Nikki Haley came in last January as the state’s second consecutive reform-minded governor, touting an agenda focusing on fiscal restraint – restructuring South Carolina’s unwieldy, 19th-century, legislative-centric, often dysfunctional government and opening its arcane rituals and procedures to public scrutiny.
But a faltering economy, chronic double-digit unemployment, falling state revenues and an unemployment compensation fund crisis quickly became Job One, although her campaign focus has not been entirely eclipsed.
“More than anything, I want to try to get everyone back to work,” Haley says “so I don’t look at how long this is going to take, I look at it as filling the jobs funnel. We’ve had great announcements every week and we’re going to continue having them.
“But that funnel’s been bare for a long time,” she says. Indeed. After slight dips earlier in the year, the unemployment rate hit 11.1 percent in August, a sign of continuing job losses and increases in the workforce. Through the summer, South Carolina had the nation’s fourth highest unemployment rate, two percentage points, or 20 percent higher than the U.S. as a whole.
Haley notes that the 11,000-plus jobs announced so far on her watch are a step in the right direction, but far more will be needed for a growing workforce fed by several factors.
First, there’s in–migration. South Carolina was one of America’s fast-growing states according to the 2010 U.S. Census, sufficient to win it another congressional district.
Then, Haley says, “We are seeing that a lot of people who have retired realize they don’t have enough money to live on, so they have to get back into the workforce. We’ve got a whole new group of graduating (high school and college) seniors looking for jobs. And we have people seeing the job announcements and deciding it’s time to get back out into the workforce again.”
All that has added to the state’s unemployment rate, she says.
Of course, more than two years of layoffs haven’t helped.
Beyond aggressive recruiting, Haley says, “We’ve got to look at job training; we’ve got to make sure that we’re giving people the outlets they need to become productive again. What we’re finding is that we’ve got a lot of experienced people, but they’re not necessarily skilled for the jobs we’re now bringing in.
“That’s been probably the biggest eye-opener – the growth in the workforce and the fact that we really do need job training in our state,” she says.
It doesn’t have to be an expensive fix, the governor says, because “not enough” of the money in the Department of Employment and Workforce’s budget is allocated for job training “so we’ll expand that,” shifting funds from administration.
“If we need more money, we’ll deal with that when it happens.”
There are serious limitations on what any state can do to deal with a national and global economic crisis, says Prof. Bruce Ransom of Clemson University’s Strom Thurmond Institute. “This is especially true of South Carolina, a state that is witnessing an erosion of its manufacturing sector, even prior to the ‘great recession,’” Ransom says because concerns about the state’s capacity to create new corporate investment began under Haley’s predecessor “largely due to a weak (development) record.” Citing Boeing, Amazon and the more recent $1.2 billion Bridgestone America project in Aiken, Ransom says Haley has “tangible” accomplishments so far, but upcoming efforts should focus on the poverty belt, that semi-circle running from southeast of Columbia to the Pee Dee.
That’s tomorrow. Today, of the state’s 46 counties, 38 have double-digit unemployment with Marion County’s 19.9 percent topping the list. Greenville’s August rate was 9 percent, second lowest after Lexington’s 8.6 percent.
Haley says that before arriving at the governor’s office, she sought out potential changes to improve the state’s business climate as a means of generating jobs. On the success side has been enactment of tort reform legislation that caps punitive damages, a measure long pushed by the state’s business community. Another was passage of point-of-sale tax assessments, aimed at more equitable treatment of second homes and commercial and investment properties.
Still pending is a fight with the Obama administration’s National Labor Relations Board which has targeted the state’s biggest industrial coup since BMW bought into the Upstate – Boeing’s new Dreamliner assembly plant in Charleston. The NLRB contends that Boeing decided on South Carolina because it is a right-to-work state and sought to punish activist labor unions for repeated strikes at the company’s Washington state headquarters. At stake are thousands of high-paying jobs. The effort, joined by the Republican members of the state’s congressional delegation, is “a good thing” for more than trying to save jobs here, Haley says, because it “allows the promotion of South Carolina as a strong right-to-work state.”
In recent weeks, Haley has been able to herald a number of new plants and expansions, although how many were corralled by the Governor’s Office and how many occurred organically is uncertain. Either way, as governor, Haley gets the spotlight. More needs to be done, Haley says, and as her first year in office winds down, a 2012 legislative agenda geared toward business-friendly initiatives and workforce enhancement is being prepared. “Government doesn’t create jobs; the private sector does,” she says.
While Republican Haley has an overwhelmingly Republican majority in the legislature, that doesn’t mean rubber-stamp approval of her initiatives. Many of those Republicans are senior members and former big government Democrats who don’t always see eye-to-eye with reform-minded governors. Unlike her Republican predecessor, Haley entered the governor’s office from the halls of the legislature. Not that only three terms in the House necessarily made her a creature of that body, but she arrived with background knowledge of the system and its players, something that had eluded Mark Sanford, whose political career consisted of service in Congress and a deep-rooted disdain for the system.
Again, unlike Sanford, Haley picked her fights rather than make every issue a war with the legislative barons. Still, she has run into an old-boy system determined to yield little, if any, of its power.
“I think there will be resistance,” Haley says. “It’s my job to educate them.”