we specialize in. In each of these areas, the United States is at a disadvantage for exports. 

According to the Bureau of Economic Analysis, our net national saving rate has hovered below 5% in recent years, far below the rates over 10% seen in surplus countries like Germany and Japan. That gap means we rely on foreign capital to fund domestic investment, which keeps the dollar strong and makes our exports more expensive abroad. 

While measures such as quantitative easing could weaken the dollar and help exports, the Federal Reserve’s focus on curbing inflation has instead driven up interest rates, reinforcing the currency’s strength and, in turn, our dependence on imports. 

Meanwhile, America’s economy has tilted toward services and consumption, unlike surplus-running nations like South Korea, Germany and the Netherlands. If a trade deficit endangers the nation, so does a population living paycheck to paycheck. 

Individual financial security is tantamount to national security. While trade policies may reduce reliance on foreign supply chains, they also risk exposing a domestic workforce that is unprepared. 

Goods-related employment has historically been offset by growth in services. However, these two areas are inextricably interconnected. Automation, quality control, design and maintenance are all service-based functions tied to physical production. 

To fix the trade deficit, we must first fix the workforce deficit through real investment in people. 

Investing in workforce development necessitates an investment in training, but training alone is not sufficient. We’ve seen firsthand how essential advisors, wraparound services and practical resources can be. 

This isn’t just hypothetical; one of our participants was highly skilled with a degree and skill but needed our services for additional training and employment assistance. Years later they needed our services again to get another training and more employment assistance that finally set them on the path to realizing their full potential.

To rebuild a strong workforce, we must not only teach new skills but remove the real obstacles that block success including broken cars, unstable housing, unaffordable child care and crushing debt. 

Computer numerical control skills cannot fix these problems. A job cannot dig someone out of a financial hole overnight. The hole only deepens while they wait three weeks for their first paycheck. Without direct support, even the best training programs will fail to meaningfully build our workforce. Investment in both skills and life stability are essential if we want to rebuild our workforce.

Creating higher-wage employment opportunities for those currently living paycheck to paycheck is essential to generate the kind of national savings rate that underpins a trade surplus. The challenge is that many of the jobs that are easiest to bring back are also the lowest-paying leading to the least savings. 

This tension echoes the Federal Reserve’s dual mandate of maximizing employment while maintaining stable prices. Becoming an economy that runs a trade surplus is its own dual mandate to increase production while raising wages and productivity so people can build the savings needed to sustain the surplus. 

The pain of inflation is not a footnote to trade or national security. The cost of living is the driving factor of the workforce. People do not live to work; they work to live. If we ignore the daily realities workers face, we will fail both job seekers and employers. 

Rising costs of living and corporate pullbacks have made these challenges harder. Without higher wages, any attempt at reshoring risks creating a workforce trapped in economic precarity, perpetuating cycles of instability and turnover.

Local workforce boards are essential in bridging the divide between job seekers and employers by offering customized training, targeted support and direct employment pathways at no cost to businesses. 

Read more: OPINION: Why a ‘Good Job’ Isn’t Good Enough (2024)

We are leading the innovation needed in workforce development by solidifying direct partnerships with employers and facilitating the necessary investment in individuals that extends beyond training. 

Rebuilding American industry starts with rebuilding the workforce. A highly skilled workforce earning living wages will not only reduce our trade deficit, but also lead to a stronger, more resilient economy and a more secure nation. 

Kevin Loux, JD, is chief impact officer for Charlotte’s Workforce Development Board. He previously led systemic equity efforts in Charlotte in response to the Chetty study and built bipartisan economic development partnerships in Appalachian Kentucky. 

Akofa Dossou is a senior economist, market research lead and data strategist with over 13 years of experience in US and global economic policy. She is a senior economic analyst with Charlotte Works and co-chair of the International Economics Roundtable for the National Association for Business Economics.