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The John M. Belk Endowment and Durham-based nonprofit MDC have partnered to examine the patterns of economic mobility and educational progress in North Carolina to determine who is being successfully prepared for entry and success in the most economically rewarding sectors of the state’s economy. The report, “North Carolina’s Economic Imperative: Building an Infrastructure of Opportunity,” provides data and analysis on these trends and includes a close look at eight localities across the state. This week, EducationNC will be featuring the profiles of five of those communities.

(Photo courtesy of MDC)
(Photo courtesy of MDC)

No one can deny the splendor of fall in the Western North Carolina mountains, nor the dominance of Asheville in what most people think of as “Western North Carolina.” But beyond Buncombe County, you’ll find Jackson, Macon, and Swain counties, what Ryan Sherby, executive director of the Southwestern Commission, the region’s council of government, describes as the “heart of the region.” These three counties hold more than fall color: Jackson is home to Western Carolina University, the region’s only public comprehensive university; Macon is the region’s gateway to Atlanta; and Swain shares the Great Smoky Mountains National Park with Sevier County, Tennessee. And, particularly unique to the region, there’s the sovereign Qualla Boundary, home to the Eastern Band of the Cherokee Nation. The three-county region has fashioned tourism as an economic powerhouse, accounting for 5,000 jobs and more than $100 million in payroll.1 Yet many of these tourism jobs do not pay a family-supporting wage, so a key challenge for community leaders is diversifying and expanding the economy so that it works for all of their residents.

Significant tourism in the region began in the 1930s with the creation of the Great Smoky Mountains National Park. But the economy isn’t just tourism. Throughout the 1950s, economic development in Western North Carolina was based on natural resources (timber, agriculture, and mining) and low-wage, low-skill factory jobs. In the 1960s and 1970s, Western North Carolina benefited from a hot housing market, a good economy, and high land prices. Residents found jobs in manufacturing and farming and, when people from all over the East Coast began to build second homes in the North Carolina mountains, construction workers from all over the South moved to the region to find work.2 Construction remained a driving force in the region through the 2000s. Today, between 70 and 80 percent of houses in Swain, Jackson, and Macon counties are seasonal homes.3

The gaming industry was a real game-changer for the Tribe and the regional economy. In 1988, the Indian Gaming Regulatory Act gave tribes all over the United States the right to open casinos. The Eastern Band did not move immediately; they waited to see how other tribes fared first. Joyce Dugan, principal chief of the Eastern Band from 1995 to 1999 says, “There were a lot of concerns about how the casino would change the community and our people.” In 1997, they put those fears aside and joined the gaming industry, changing the Tribe forever. That first year, they cleared $50 million after expenses.

(Graphic courtesy of MDC)
(Graphic courtesy of MDC)

Things remained stable in the region through the first decade of the 2000s. “Then, in 2009, it was like someone turned the light off,” says Tommy Jenkins, economic development director for Macon County. Between 2001 and 2010, Swain, Jackson, and Macon counties lost half of their construction and manufacturing jobs and farm employment dropped by 20 percent.4 Other sectors also experienced significant declines in jobs, including retail and transportation.

(Graphic courtesy of MDC)
(Graphic courtesy of MDC)

“After the recession, we became lean again,” says Jenkins. Many of the people who moved to Western North Carolina to join the thriving construction economy ended up leaving during the economic downturn. Between 2000 and 2010, the Western North Carolina region’s population declined by nearly 11 percent.5 Now, almost five years after the recession, leaders are reassessing the region’s economic prospects. “Things are starting to look up,” says Sherby. “We are not getting such a huge influx of people moving here anymore. That type of growth was unsustainable. We are right-sizing.”

(Graphic courtesy of MDC)
(Graphic courtesy of MDC)

This “right-sized” region includes disparate populations. Melissa Wargo, chief of staff at Western Carolina University (WCU), sees five economic groups in the area:

  • The mountain poor families: community members dealing with generations of poverty and not a lot of opportunity for upward mobility.
  • The Cherokee Nation: citizens making inroads in prosperity, especially with gaming investments, but still a high poverty rate and incidence of health issues.
  • The traditional middle class: mid-level professionals, like teachers, nurses, public services workers, and university staff.
  • High-wealth: typically living in affluent pockets, like the Cashiers/Highlands areas of southern Jackson and Macon counties; this group includes those with second and third homes in the region.
  • The entrepreneurials: people who move to the region for quality of life considerations. As Wargo says, these are “young people who don’t want to be tied to an office. They want to run their own businesses.”

A look at housing in Swain, Jackson, and Macon counties shows the distinctions between poverty and wealth in the region. While the majority of homes in the three-county region are for seasonal use, over half of the region’s residents cannot support basic rent in their region. According to a 2012 report studying affordable housing, “the average renter in the region needs an additional $191 in income each month to afford a two-bedroom fair market rent apartment. This is not sustainable, and with rising energy costs linked to utilities and transportation, the situation is becoming more untenable.”6

The Casino Impact

Harrah’s Cherokee Hotel and Casino created an overflow of economic opportunities for the region. In 2009, the economic impact on Jackson and Swain counties was estimated to be $300 million; more than three million people visit the casino each year.7 Hotels and restaurants that were once only open in the summer and fall began to stay open year-round. Before gaming, unemployment in the region would reach 17 percent in the winter. Now, the winter unemployment rate is on par with the state, around 5 percent. In 2013, casino revenues reached over $500 million and employed more than 3,000 people.8

Profits from the casino are shared with the 15,000-member Eastern Band community in two ways. The first is through the Cherokee Preservation Foundation. For tribal-run casinos in many other states, a percentage of profits are required to be shared with the state government. But when former North Carolina Governor Jim Hunt gave approval for the casino development, he decided to do something different. While some profits still go to the state, “Governor Hunt wanted to make sure that most of the funds went to the Qualla Boundary and this region,” says Dan Martin, a program officer at the Cherokee Preservation Foundation. “So, the casino funds come to our foundation to fund grants in cultural preservation, economic and workforce development, and the environment.”

Profits are also shared with tribal members through per capita payments. Each year, members of the Eastern Band of the Cherokee Nation receive two checks, based on casino profits. For children, per capita payments are held until they turn 18 and then, after some financial planning, they are given a lump sum payment. In 2015, the lump sum payment was almost $175,000.

While the mountains bring tourists to the area, and with them those 5,000 tourism jobs, they hinder other industries from moving to the region. Many Southern communities try to recruit big automotive or other advanced manufacturing companies to their regions. “But with scarce flat land, we have to think strategically about how we bring in new business,” says Ryan Sherby of the Southwestern Commission.

Just looking at a map of North Carolina does not provide a clear picture of how isolated this region is from the rest of the state. “We are closer to five other state capitals than we are to Raleigh,” says Melissa Wargo, chief of staff at Western Carolina University. “There is very little connection between this part of the state and the rest of the state. That colors how people draw business and industry.” Tommy Jenkins agrees: “We see Greenville-Spartanburg, South Carolina, and Atlanta, Georgia, as our markets.”

“We are closer to five other state capitals than we are to Raleigh. There is very little connection between this part of the state and the rest of the state. That colors how people draw business and industry.” — Melissa Wargo, chief of staff, Western Carolina University

Along with declining population growth, the region is challenged by high poverty rates. Between 2000 and 2010, poverty rates increased by 7 percent in Macon and 4 percent in Jackson, while remaining fairly stable in Swain; and all three counties’ rates are higher than the statewide average.9 Swain is on the Appalachian Regional Commission’s list of designated distressed counties. Carol Burton, associate provost for undergraduate studies at WCU, describes the region as having “pockets of depressed living.” The region also deals with “brain drain,” like other rural parts of North Carolina. According to Wargo, “The majority of our graduates don’t stay here. The ones who stay head to Asheville or other metro areas where the jobs are.” Jenkins adds, “A lot of our best and brightest want to stay here but they don’t see the opportunity. Our challenge is to provide them with the opportunity to stay.”

“A lot of our best and brightest want to stay here but they don’t see the opportunity. Our challenge is to provide them with the opportunity to stay.” — Tommy Jenkins, economic development director, Macon County

Regional Thinking

Because people commute to jobs across county lines, it is hard for any of these counties to develop an economic strategy without thinking about how it intersects with its neighbors. Research shows that the individual counties on their own aren’t large enough to attract industry and business for a singular market within a county line.10 Regional thinking, then, is a must and it is nothing new to this area. Advantage West used to be the anchor organization that led regional economic development efforts for Western North Carolina, but it closed in 2015 when the state defunded regional economic development partnerships. Tommy Jenkins says, “There was a hole in economic development when Advantage West closed.” The area needed another organization to pick up where Advantage West left off. That’s when the Southwestern Commission stepped up. The commission “assists and provides technical support for local governments within the region, ensuring that they partner with one another toward regional goals.”11 Ryan Sherby says, “We are the trust broker, the consistency in the region.”

(Graphic courtesy of MDC)
(Graphic courtesy of MDC)

Sherby and his staff spoke with employers, local college administrators, and other community leaders and decided that a marketing strategy was needed to grow economic opportunity in the region. And since they don’t have the land to go after the next big manufacturing plant, their response focuses on entrepreneurship. “This area is attractive to entrepreneurs because of our quality of life and the access to so many outdoor activities and adventures. We’re going to give entrepreneurs everything they need to succeed here,” says Sherby. They decided to create a regional virtual collaborative, mapping the area’s entrepreneurship resources to provide a one-stop shop for anyone who wants to start their own business. The Tribe thinks entrepreneurship is in the best interest of their youth as well. “We encourage our young adults to use their per capita payments to start their own businesses,” says Martin. “We are educating them about the benefits of creating their own jobs.” Recent research has shown that entrepreneurship development is a plausible development strategy in rural areas and could “enable economically disadvantaged communities to reverse stagnant economic conditions by creating wealth and jobs through locally owned businesses.”12

This regional thinking does not stop with the Southwest Commission and economic developers. The Tribe and local colleges also are thinking about regionalism and how their successes can benefit the entire region. The Tribe is partnering with the Southwestern Commission to understand how it can work with all counties in the region. “We want to share the benefits of our work with the region,” says Martin. “We want prosperity beyond the Qualla Boundary.”

“We want to share the benefits of our work with the region. We want prosperity beyond the Qualla Boundary.” — Dan Martin, program officer, Cherokee Preservation Foundation

For the colleges in the area, regional thinking is part of their mission. According to Don Tomas, president of Southwestern Community College in Sylva, “Counties may have their own best interest at heart, but SCC is working with the Southwestern Commission to build a regional collaboration. We want to start at the grassroots level and filter up the success.”

In the past five years, Western Carolina University has taken its stated mission to “improve individual lives and enhance economic and community development in Western Carolina and beyond” to heart.13 Wargo describes WCU’s recent shift in focus this way: “WCU has done a 180-degree turn in a recommitment to the region and helping to develop prosperity. We want to improve economic development and opportunity in the region.” WCU has implemented several regional development strategies, including WCU/external partner-collaborative research and an annual conference for regional leaders to discuss economic development efforts. Each year WCU hosts a leadership tour of the Western North Carolina region to “reinforce WCU’s connection with its external constituents and to update University leadership consistently about regional and local priorities.”14 According to Sherby, “the commission/WCU relationship has grown because we all understand the need for collaboration.”

“WCU has done a 180-degree turn in a recommitment to the region and helping to develop prosperity. We want to improve economic development and opportunity in the region.” — Melissa Wargo, chief of staff, Western Carolina University

Expanding Educational Access to the Region

Driving 10 miles through the mountains takes a lot longer than driving 10 miles in other rural areas. This requires educators to think differently about how to deliver postsecondary opportunities. “Access to higher education is a challenge for many,” says Carol Burton, associate provost for undergraduate studies at WCU.

WCU is trying to increase educational access in the region, especially for those with limited opportunities. “We want to break down the barriers,” says Burton. “We were created to bring education to this part of the state. We were created with an access mission. We care about making a difference in the lives of students in this region.”

WCU has placed a particular emphasis on helping first-generation and low-income students. Chief of Staff Wargo says, “There are first-generation college student families who can’t cover the costs of attending college. We want to provide access for those who are prepared but don’t have the means. We have an obligation to provide that to these families.”

They are doing this through programs like “Telling Our Story,” an opportunity for first-generation and low-income students to share their life’s stories with Chancellor David Belcher, the WCU Board of Trustees, and donors. “When you hear them talk about how they’ve made it this far and how they want to stay in school but need the financial support, people are willing to support them,” says Burton. “We are celebrating those who have struggled to succeed.”

In order for North Carolina to meet the needs of employers, colleges must look further than students attending college for the first time. WCU is addressing this in their workforce development efforts. “The UNC strategic plan estimates that 36 percent of jobs of the future will require a bachelor’s degree or higher. If the UNC system concentrated solely on educating traditional North Carolina high school seniors, it would still not get us to 36 percent,” says Wargo. “We have to think about how to help adults without degrees, the ‘partway home’ students. We have to think strategically about how to provide an economic backbone and workforce for the region.”

That strategic thinking also includes listening to the community. When Chancellor David Belcher started at WCU in 2011, he went on a listening tour of the region and created a steering committee of college administrators, local community leaders, and employers. The committee went to communities all over the region to talk to residents about their needs. From this listening tour, WCU created a plan focused on economic development, academic excellence, and community engagement, “2020 Vision: Focusing our Future.” Six strategic directions are explained in this plan, including the fulfillment of the educational needs of the state and the region: “WCU seeks to ensure educational opportunities that result in graduates who are prepared for success, who are ready to compete in a challenging, changing, and global environment, and who are committed to contributing to the intellectual, cultural, and economic development of our region and state.”15

The strategic plan also included revamping program offerings. The university underwent a faculty-led, transparent program prioritization effort that led to the elimination of some programs and more investment in others. “We fine-tuned our curriculum to reflect what industry, education, healthcare, and nonprofits said they need from our graduates.”

The university also wants to meet the needs of the Tribe. According to former Eastern Band Principal Chief Dugan, “Most of our students go to WCU because of the accessibility. WCU’s objective is to be a regional force.”

With the Tribe’s focus on educational access, the relationship between WCU and the Tribe is a natural fit. Dugan says, “The Tribe has always valued education. Even at our poorest, we would give our last dollar to higher education.”

“The Tribe has always valued education. Even at our poorest, we would give our last dollar to higher education.” — Chief Dugan, former Eastern Band principal

All Eastern Band citizens who want to go to college are provided funding for tuition and books. Tribe college students also are provided additional incentives based on GPA. Although college funding is taken care of, retention is still a concern. According to Beverly Payne, assistant superintendent of Cherokee Central Schools, “Our students are used to having relationships with their teachers and then suddenly they don’t have that. Our school system and higher education program have developed programs to ease that transition.”

The Eastern Band would like students to return home after college graduation. “It is important to us that you come back and serve, that you help your people,” says Dugan. So they are helping students see all the different career options available on the reservation. “Many people within the Tribe have different careers,” says Dugan. “We have more than just doctors and lawyers. We have a museum. We need anthropologists and archaeologists. We need people to come back and manage the Tribe effectively and efficiently.”

Dugan is concerned about the health of the Tribe, but she’s also concerned about the happiness of their youth. When explaining the difference between a job and a career, Dugan says, “A job implies that it’s just a place you go to make a living. A career is something you do because you like it and want to do it. We want our youth to find success in careers they love. We want them to be inspired.”

Western North Carolina leaders know where their strengths lie—in people who care about each other, the beautiful mountains, and educational and economic organizations working toward regional growth—while also acknowledging the reality of remoteness and lack of flat land. This acknowledgement leads to innovative thinking to expand educational access and entrepreneurial opportunities that requires working together. This economic structure, strengthened by regional development strategies, a common vision, and collaborative efforts, could potentially lead to upward mobility in this rural area.

Western Carolina University, the Eastern Band of the Cherokee Nation, and the Southwestern Commission understand that the educational and economic health of the region requires strong relationships between all three entities. And while the players sometimes change due to administrative transitions or tribal elections, Sherby believes they can “transcend politics to grow and stabilize workforce and economic development efforts in the region.” In their isolated region, there is a sense of community. It’s a community that cares about it residents trying to get ahead. And the community has adopted the Cherokee belief: “We take care of our own.”


NORTH CAROLINA’S ECONOMIC IMPERATIVE: BUILDING AN INFRASTRUCTURE OF OPPORTUNITY

Part 1–Introduction

Part 2–Cultivating aspirations: Vance, Granville, Franklin, and Warren Counties

Part 3–Partners at the speed of trust: Guilford County

Part 4–Recovery through collaboration: Wilkes County

Part 5–Landscape defines opportunity: Western North Carolina

Part 6–Growth that benefits all: Pitt County

Show 15 footnotes

  1.  “Travel Economic Impact Model,” North Carolina Department of Commerce. https://www.nccommerce.com/tourism/research/economic-impact/teim
  2.  “North Carolina Resorts,” North Carolina History Project. http://www.northcarolinahistory.org/encyclopedia/722/entry
  3.  UNC Asheville National Environmental Modeling and Analysis Center. (2013). “Western North Carolina Vitality Index
  4.  Brennan, K., Cooper, C., and Ha, I. (2014). “Western North Carolina Regional Outlook Report 2014.”
  5.  Ibid.
  6.  UNC Asheville National Environmental Modeling and Analysis Center
  7.  Johnson, J., Kasarda, J., and Appold. S. (2011). “Assessing the Economic and Non-Economic Impacts of Harrah’s Cherokee Casino, North Carolina.”
  8.  “New casino games fuel growth in Cherokee, even as potential for gambling competition looms,” John Frank and Rick Rothacker, The News & Observer, August 2014. http://www.newsobserver.com/news/politics-government/state-politics/article10038947.html
  9.  Brennan, Cooper, and Ha.
  10.  According to the Southwestern Commission website, “experts in site location and business attraction have indicated that the Qualla Boundary and individual counties of western North Carolina are too small (as markets and destinations) to be able to effectively target and attract businesses on their own.”
  11.  Southwestern North Carolina Planning and Economic Development Commission, http://www.regiona.org
  12.  “Rural Community Economic Development: Experiences from the 1890 Land-Grant Institutions.” Ed., Robinson, K., Christy, R., and Baharanyi, N.
  13.  Western Carolina University. “2020 Vision: Focusing our Future.”
  14.  Ibid.
  15.  Ibid
Shun Robertson

Shun Robertson previously worked as a program director at MDC. She is currently the director of postsecondary state policy at Jobs for the Future where she leads the organization’s policy development efforts in select states and provides leadership in designing and implementing policy strategies to help states improve the use of student outcome data for institutional improvement and decision-making.