Banks raise Charlotte's rate.

• Position: Charlotte

Not long ago, Mecklenburg County seemed almost recession-proof, buoyed as it was by Charlotte's prosperous big banks. Its unemployment rate after 9/11 peaked at a mere 6.2% in June 2002. Meanwhile, neighboring Gaston County, once celebrated as having the most textile mills in the nation, struggled with an exodus of jobs, first to Latin America and the Caribbean, then to Asia. Post-9/11 unemployment reached 10% in January 2002.

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Like many North Carolina counties, Gaston is again struggling with double-digit joblessness--11.4% in December. Before long, Mecklenburg will, too. Mike Walden, an economist at N.C. State University, says its unemployment rate could hit 11% by the end of this year and 13% by the middle of next year. "This is a recession that started in residential housing and spread into financial services. Charlotte's economy is built on that sector." About 35,000 people work there for Bank of America Corp. or San Francisco-based Wells Fargo & Co., which acquired Wachovia Corp. last year.

Mecklenburg posted a jobless rate of 8.3% in December, but the layoffs were just beginning, says Tony Plath, associate professor of finance at UNC Charlotte. He says the two banks ultimately will lay off about 7,000 employees in the Queen City--with Wells Fargo shedding about 4,000...