Obviously, it’s wonderful news that Boeing has chosen South Carolina over Washington State for its second 787 Dreamliner assembly facility.
Even better news? Boeing and the S.C. Department of Commerce clarified yesterday that the company will be adding 3,800 new jobs to the 2,500 it already employs in the Palmetto State, or at least Boeing “feels confident we can reach that figure” over the next seven years.
That’s great to hear.
Excellent, in fact, when you consider the fact that Boeing jobs bring a disproportionately high percentage of “spin-off” or “support” jobs with them. Some estimates are that the company will create nearly two positions for every one position in its South Carolina factories – which will obviously be a boon to the Charleston area and the state’s economy as a whole.
We were, however, a little disturbed to hear advocates of government-run economic development in South Carolina already touting Boeing’s announcement as a victory for the “clusters” approach to generating economic growth.
It’s a victory for the almighty dollar – as our economic development team simply threw more taxpayer money at Boeing than Washington did, a fact that has to infuriate the synergy-speak socialists in the Darla Moore crowd.
South Carolina went big bear hunting with hundreds of millions of dollars worth of taxpayer incentives – including $170 million in up-front grants – and this time it paid off. Five years ago, obviously, it was a different story.
Similarly “full of it” is the politician likely to gain the most from Boeing’s announcement, embattled S.C. Gov. Mark Sanford, who called it a “telling dividend from our state’s continued efforts to better our business climate.”
That’s not true, either, as South Carolina’s competitive position has appreciably worsened since Sanford took office.
Again, we paid Boeing more money than Washington. Simple as that.
So … what do we get for this investment?
Well, assuming that Boeing were to immediately create every single one of the 3,800 jobs envisioned by the state’s incentive offering, South Carolina’s unemployment rate would inch down from 11.6% to 11.43%.
Indeed, these 3,800 jobs represent just 1.5% of the employment pool and a measly .17% of the state’s workforce – or approximately the same number of full-time positions shed by the state during the month of September.
Of course, in addition to the 3,570 workers who were added to the Palmetto State’s unemployment rolls last month, another 2,851 left the labor force – many of them no doubt in frustration at being unable to find a job.
Again, don’t get us wrong … Boeing is huge news. Great news. And depending on the data released by Commerce, we may even conclude that the final incentive package was a good deal for the state.
But we cannot take our eye off the ball.
We cannot forget where sustained job creation comes from.
Making a lasting impact on our state’s unemployment rate means improving our underlying business climate for companies that employ 50 or fewer employees – small businesses – the people who (oh by the way) produce 95% of the jobs in this state.
Incentive packages are fine for big-game hunting, but as these numbers indicate the real solution is a climate that fosters small business growth and entrepreneurship.