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SC’s “Job Killer”



If you thought 2011 would be the year South Carolina’s economy started making inroads on its chronically-high unemployment rate, think again …

Our state’s already diminished competitive position is about to take yet another major hit – this time due to the ongoing cost of jobs we’ve already lost.

Wait … how is that possible?

Well, businesses across South Carolina are on the hook for $933 million worth of federal unemployment benefits paid out to workers who lost their jobs during the recession – a massive tab that state government is now trying to collect. In fact, Palmetto state businesses are currently being hit with huge tax bills in an effort to repay this debt and replenish our state’s exhausted employment reserve fund.

Obviously, forcing businesses (particularly staffing companies and manufacturing firms) to pick up the tab for tax increases as high as 600 percent will prevent them from hiring (or re-hiring) of thousands of workers over the coming year.

That poses an immediate threat to our state’s economic recovery.

Worse still, these tax increases are specifically targeting companies that were forced to lay off employees during the recession – i.e. companies that “used” unemployment benefits. That means businesses which might otherwise be in a position to rehire workers are instead being forced to send their money to the government.

Once again, way to go “Republicans.”

We began following this issue last Spring – and addressed it again when it reared its ugly head during in the gubernatorial election – but the basic inequity has yet to be addressed.

Exhausted in December of 2008, South Carolina’s unemployment reserve fund once had a balance of $800 million. Problems with the fund’s solvency first began appearing as far back as 2001, though, when it first dipped below federally-recommended reserve levels. Also, until recently the fund was managed by the notoriously corrupt S.C. Employment Security Commission – a legislatively-controlled agency that has since been replaced by the S.C. Department of Employment and Workforce.

Obviously, though, shifting letters around in the “bureaucratic soup” does nothing to solve the immediate problem – stagnant hiring.

According to a plan crafted last year by S.C. Sen. Greg Ryberg (R-Aiken) and House Majority Leader Kenny Bingham (RINO-Lexington), businesses which laid off workers during the recession will be forced to bear the brunt of the cost – shelling out as much as $1,128 per worker.

S.C. Gov. Nikki Haley supports that plan, calling it an “excellent reform” at a press conference last week.

Oddly enough, in backing Ryberg and Bingham’s plan, Haley is endorsing the position of the S.C. Chamber of Commerce – a liberal “pro-business” group that she has sparred with in the past.

We would respectfully disagree with all of them.

State government bureaucracies in South Carolina have received more than $4 billion in “stimulus” funds over the last two years – money that might as well have been flushed down the toilet. If the federal government truly wanted to “stimulate” the economy (as opposed to bailing out bureaucracies) why doesn’t it just forgive this loan?

After all, at least that would “stimulate” something …

Heck, the feds could even make up the difference out of that $703 billion pot of “unobligated” surplus funding sitting around in Washington, D.C.

Or … instead of bailing out state government agencies to the tune of $100 million (with another $125 million bailout coming), why don’t Haley and her legislative allies use that money to ease the burden on South Carolina businesses?

Right … that would make too much sense.

Our state has never been competitive economically, just as it has never managed its resources responsibly.

Based on its handling of this situation, we don’t see that changing any time soon.