Posted on Thu, Mar. 10, 2005


Unemployment rate reaches 7 percent


Associated Press

South Carolina's unemployment rate rose one-tenth of a point to 7 percent in January, the state Employment Security Commission said Thursday.

South Carolina had the fourth-highest jobless rate among states. It has been among the top ten with the highest rate for the past year, officials at the commission said.

Marion County had the highest unemployment rate at 15.8 percent, followed by Williamsburg at 14.3 percent. Greenville County had the lowest rate at 4.7 percent.

Gov. Mark Sanford said the rate is a "clear and present economic danger" and called for reducing the state's top income tax rate to 4.75 percent from 7 percent. Sanford said lowering income taxes has stimulated the economy and created new jobs in other states.

"Sadly, we are going to continue to fall further behind the rest of the country in creating jobs and growing our economy unless we start taking steps right now to make South Carolina more competitive," Sanford said in a statement.

South Carolina's unemployment rate outpaces the national rate, which was 5.2 percent in January. Only Alaska, Michigan and Mississippi had higher unemployment rates in January, Sanford said.

The real reason South Carolina is losing the fight for jobs is because the state educational system isn't doing enough to provide a highly skilled workforce in a technology-based economy, said Al Parish, an economist at Charleston Southern University.

"The competitive edge that other states have over South Carolina in the fight for jobs isn't the income tax," Parish said. "It has to do mostly, in my opinion, with education."

Adjusting the income tax may attract wealthy retirees to the state but will have little effect on the jobless rate, he said.

"In essence, what I'm saying is tax reform isn't the key to economic development," Parish said.

Clemson University economist Bruce Yandle said tax policies do matter to unemployment, but doubted there would be a dramatic change if the Sanford's proposal was implemented.

Yandle also said seven percent unemployment is "nothing to celebrate," but might not be as bad as it sounds. Employment in South Carolina is rising, too, meaning more people have jobs and more people are seeking jobs, he said.

"When you look at the unemployment rate, just the number, you can't necessarily draw a conclusion as to whether it's bad news or good news," Yandle said. "Right now it looks like it's mixed news."

The state's "still heavy dependence on manufacturing" is a reason for the high jobless rate, said Sam McClary, a labor market analyst for the commission.

"That's why we're number five in the nation," McClary said. "But certainly being that high is a reason for concern."

Parish added that rural areas have been focused too long "on how to bring those jobs back instead of how to replace them."

Analysis of job loss by sector was not released Thursday, McClary said.





© 2005 AP Wire and wire service sources. All Rights Reserved.
http://www.thestate.com