The South emerges as jobs haven

Jim Berieau, a bartender, recently did something that seemed foolish. In the middle of last year's napping economy, he decided to buy a restaurant, the Humble Pie, in Raleigh's bohemian West End. He calculated that a new train depot - with boutiques, artists' studios, and townhouses nearby - would draw enough patrons to sustain his Spanish-style eatery.

While the final result of his experiment in chorizo capitalism isn't known, Mr. Berieau for now is overlord of a thriving business - for which he has hired a dozen people. "It seems like people who have come into town have gotten rooted here," he says. "It's kind of an up-and-coming urban area, but it's not outrageously expensive like most cities."

Berieau's journey into entrepreneurship is one reason Raleigh's unemployment rate recently dropped to 3.6 percent - among the lowest in the nation. It also helps explain a paradoxical job recovery in the South: Despite the thousands of manufacturing and technology jobs lost in recent years, this magnolia-scented region is now leading the nation in job creation.

From the Virginia Sounds to the mirror-skinned towers of Houston, large segments of the South are posting some of the highest employment gains in the country, which is particularly significant given the magnitude of the textile and other shop-floor losses of the past decade. Though pockets of hardship endure - and the region continues to lag in wealth creation - the economic growth has been impressive.

"When we talk about jobs being created [in the South], we're talking about everything from medical technicians to software writers to barbers," says Bernard Weinstein, director of the Center for Economic Development and Research in Denton, Texas. "We're not seeing an outmigration, even though a lot of basic industries were hit hard, and that's telling me there's a lot of fermentation going on underneath the surface."

The numbers bespeak some of the vibrancy:

• Total nonfarm employment in the South grew slightly over the past four years, while the nation as a whole lost a net of nearly 2 million jobs.

• From November 2003 to April 2004, the region's jobless rate dropped from 5.6 to 5.0 - the lowest rate of any US region.

• More locally, Virginia has posted a net gain of nearly 34,000 jobs the past four years, despite losing some 60,000 manufacturing. Florida has added nearly 278,000 positions. North Carolina produced more jobs, too, even though it lost 155,000 manufacturing positions.

"In the South, you've truly got areas that are magnets now, that have the jobs," says Mike Wald, a regional economist for the US Bureau of Labor Statistics in Atlanta. "They've done a beautiful turnaround, for example, in D.C. and northern Virginia and Maryland, and nobody even told Florida there was a recession going on."

Behind the South's vigor lies a variety of forces, from low wage rates and "right to work" laws to a languid lifestyle. Certainly the region's enduring population boom contributes to the economic dynamism. More people are moving to the South - which now contains one third of the US population - than any other region. Retiring baby boomers have helped boost population growth across the Sun Belt by as much as 50 percent more than some other areas. The demographic surge is reflected in robust housing numbers: In March, 613,000 new homes were sold in the South - nearly as much as all other US regions combined.

One notable characteristic of the new migrants is that they are staying put. In the recession of the late 1980s and early 1990s, many laid-off Southerners moved elsewhere looking for work. In the more recent downturn, many hung around - and are now finding jobs in an emerging service economy.

For instance, when Ben McLawhorn and his friends - many of them originally from the North - lost their jobs at a big pharmaceutical company near Raleigh a few years ago, the question quickly became: What now?

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