Five years after the Great Recession began in earnest in South Carolina, the state’s jobless rate remains stuck.
About 106,000 more South Carolinians had jobs in August 2008 than did this August. And the state’s jobless rate – 8.1 percent – is still a full percentage point higher than it was five years ago.
Then, in the fall of 2008, home sales were beginning to slide, the jobless rate was rising and, nationally, financial services firm Lehman Brothers just had filed the single largest bankruptcy in U.S. history.
Economic conditions took a sharp turn for the worse. The jobless rate in South Carolina rocketed up to nearly 12 percent by the end of 2009. Historically, a fast downturn has meant a fast recovery, said Frank Hefner, an economist with the College of Charleston.
But not anymore.
The Great Recession was different from downturns caused by an oil crisis or a tech bubble, Hefner said. It permeated all sectors of the economy. And it will take recovery in most of those sectors for the jobless rates to improve, he added.
The jobless rate in South Carolina has dropped excruciatingly slowly over the past 31/2 years. Since April, it has hovered around 8 percent, according to figures the S.C. Department of Employment and Workforce released Friday.
“That just shows the depths of this financial disaster,” Hefner said. “Not all recessions are the same. This was a financial crisis; we haven’t seen one since the 1920s, ’30s.”
South Carolina’s lingering financial woes will be the subject of heated debate over the next year.
Republican Gov. Nikki Haley, who is seeking re-election in 2014, says more than 37,000 jobs and $9 billion in investment have been announced since she took office in 2011.
“These numbers continue to grow every week, and the governor won’t stop building on them until every South Carolinian has a job,” spokesman Doug Mayer said.
However, state Sen. Vincent Sheheen, D-Kershaw, who will challenge Haley in the governor’s race next year, said Friday’s unemployment report “marks three months of no progress on jobs.”
“South Carolina continues to have one of the highest unemployment rates in the country, all while middle-class families take a hit from falling income and struggle to keep their heads above water,” Sheheen said. “We can do better.”
‘A lot of problems’
Escaping the recession has been a challenge for the nation and South Carolina.
The real estate market, which led the way into the recession, has been a bright spot in the recovery. Still, home sales and home-building levels have been set back 15 years – to levels seen in the mid-’90s – and rising mortgage rates threaten to stymie that recovery.
Employers have been hesitant to hire, in part because of complicated fiscal policies, economist Hefner said.
New banking regulations “created a lot of problems” that the financial industry still is trying to iron out, Hefner said. The new health-care law also is unclear to many employers and consumers. And the Federal Reserve “keeps changing its mind” about whether to continue its stimulus programs, he added.
Altogether, the uncertainty is “creating a drag on the economy,” Hefner said.
There are pockets of growth in South Carolina, economists say. The state’s metropolitan areas have fared better in the recovery than its rural areas.
“It’s the rural areas of South Carolina that keep the state from keeping pace with the (unemployment) national average,” University of South Carolina economist Joey Von Nessen said.
Metro areas generally have had unemployment rates that are closer to the national jobless rate, which dropped to 7.3 percent in August from 7.4 percent in July. Columbia’s jobless rate in August was 7.5 percent, with Greenville’s at 7.1 percent and Charleston’s at 6.9 percent.
“South Carolina has made some good progress over the past four years,” Von Nessen said. The state has gained back about 70 percent of the jobs lost during the recession, he said. The labor force is growing, albeit slowly, and consumers are spending more.
‘That’s a problem’
But the state still has a long way to go.
Going forward, having a work-force training strategy remains key, Von Nessen said, along with continuing to bring in new industry.
Job growth is going to have to happen throughout every employment sector for the unemployment rate to return to pre-recession levels, Hefner said. “It’s going to have to be across the board,” he said. “What we’d like to see is every one of those sectors increasing nicely.”
Thus far, that has not happened.
The state’s construction sector – one of the hardest hit – still is down more than 26,000 jobs compared to August 2008. And manufacturing is down more than 20,000 jobs from five years ago.
Meanwhile, the state’s leisure-and-hospitality sector has rebounded, adding 10,000 jobs over the past five years. But those typically are lower paying jobs, Von Nessen said.
“That’s a problem,” he said.
5 years later: S.C. jobless rate stuck