How State Vacancies Are Hurting Businesses 

On the Friday afternoon before Labor Day, Leslie Lanier lamented how the limited ferry schedule has hurt Books to be Red, Ocracoke Island’s only bookstore.

Daytrippers and residents arrive to the 16-mile-long island from passenger and car ferries during the high season. But vacant positions to operate and maintain ferries, coupled with higher fuel costs, drove the nation’s second-largest state ferry system to cut routes earlier this summer.

“Absolutely, we’ve noticed a drop,” Lanier, the store’s owner, said between ringing customers up. “If we can’t get these people to come in here, they’re not spending, and the state’s not getting their tax dollars.”

Two minutes down the road, Daniela Gilbert, the owner of Dajio, the island’s white tablecloth, New American restaurant, echoed her concern.

“You have six, seven, eight lines of traffic just waiting there at Hatteras,” Gilbert said. “We have restaurants that are open and empty, and stores that are open and empty because they can’t get to us.”

Back on the mainland, the state Department of Transportation is also dealing with high turnover among its roadway engineers. This has slowed the time to approve “driveway permits” for new residential subdivisions and commercial shopping centers to 90–120 days, said Cameron Moore, the executive officer of the Wilmington-Cape Fear Home Builders Association. 

One in five DOT positions are open, which is down from more than one in four nearly a year ago, said human resources director Amanda Olive.

“We’re constantly in competition for employees,” Olive said. “DOT is very unique in the fact that many of our positions have an equivalent with private engineering and various businesses.”

The agency launched a series of programs this year to help introduce high school students and recent graduates to the department for a future career, but Olive knows that’s only part of the solution. 

“If we are drastically behind from a salary standpoint, we’re not going to be competitive for those people that you want to get,” Olive said. “You don’t want the third-choice applicant for the job as the person who is building and inspecting your bridges.”

Across state agencies, 23 percent of jobs are vacant—an all-time high and double the rate from 2013. While department heads direct their agencies, they’re far from being CEOs; they have to ask the General Assembly for new positions and for the latitude to increase wages, and recruitment and retention bonuses. 

Last year, inflation meant state workers took a net loss, as they have nearly every year for the past two decades. Wages increased 3.5 percent as goods and services rose 5.9 percent. 

Interest groups have decried how state vacancies have hurt public schools, Department of Motor Vehicles appointments, and the delivery of various social services, but businesses also rely on the state for services ranging from soil inspections to permitting new elevators and licensing commercial drivers. 

The Assembly spoke with the heads of seven agencies and all attributed low wages as the primary reason they’re facing vacancies and high turnover. Four said their inability to retain employees is impacting business in the state. Two said they’re meeting all deadlines, but with high numbers of employees eligible to retire, they fear that won’t be the case much longer. One said adding employees would help them bring in more revenue.

Almost three months after the start of the fiscal year, state employees finally know what their raises will be. On Friday, the House and Senate passed a budget that would give most state employees a 4 percent raise this year and 3 percent raise the next. The amount is below the 10 percent raise over two years that the State Employee Association of North Carolina advocated for, and less than the 12 percent growth in wages the private sector has seen the past two years.

Jon Hardister, a Republican representative from Guilford County who is running for state Labor Commissioner, said agencies believe the raises will be helpful to retain current employees and recruit others, but acknowledged that the raises are not enough.

“It would be a better strategy to focus on higher salaries at lower levels; a lot of times those are the hardest positions to fill,” Hardister said. He added that the legislature also potentially needs to add more positions to accommodate North Carolina’s growth, and support the state’s trade schools and trade sectors. 

Since Republicans took control of the General Assembly in 2011, they’ve taken a series of steps to make the state more business friendly, including cutting the corporate income tax, which they plan to phase out in 2030. Several publications rank the state as the best, or one of the best, in the country for business.

Others have advised the legislative leadership to consider factors other than lowering taxes. “Pro-growth spending like raising pay for teachers and government employees, building healthy and resilient communities, and investing in critical infrastructure can potentially have an even greater impact on North Carolina’s business competitiveness than the (lower) amount of taxation that individuals and corporations face,” Nathan Goldman and Christina Lewellen, accountants who teach at N.C. State University’s Poole College of Management, wrote last month.

In August, Secretary of State Elaine Marshall sent letters to legislative leaders and spoke publicly about her inability to serve North Carolina businesses. Her agency, which registers new businesses and provides detailed information on property liens for investors, has seen a 50 percent workload increase since the pandemic began with no additional staff. Her office has a vacancy rate of 11.5 percent. 

This year’s $30 billion state budget has a $3 billion surplus. 

“This is not a poor state,” Marshall said. “We [in the Secretary of State’s office] got $190 million in revenue last fiscal year for the state. That’s what people pay for services here. And our budget is $18 million. It should not be a money problem.”

Her agency, which typically has been able to process new business registrations within a week, saw turnaround climb to 30 days this summer as employees processed between 650 and 700 new business registrations each business day this past year.

Keeping Food Safe

As early as 2:30 a.m., inspectors with the state’s Agriculture and Consumer Services Department arrive at slaughter houses across the state. There, they watch beef, swine, lamb, and goats go to slaughter and ensure that they are fit for human consumption. 

State inspectors work at about 50 slaughter facilities across the state—often run by family businesses—that support local livestock farmers. They follow the animal from the time it arrives to check that the animals are handled humanely, their organs don’t look diseased, things like additives and dyes aren’t added in processing, and hygiene and safety standards are met.

“If I don’t have enough inspectors to go to the plant, the facility has got to be shut down,” Agriculture Commissioner Steve Troxler said. “People want a safe, affordable food supply that is abundant. If we don’t do our job with food safety, there’s going to be a recall.”

His department has a 15 percent vacancy rate. Positions like meat and poultry inspectors—which can come with grueling hours and working conditions ranging from sub-freezing to extreme humidity—have constant turnover, attributed to starting wages at $18.51 an hour, comparable to what some fast-food positions offer.

While few North Carolinians are farmers today, Troxler’s agency provides consumer services that “touch every citizen every day,” he said. 

State ag employees test food to reduce recalls; inspect gas pumps to make sure water isn’t in the tanks; deliver food to school cafeterias, food banks and other distribution areas; and weigh everything from trucks and bags of rice to lotto balls to ensure consumers get a fair shake.

Troxler’s department is one of many that has yet to miss a beat to support state businesses, but he worries about what’s on the horizon. 

Today, 9 percent of the Department of Agriculture’s employees could retire with full benefits, and in five years that number will rise to 25 percent. “Between salary competition and the age of the workforce and their ability to retire, this could become unmanageable real quickly,” Troxler said.

His agency conducted a study that found it would take $8 million a year to make their wages competitive with the private sector. But last year, the legislature gave him only enough money to provide $1 million in raises, an amount that “was just enough to piss everybody off,” he said. 

“It’s going to take a significant pay raise and some money to adjust these hard-to-fill positions to correct this,” Troxler said. “The only other thing that will correct it is a massive recession where there’s no jobs, and we don’t want to see that.”

Four decades ago, Gwen Pitts left a job as a bank teller and took up cotton farming. She learned how to systematically inspect her cotton for bugs, eggs, and insect damage from the local extension office.

Today, Pitts is the chair of the state pesticide board and a board member of the Farm Bureau, but still relies on state-funded services to run her family farm in Edgecombe County. 

“We call on them all the time if there’s an issue on the farm and the crop,” Pitts said about the extension office’s employees, who are paid by the state. “They come out there, look, carry it to the state lab, and take it to wherever we got the seed from.”

The agriculture inspectors provide free and low-cost soil testing, train farmers to look for discoloration in crops and soil, and contact seed companies to obtain answers on farmers’ behalf. 

So far, Pitts and the farmers she spoke with haven’t found delays in reaching people with expertise, but she is concerned about a future when current employees burnout or retire and there’s no younger workforce willing to take on the lower-pay, manual-labor jobs. That would hurt businesses.

“We’re not seeing it yet, but it doesn’t mean it’s not going to happen,” Pitts said. “If we can’t get the knowledgeable people, we’re going back to square one, and you better be growing your own food so you have something to eat.”

Hardest Hit

The state’s Department of Health and Human Services is among the hardest hit government agencies, with a vacancy rate of 26 percent. “It’s like running a relay race and every fourth person isn’t there,” said Secretary Kody Kinsley.

The vacancies and turnover have most impacted the department’s division of health service regulation, which oversees licensing facilities, inspecting them at regular intervals, and investigating complaints. There has not been enough seasoned staff to help new employees navigate complex regulations and help behavioral-health businesses and nonprofits fix problems.

It’s an issue that Marc Murphy, the CEO of Boys and Girls Homes of North Carolina, has taken on for years. Murphy worked at Boys and Girls Homes in the mid-1990s and then returned to lead it in February 2023.

In the last year, he attempted to renovate an existing group home for a higher level of care, which the regional organization overseeing state Medicaid benefits had requested. 

Murphy said that “complete turnover” in state staff led to contradictory interpretations of regulations that have cost him $1.3 million in lost revenue and more than $130,000 that went toward updates including new bedroom windows, fire detection equipment, and fire-safety renovations for children with greater needs.

“I’ve just never seen this challenge before,” Murphy said. “It’s hampering organizations’ ability to provide homes for kids that have been traumatized. And that just means they get moved more often, and that creates more trauma.”

Kinsley recognizes the issue of new staff not understanding where risk lies and where interpretation becomes too “black and white.” 

“We’re losing this institutional knowledge rapidly and it’s resulting in turnover,” Kinsley said about the division. 

Prior to the pandemic, the agency had vacancy rates around 10 percent. Wages for some of these demanding, overnight positions start around $15–16 an hour, which is no longer competitive when a person out of high school can make $18 an hour at Bojangles, Kinsley said. 

“A few more dollars in salary for each of these positions to make them more competitive in the market would yield a huge return,” he said. 

Correction: The time period Murphy has worked at the Boys and Girls Homes of North Carolina has been corrected.

Ren Larson is a staff reporter at The Assembly. She previously worked for The Texas Tribune and ProPublica’s investigative team, and as a data reporter with The Arizona Republic. She holds a master’s of public policy and an M.A. in international and area studies from the University of California, Berkeley. 

Kate Medley is a Durham-based visual journalist and filmmaker documenting the American South. Her work focuses on storytelling and environmental portraiture, often exploring issues of social justice and the shifting politics of this region. See more at her website.