South Carolina’s Employment Economy: Still Struggling

Palmetto State has only recovered 79 percent of the jobs lost to Covid-19 shutdowns …

South Carolina’s economy continued to struggle on the employment front during the month of June – once again posting one of the nation’s worst labor participation rates. Meanwhile, the Palmetto State has only replaced approximately 79 percent of the jobs it lost during the Covid-19 recession, according to an analysis released by Wells Fargo accompanying the latest jobs data.

“Hiring continues to be constrained by a shortage of job seekers, particularly in high-contact industries like hospitality, household and personal services,” the Wells Fargo analysis noted.

According to data released by the U.S. Bureau of Labor Statistics (BLS), 2,396,749 South Carolinians were part of the state’s labor force during the month of June – an increase of 8,807 people from the previous month.

As it did a month ago, that increase prompted a modest 0.1 percent uptick in the state’s labor participation rate – which measures the extent to which working age citizens are gainfully employed. This key metric stood at 57.2 percent for the month of June – which was tied with New Mexico for the fifth-worst rate in the entire nation.

Only Alabama (56.8 percent), Kentucky (56.3 percent), Mississippi (56 percent) and West Virginia (55.2 percent) had smaller workforces as a percentage of their working-age populations.

As noted in previous posts, this news outlet follows the labor participation rate much more closely than the widely watched unemployment rate because it provides a far more accurate indicator of the extent to which people are gainfully employed … or not. Unlike the latter indicator – which only tracks a segment of workers within the labor force – the labor participation rate tracks the size of the workforce itself.

For those of you who follow the unemployment rate, it declined by 0.1 percent last month – from 4.6 percent to 4.5 percent.

Regular readers of this news outlet are well aware that this key employment indicator – like income levels in the Palmetto State – has consistently lagged behind the national average.

Under former governor Nikki Haley, labor participation in South Carolina peaked at 60.3 percent between May and September 2011 – but continued to lag well behind the national rate (which ranged between 64 percent and 64.2 percent during that time period).  In May of 2012, the rate dipped below 60 percent – and has remained beneath this key demarcation line ever since.  

By contrast, labor participation reached as high as 68.5 percent during the early 1990s – right around the time so-called “Republicans” were taking control of state government.

According to the Wells Fargo report, South Carolina has replaced approximately 230,200 of the 307,800 jobs lost during the first two months of the Covid-19 pandemic (March and April 2020). That leaves a gap of approximately 77,600 positions from where the state’s economy was last February.



How to close this gap? And more importantly, how to better position the Palmetto State to rise above its historic employment and income anemia?

For years, I have been championing income tax relief and other pro-free market reforms that would enable South Carolina small businesses and individual income earners to keep more of their money – thus enabling them to expand and employ more workers. Unfortunately, state leaders have decided to appropriate recent revenue surpluses elsewhere … choking off the ability of these businesses to expand.

South Carolina has the highest individual income tax rate in the southeast (and the eleventh-highest rate in the nation). In addition to being punitively high, the rate is regressive – to all income above $15,400.

Last fall, University of South Carolina economist Joseph Von Nessen told a conference of business leaders that “South Carolina will have to begin re-thinking its approach to economic development” – focusing less on corporate recruitment and more on “persuading workers to live in South Carolina.”

Meanwhile, economist Rebecca Gunnlaugsson has done some excellent work highlighting how anti-competitive tax climates have curtailed economic expansion at the municipal level – saddling individuals and existing businesses with exorbitant tax burdens.

If the Palmetto State is ever going to pull itself out of the vicious cycle of poverty and joblessness, it must stop subsidizing the mindless growth of government (including corporate welfare) – and start empowering the small businesses and sole proprietorships which drive job and income growth.



(Via: FITSNews)

Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina and before that he was a bass player and a dive bar bouncer. He lives in the Midlands region of the state with his wife and seven children. And yes, he has LOTS of hats (including the above-pictured Toronto Blue Jays’ lid).



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