South Carolina has been recovering jobs and increasing income faster than the rest of the nation in the first two years of Gov. Mark Sanford’s term, but the state’s unemployment has fared worse and pay continues to remain far below the rest of the country.

The Republican beat Democrat Gov. Jim Hodges in 2002 as the state was reeling from the 2001 recession. During the campaign, Sanford vowed to raise incomes of South Carolinians by promoting small business and depending less on big incentives to lure large companies to the state.

After two years in office, as an economic recovery slowly gains speed, pay raises have been meager and jobs scarce.

Sanford’s biggest recruiting achievement came in December, when Vought Aircraft of Dallas and Alenia Aeronautica of Rome announced they would spend $560 million to build an aircraft body plant in North Charleston that would employ 645 people.

Sanford, who is scheduled to appear Monday at the groundbreaking ceremony, took an active role to get that deal, and agreed to incentives expected to cost more than $130 million, one of the biggest incentive deals in the state’s history.

In a recent interview, Sanford said that the Vought-Alenia deal would be a net gain for taxpayers and that Vought-Alenia would have to pay back money if they don’t hold up their end of the bargain. And he will continue to push for a cut in the state’s tax rate on personal income to help small-business owners.

“Our view continues to be that the way we make the biggest difference in job growth is by helping indigenous businesses in South Carolina,” he said.

“The job importation business is a business that every other state in the Southeast is in; therefore, you can’t exit the business. But it’s not my favorite venue for growing either jobs or income in South Carolina.”

HOW THEY COMPARE

To compare the state’s economy under Sanford, The State analyzed federal job and income data from 1995 through 2004 to include the administrations of Republican Gov. David Beasley (1995-1998) and Democratic Gov. Jim Hodges (1999-2002).

The data were grouped into two-year periods to compare Sanford’s two-year record with his predecessors. These results also were compared with U.S. performance in the same periods to compensate for the economy’s swings.

The analysis shows:

• The state’s total nonfarm employment grew just 0.5 percent in the past two years, but the state’s gain compares with a national job decline of 0.4 percent.

• The average employee’s inflation-adjusted pay rose 0.7 percent to $31,400 per year over the past two years in South Carolina, beating U.S. growth of 0.4 percent.

• Joblessness has worsened, rising to an average 6.7 percent for the past two years in South Carolina, compared with a U.S. unemployment rate of 5.8 percent. The state’s jobless rate has been equal to or above the national average for 29 consecutive months — every month since August 2002.

Sanford noted that textile mills suffered especially during the recession and were a major factor in job losses.

“As fast as you could fill the bucket on one side, you were losing jobs out of the bottom of the bucket to China and Southeast Asia,” Sanford said. “The fact that you could still be up there with the national averages, given those kind of job loss numbers, I think is an accomplishment.”

Republicans and Democrats interviewed said Sanford cannot take blame — or credit — for the poor economic hand the nation dealt the state.

“I would not be critical of what he’s done in economic development,” said S.C. Senate majority leader Hugh Leatherman, R-Florence. “The economy has really been down the last three or four years.”

S.C. Senate minority leader John Land, D-Clarendon, said the state has been beating national averages for job growth for years because of a general shift of manufacturing jobs to the South.

“The state of South Carolina’s economy is like an aircraft carrier. You can turn the wheel hard in either direction, but it will take a while to turn.

“One manager, one governor, is not going to be able to make any dramatic shift or recovery without the benefit of the national economy,” Land said.

PER CAPITA GAP

When Sanford campaigned in 2002, he singled out income per person, or per capita income, as the measure for his success in raising incomes. The U.S. Bureau of Economic Analysis’ latest data is for 2003, only one year into his term. That year S.C. per capita income of $26,138 was 83.1 percent of the U.S. average, up slightly from 82.7 percent in 2002.

The state’s per capita income had risen from little more than 80 percent of the U.S. average at the end of the 1980s when Carroll Campbell became governor to a high of 83 percent in 1996, halfway into Republican Gov. David Beasley’s term. As the nation’s economy heated up, South Carolina fell further behind. By 2000, per capita income hit a low of 81.8 percent before it began its latest rise.

Most South Carolinians depend on their paychecks for income, and by that measure Sanford is working against a long-term trend of a widening gap with the nation. A decade ago, average yearly pay was 83 percent of the U.S. average, but the latest data from the U.S. Bureau of Labor Statistics shows the pay gap had grown to 81 percent by 2001-2002, the last half of Democratic Gov. Jim Hodges’ term, and has changed little since.

MORE JOBS, LESS PAY

South Carolina’s lagging pay is tied to its loss of higher-paying factory jobs and the swelling of jobs in lower-paying services where pay is falling further behind the national average.

Overall, factories shed 27,900 jobs since Sanford took office, a 9.3 percent drop that slightly exceeded the national loss of manufacturing. The state lost 37,600 factory jobs in Hodges’ last two years, a 10.3 percent drop that also topped the national average.

Manufacturing jobs — from the shop floor to the manager’s office — paid an average of $39,300 per year for the 18 months ending last June.

And those jobs are a shrinking portion of the state’s jobs. Factories employed 22 percent of the state’s workers before Beasley took office, but employ only 15 percent under Sanford.

Government pay under Sanford has been about $33,300 per year, also above average, but that sector has remained less than 18 percent of the work force over the past decade.

The hot growth sector has been among services and other private sector employers outside the factory gates, which has swelled from 60 percent of the work force in 1993-94 to 67 percent under Sanford. Those employers’ yearly pay has been about $28,200 under Sanford.

Sanford said he has tried to recruit higher-paying jobs. His goal, like governors before him, has been to draw jobs that depend more on knowledge and thinking and less on brawn and stamina.

In the Legislature, Sanford has spent much of his political capital trying to cut the state income tax rate from its current 7 percent rate to a 5 percent rate over 18 years. Sanford said a lower rate would encourage entrepreneurs to move to South Carolina.

The S.C. House voted Wednesday to pass the bill, but it faces a fight from Land and others in the Senate.

Land said the state’s effective income tax rate is far lower than 7 percent for most South Carolinians because of existing tax breaks for middle-income taxpayers. Sanford’s proposal would primarily benefit upper-income taxpayers, he said.

“He’s trying to give the rich man a break at the poor man’s expense,” Land said.

Reach DuPlessis at (803) 771-8305 or jduplessis@thestate.com.