South Carolina: Jobless rate soars
Unemployment rate in the Palmetto State hits 10.4%, second highest in the nation. Governor resists expanding jobless benefits under federal stimulus package.
NEW YORK (CNNMoney.com) -- It's not easy to find a job in South Carolina these days.
While the economic meltdown has hit every state in the union, residents there have it particularly tough.
Unemployment in the state soared to 10.4% in January, the country's second highest behind Michigan and higher than the national 8.1% rate, according to federal figures. Over the past year, the rate has spiked 4.7 percentage points, tying it with North Carolina for the unenviable title of highest annual increase nationwide. More than 76,000 jobs were lost over the past year.
Massive corporate layoffs are not to blame, economists and state officials say. Instead, South Carolina has been shedding jobs in many areas, including manufacturing, tourism, construction and retail services. And many residents living on the border with North Carolina are suffering from the devastation in Charlotte, N.C.'s financial industry.
"It's every sector of our economy," said Doug Woodward, economic professor at the University of South Carolina's Moore School of Business.
Having a diverse manufacturing base -- which includes paper and forestry products, in addition to cars and textiles -- hasn't helped. All those factories are shedding workers, and they don't have anywhere to go.
The state's coastal area, which benefited from the tourism and real estate boom, is also suffering. Myrtle Beach is being hit hard by the drop in visitors and construction. Recently opened small businesses, such as pet grooming salons and coffee shops, are shutting their doors as consumer spending dries up, said Don Schunk, research economist with the BB&T Center for Economic and Community Development at Coastal Carolina University.
The future, he says, looks even grimmer. Normally known for his optimism about the economy, Schunk sees unemployment skyrocketing to as much as 15% by mid-2010. That would blow past the current jobless rate record of 11.4% set in January 1983.
"While this level of unemployment is stunning, the sheer speed of deterioration is perhaps most disconcerting," he said. "I don't see anything that suggests the pace of job losses is going to stop until sometime next year."
Compounding South Carolina's troubles is that its labor force is growing. In the past six years, the employment base has risen 11.2%, the sixth largest increase in the union, said Joel Sawyer, communications director for Governor Mark Sanford. That spike alone added more than 220,000 people to the ranks looking for work.
The population increase has eclipsed the employment growth of 117,000 jobs over the past six years.
The labor force growth, combined with the recent shedding of jobs, has left some 228,000 of the Palmetto State's residents looking for work in January.
"We're not a place where people are out-migrating from," Woodward said. "They are looking for jobs here."
The soaring jobless rate has left the state's unemployment trust fund insolvent, forcing the governor to request loans from the federal government. Sanford made headlines in December when he refused to apply for the loan until the Employment Security Commission provided him with information and data, which it eventually did.
Sanford is once again in the spotlight for refusing to accept part of his state's share of the $787 billion federal stimulus funds. The jobless would benefit from an additional $25 per week, thanks to the stimulus program. But the governor will not expand eligibility to part-time workers and others, which would bring the state more money, because he says South Carolina would have to continue the broader coverage even after the stimulus funds run out.