MARCH 13, 2009 - - Yes, it’s Friday the 13th. And the state’s unemployment rate is now second worst in the nation. So let’s look at how the recent surge in the state’s unemployment numbers has left Columbia scratching its head and pointing its fingers.
Earlier this week, the state Employment Security Commission released its latest round of unemployment numbers that showed South Carolina’s jobless rate had surged from December’s 8.8 percent to January’s 10.4 percent in a single month.
Now, South Carolina, with the fastest yearly unemployment increase in the nation, trails only Michigan. This week’s unemployment rate was the highest in the state in 26 years.
Last week’s good news from the federal government, that the reported December unemployment rate was to high by .8 percent, was eradicated this week when it was reported that an additional 43,000 jobs had been lost in South Carolina between December and January alone in several job sectors.
Sanford questioned over request
Gov. Mark Sanford also announced this week that he would seek to reject $700 million of the state’s share of the federal $787 billion stimulus package unless the state were allowed to use its portion for paying down the state’s debts.
Sanford sent a letter to legislators this week detailing his concerns that the federal stimulus would create state programs that would become an unfunded state burden later.
While some in the legislature praised the idea of reducing debt or refilling rainy-day funds, others were incredulous of Sanford’s timing and ideological stance of eschewing job-creation funding in the state’s current job market.
“It was especially insane,” said Rep. Joseph Neal (D-Hopkinsville) hours after the House went on furlough for a week in a money-saving effort.
“Our debt service was already covered in the budget we passed this week,” said House Minority Leader Harry Ott (D-St. Matthews).
The House took only two days this week to pass a $6.6 billion state budget for next year that included money from the stimulus package. The House sent it to the Senate a day before the state Board of Economic Advisers reduced the tax revenue projections by an additional 1 percent for the next two fiscal years.
Sanford even drew fire from his predecessor.
"It's unfortunately another sad story for South Carolina,” said former Gov. Jim Hodges. “Our unemployment continues to go up and we don't see any immediate signs
of relief. It underscores the need for the governor to accept the stimulus money. That money is designed to help regular people who are hurting a great deal.
"It's not people like Mark Sanford and Jim Hodges that are getting hurt by this economic downturn."
Commerce takes a beating too
But all the criticism wasn’t reserved for Sanford, as Sen. Hugh Leatherman (R-Florence) returned to sharpen an old saw: beating on the state Commerce Department.
During a sit-down interview in his dimly-lit office, Leatherman detailed his disappointments with the past two Commerce secretaries -- current head Joe Taylor and his predecessor, Bob Faith.
Both, he said, failed to meet his goals for job creation or accountability, especially after Leatherman said the Senate Finance Committee he chairs pumped $5 million extra General Fund monies into Commerce for FY2006-07.
S.C. Department of Commerce spokesperson Kara Borie defended her agency’s job-creation record, saying that it brought almost 19,000 new jobs to the state last year alone. While some of the jobs weren’t online yet, it was because of understandable lag, as it takes time to construct facilities, and other market realities.
Borie said the department had been hit by a 23-percent cut in recruiting dollars and a 34-percent cut in advertising in the last year alone.
Commerce Secretary Joe Taylor, echoing his boss the governor, has called for an end to state corporate income tax as an incentive to lure more businesses and jobs to the state.
Leatherman, who has taken part in job-force development projects around the globe, pooh-poohed the idea. “Nowhere have I ever been has anyone, anyone, asked about that; they all realize if they’re going to be here, they’re going to have to pay their part.”
Leatherman said businesses are more interested in other development factors, such as labor pools, education, and infrastructure.
More incentives sought
Senate President Pro Tempore Glenn McConnell (R-Charleston), usually quick to bash Sanford, struck a conciliatory tone, and said the state should look to incentives to fast-track more outside investment.
“I’m not against tax cuts, but I’m becoming more for incentives,” said McConnell. “I’m even more interested in doing immediately which will get what businesses are looking for today, not necessarily four, five years down the road.”
“I do think that Commerce should be more aggressive in dealing with how they are getting jobs in other states,“ said McConnell, who added that one of the biggest things the state could do to spur jobs growth would be to reenergize its ports.
Andre Bauer, who, in his role as lieutenant governor, is a little bit executive branch and a little bit legislative branch, said that now was not the time to play politics, but for everyone in the Statehouse to work together. One area Bauer, who heads the state’s Office on Aging, said needed to be focused on was making the state more welcoming of seniors who relocate here to retire.
Crystal ball: What did the legislature do the day the new unemployment numbers came out? The House adjourned for a week and many in the Senate were focused on the life-or-death issue of whether the right whale or dolphin should be the state’s official marine mammal. Ugly. It’s also an ugly truth that refiguring the December unemployment numbers produced more jobs, 22,000, than Commerce did in an entire year, 19,000. “We’ll let the naysayers say what they will,” said Borie. It’s also probably true that the economy is so bad that little can be done to improve job numbers in the short term. Worse news: the recession probably hasn’t bottomed out. We’ll know when it has, because job-creation recriminations will hit a crescendo.