The beginning of a new year is a time for setting goals, making plans and developing wish lists. Although some of what we hope for may ultimately be beyond our reach, for many, it’s good to have a road map for where they want to head.

Here are my three wishes for the state’s economy for the new year.

That North Carolina will continue to be an attractive state in which existing businesses grow and expand, new businesses locate and people are employed.

North Carolina has been doing well recently in the jobs race. In 2006, the state added more than 100,000 net new jobs, and we’re adding employees faster than the nation.

Yet, although I certainly hope it could be true, it’s unlikely my wish can apply to every industry and every business in the state. Our economy is ever-changing. Even in the best of times, some industries contract and some companies shut down, while others expand and grow. This is just the nature of a competitive economy, where firms are always innovating and jockeying for a greater share of customers.

But today – and especially in North Carolina – there is the added element of turbulence caused by globalization and the fundamental restructuring of our economy. Traditional manufacturing has downsized, while new manufacturing and services have upsized. This means some industries will be challenged to hold onto sales and workers, while others will enjoy a widening commercial base.

To continue to attract new businesses, North Carolina will have to rely on key factors like a skilled work force, a reasonable cost of living, good schools and infrastructure and an efficient tax system that supplies needed revenues without penalizing success.

I wish that workers and families in North Carolina would earn enough to improve their standard of living.

The American – and North Carolinian – dream is to work hard and get ahead. For millions of North Carolinians, this strategy has worked. Since 1980, the average wage rate of North Carolina workers increased 20 percent, after inflation, and average household income (also after inflation) jumped 13 percent. Over the same period, the percentage of North Carolina households earning above $100,000 (in constant-purchasing-power dollars) doubled.

Increasingly, however, just working hard in a job isn’t enough. Workers have to have the right training and skills to get ahead. For instance,  the only workers whose wage rate has risen faster than inflation since 2000 are those with college degrees. Also, workers in professional occupations have seen their pay rates increase much more than those in other occupations.

All this means that educational opportunities are crucial for the economic well-being of North Carolinians. Both beginning and older workers must recognize that education is the single most important factor today that separates those moving forward and those not.

I wish that all decision-makers – individuals, families, businesses and governments – understand that resources are limited and that all choices involve tradeoffs between things we’d like to have.

As my mother used to say, you can’t have your cake and eat it too! If I spend more on clothes, I have less to spend on food and books. Or if a government increases the budget for health care, it may have a smaller budget for education and transportation. We can’t have everything we want when we want it.

Economic trade-offs include choices involving time. If the Waldens borrow money to buy a new car today, they’ll have less money to spend in the future. So the Waldens are trading off a new car today for fewer things later. But there is one exception to this rule. If the spending is done on an investment that pays a big return – like a growth stock or education in one’s abilities – then spending more today can actually lead to more income in the future.

These are my simple wishes for all North Carolinians.

Make your own decisions about how we can improve the economy and economic decision-making in 2007.

Have a happy and prosperous New Year!

Dr. Mike Walden is a William Neal Reynolds Professor and extension
economist in the Department of Agricultural and Resource Economics of North
Carolina State University’s College of Agriculture and Life Sciences. He
teaches and writes on personal finance, economic outlook, and public policy.