Robin Mack moved to Charleston recently without a
job.
She figured it was a bit of a gamble, and so far she's been dealt one
losing hand after another.
A 44-year-old single mother, Mack was laid off in March, prompting her
to uproot her two school-age children from their Pennsylvania home and
relocate to James Island, where she has family.
The entire collections department that Mack worked for at D&B, a
global provider of business information, was outsourced to a cheaper
location in India. She spent six months out of work before deciding to try
her luck in Charleston.
"I have always worked and never been without a job in my life," said
Mack, whose unemployment benefits run out next month. "I don't let it get
to me. I motivate myself to try and find a job and stay positive."
The bad news for Mack and other displaced workers is that South
Carolina's job landscape looks bleak. Widespread layoffs in the
manufacturing sector have catapulted the state's unemployment rate to one
of the highest in the country.
That makes it tough for everyone in search of a job, from college
graduates to out-of-work mid-career laborers. It's especially hard to find
a job in rural areas across the state.
And things don't seem to be looking up.
Layoffs and plant closings through the end of July have affected 11,539
workers, figures from the state Commerce Department show. That's almost as
many as the 12,995 job losses recorded in all of 2004.
These facts of life haven't gone unnoticed in business and political
circles, both of which have criticized Gov. Mark Sanford in recent weeks
for doing too little to stimulate job growth.
The good news for Mack is that the Charleston metro area is creating
jobs at a faster clip than the rest of the state. In June, the area
unemployment rate stood at 5.4 percent, while the statewide average was
6.3 percent. A big reason the Lowcountry is doing better is that the bulk
of the area economy revolves around tourism, hospitality and port-related
businesses, not manufacturing. But while there may be jobs for Mack to
choose from, the bad news is that salaries for a lot of jobs are simply
too low for her to accept.
"I'm seeing positions for $7 an hour. How can I take that?" Mack said
last week while on a visit to the downtown Employment Security Commission.
"I really need something that pays $10 or more."
Low wages have long been a part of the state's bleak jobs' picture.
South Carolina workers typically earn 81 cents for every $1 their peers
make in other states.
Efforts are under way to change that by attracting outside businesses
and creating new ones at home with higher-paying positions. These
initiatives are part of a bigger job-creation blueprint aimed at steering
the state's economy away from fast-fading industries such as textiles and
other old-line manufacturing outfits, toward skilled factory positions and
service-sector work.
Despite these endeavors, South Carolina has lost 79,500 manufacturing
jobs since 2000. Many of these jobs have been lost to technological
advances and overseas competition.
Although other manufacturing-intensive states have suffered similar
problems, most have rebounded better than South Carolina.
STUBBORN RATE
The state's persistently high unemployment rate can't be pinned solely
on the vanishing factories that once dotted the state, economists say.
Some of the problem, they say, stems from an education system in which
half the students don't graduate from high school on time, or at all. Many
who do graduate don't have the basic skills companies are looking for,
they add. The same goes for longtime factory workers trained on
now-obsolete machines.
Another issue job-creation agencies and organizations are wrestling
with is a sea change in the way they do business.
For years, the main method of creating jobs was to attract smokestack
industries to build their hulking plants here. A low-wage labor force and
lack of unions made South Carolina ideal. Today, plants require a more
skilled work force, making the state a less attractive destination for
some companies.
And while recruitment is still a big part of the job-creation equation,
leaps in technology mean factories don't need to employ as many people as
they used to.
That has sparked a shift in thinking, with small, homegrown businesses
seen as the key to expanding the economy and creating jobs. A raft of
legislative initiatives, including tax cuts and tax breaks for mom-and-pop
shops, have been rolled out recently to meet those aims.
Whatever the approach, Michael Wald, a regional economist for the U.S.
Department of Labor, said South Carolina's unemployment rate remains
stubborn.
"Just a few years ago, South Carolina's rate was doing better than the
national rate," Wald said from his Atlanta office. "Yes, there have been
the layoffs with textiles and apparel, but look at other states in the
same situation. They seem to be doing better."
The June unemployment figures speak volumes on the subject.
Not only was South Carolina's 6.3 percent jobless rate far higher than
the national average of 5 percent, but the Palmetto State and Michigan
were the only two states to see declines in nonfarm employment so far this
year.
Concerns over anemic job growth were cited as a reason why Standard
& Poor's, one of Wall Street's biggest credit agencies, recently cut
South Carolina's bond rating.
But Moody's Investors Service, a competing agency, gave the state its
highest rating. It did, however, give a negative outlook for the state
A lower rating means a state will have to pay a higher interest rate to
sell its bonds.
Soon after, the criticism began to grow louder.
House Speaker Bobby Harrell, R-Charleston, said previous governors were
more effective than Sanford at recruiting industries to the state. U.S.
Rep. Gresham Barrett weighed in, saying Sanford wasn't generating enough
job growth for his Upstate constituency.
Earlier this month, reports surfaced that South Carolina business
leaders may back a candidate against Sanford in next year's gubernatorial
election. These leaders cited the state's slow job growth and failed
efforts to recruit big-time projects to the state.
In June, for example, the U.S. subsidiary of European aeronautics giant
Airbus chose Mobile, Ala., over North Charleston as a site to build an
engineering center. The decision could ultimately translate into $600
million in new investments and more than 1,000 new jobs.
In response to critics, Sanford has dispatched Commerce Secretary Bob
Faith to handle damage control. Faith points out that South Carolina
recruited roughly 13,500 jobs and $2.8 billion in capital investments last
year. Also, the average wage for those jobs is $34,773, about 30 percent
higher than the state's per capita income, according to Faith.
One of those big recruitment wins was Global Aeronautica, a new joint
venture that will build fuselage components for Boeing Co.'s new 787
passenger jet and, it is hoped, create about 650 jobs during the next few
years at a plant being built at Charleston International Airport.
But none of that changes the hard fact that South Carolina's
unemployment rate is still one of the nation's worst.
APPLES TO APPLES?
The Labor Department's Wald said one way to examine what South Carolina
might be doing wrong is to take a look at what Alabama might be doing
right.
Both Southeast states are manufacturing-based and both enjoy a healthy
tourism business along their coasts, making it possible to do a good
"apples to apples" comparison, Wald said.
In 2000, before the onset of the recession, South Carolina's
unemployment rate stood at 3.5 percent, beating out the 4 percent national
average. Alabama's rate was 4.1 percent that year.
Fast-forward to the end of 2004, and South Carolina jobless rate had
soared to 6.8 percent. At the same time, Alabama posted a 5.6 percent
rate, close to the national average of 5.5 percent.
"What did one state do better than the other?" Wald asked. "It's tough
to say, but worth a look to see if maybe one was helping retrain its
laid-off workers better, or was more successful at recruiting companies."
Two economic features separate the states in ways that may make the
difference, Wald noted.
First, Alabama has lured four major automakers -- Mercedes, Honda,
Toyota and Hyundai -- to establish assembly plants in the state, earning
it a new nickname: "Detroit of the South."
South Carolina, by contrast, has recruited one automaker, BMW, to build
in Spartanburg County, and that was more than a decade ago.
The second difference is the top-notch biotech hub that Alabama has
built around its state university in Birmingham. A host of drugmakers and
related industries are drawn to the area looking to tap the academic
research and, they hope, commercialize it for profit.
The knowledge-based cluster concept is in its infancy in South
Carolina. And while the passage of the Life Sciences Act earlier this year
shows state lawmakers have recognized biotech as a potential job creator,
South Carolina is years behind states such as Alabama.
Mike Fields, state director of the National Federation of Independent
Business, said he understands the frustration associated with high
unemployment but thinks Sanford-backed bills that became law this year
will go a long way toward making the state a more attractive place for
businesses.
"2005 has been a historic year for small business in this state," said
Fields, referring to new business-friendly tax cuts and laws that make it
tougher for people to sue companies. "These will pay tremendous dividends,
and I think help these (unemployment) numbers turn around."
Don Schunk, a research economist at the University of South Carolina's
Moore School of Business, said he's more concerned with the here and now,
and what's going to happen in the state's high-unemployment rural areas,
such as Marion, Marlboro and Williamsburg counties.
"Clearly, if no jobs are created in some of these areas, the people
will have to move to the cities for work or school to find a different set
of skills," Schunk said. "It's definitely troubling, but high unemployment
doesn't mean we aren't adding jobs. I keep telling people we are making
gains in some sectors and losing out in others."
That may be, but Schunk has revised his 2005 economic forecast to
better reflect the harsh economic reality. In December, he had projected
the state economy would grow 1.5 percent and whittle its unemployment rate
to 5.5 percent. Schunk now sees the state ending the year with 0.4 percent
growth and an unemployment rate of 6.5 percent.
Regardless of where the jobless rate ends up, Robin Mack is optimistic
she'll be offered a job soon. She recently interviewed for a position at
Roper Hospital in the medical billing section and is keeping her fingers
crossed.
"It's just a matter of time," Mack said. "I'll be back in a job soon
and this will all be forgotten."
For her, at least.
LOOKING FOR WORK
-- Nonfarm employment has increased in 48 states and the District of
Columbia so far this year, while decreasing in only two states, Michigan
and South Carolina.
-- Through the end of July, layoffs and closings in South Carolina this
year have affected 11,539 workers. That's almost as many as the 12,995
reported for all of 2004.
-- South Carolina has shed 79,500 manufacturing jobs in the last five
years. Nationwide, the tally stands at 3 million manufacturing jobs.
SOURCE: Bureau of Labor Statistics, South Carolina Department of
Commerce