Stimulus Money Not Creating Jobs in SC…Yet

Columbia, SC—One of the main goals of the American Recovery and Reinvestment Act was to save or create 3.5 million jobs nationwide. But, after $332 million in stimulus money has made it to South Carolina so far, it isn’t creating any jobs, says Richard Eckstrom, SC Comptroller General and chairman of the state Stimulus Oversight Task Force.

“You’d think that if jobs were created, we’d see the unemployment rate going down and it’s going in the opposite direction. There’s just no evidence,“ Eckstrom says. The state’s unemployment rate was 12.1 percent in May, the highest ever recorded in the state up from 11.4 percent in April. South Carolina is tied with Rhode Island for third-highest unemployment in the nation. Michigan has the highest rate at 14.1 percent and Oregon is second at 12.4.

According to the latest stimulus revenue report by the task force, South Carolina has received just more than $332 million in federal stimulus money so far. The largest chunk of that, almost $264 million, went to the state Department of Health and Human Services for Medicaid services. Eckstrom says while medical services for low-income residents is a worthy cause, it hasn’t created or saved any jobs.

The next-largest share of the money is $48.4 million for the state Employment Security Commission, which has gone to unemployment benefits. That’s provided those who are receiving benefits with an extra $25 a week.

The state Department of Education has received $17.1 million, which has gone to Title 1 payments to school districts. Title 1 is a program to help schools with high percentages of poor students to make sure those children meet academic standards.

“We’re not really seeing the sort of spending from the stimulus plan that would create jobs at this point. Some of the construction projects that will come later obviously will. Our hope is that money that’s coming in now will, but we certainly aren’t seeing any evidence that jobs are being created,“ Eckstrom says.

Gov. Mark Sanford’s spokesman, Joel Sawyer, says that while the state’s unemployment rate is rising, it’s important to look at the numbers behind the numbers.

“When you look back since 2003, South Carolina has actually gained 97,000 jobs. There are a lot of states out there, in fact 13, with a lower unemployment rate than us but that have lost jobs in that time,“ he says.

So why is our rate so much higher than most other states? The governor has consistently argued that it’s because of more people moving into the state. That has meant that, even though more jobs have been created, the job pool is much bigger, meaning a larger percentage of the people in that pool are out of work.

Gov. Sanford has fought against the stimulus all along, and Sawyer says the fact that it’s not creating jobs is no surprise. “People talk about stimulus, but what was passed and the money that’s coming in is not money that is going to grow jobs. If government spending created employment, there would never be any unemployment, because government spends and spends and spends,“ Sawyer says.

But state lawmakers, like Senate Finance Committee Chairman Hugh Leatherman, have been critical of Gov. Sanford, saying he hasn’t done enough to recruit new business and industry to the state. Sawyer argues that the state Department of Commerce broke a record last year for industrial recruitment and job recruitment and has had quite a few big announcements the last two years. That includes Samsung announcing 1,000 jobs in Greenville County, Cross Country Home Services announcing 350 jobs in Anderson County, Heinz with 350 jobs in Florence County and Monster, also in Florence County, with 200 jobs.

Sawyer says the governor will push hard during the next legislative session for his plan to phase out the corporate income tax. “Because that would be both an excellent recruitment incentive, to come here because of paying less in corporate income taxes,“ Sawyer says. “It would also help the businesses that are currently here grow, expand and add new employees.“