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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

January 21, 2011 at 9:35 AM

Looking beneath the anti-union label of South Carolina’s governor

New South Carolina Gov. Nikki Haley has this for organized labor, particularly the Machinists that would aim to organize the Boeing plant in North Charleston: “There’s no secret I don’t like the unions. We are a right-to-work state. I will do everything I can to defend the fact we are a right-to-work state. We are pro-business by nature. I want us to continue to be pro-business. If they don’t like what I said, I’m sorry, that’s how I feel.”

No need to apologize. But how’s that hatred of unions and “pro-business” stance been working out for the Palmetto State?

Unemployment was among the worst in the nation during the Great Recession (and the “business friendly” unemployment trust fund was essentially insolvent, requiring a federal bailout). The jobless rate stood at 10.6 percent in November, down from 12.3 percent in the same month of 2009, but far worse than Washington’s 9.2 percent.

South Carolina has used lavish incentives (i.e., industrial policy) to aggressively court major manufacturers. Its biggest coup was BMW, but it’s lost out more often to other Southern states. And South Carolina was hardly immune from the loss of factory jobs that hit America after China joined the World Trade Organization. From March 2001 to June 2008, South Carolina lost 78,000 manufacturing jobs, 4.3 percent of its total. During the same period, the nation lost 3.4 million, 2.6 percent, while Washington state lost 24,900, 0.9 percent.

But surely the hatred of unions that is common in South Carolina is providing some “show me the money” benefits for average people? Well, no. The Census Bureau’s latest measure of median household income showed South Carolina ninth from the bottom over the three years of 2007 to 2009. That $42,945 compared with $58,964 in Washington.

The poor income performance has other consequences. One measure of the working poor shows 24 percent of South Carolina children were in poverty in 2009, compared with a national average of 20 percent and 16 percent in Washington state. South Carolina ranked 45th overall in child well-being in the latest Kids Count report by the Annie E. Casey Foundation. Washington ranked 11th.

At least, “pro business” as defined by South Carolina must convey commanding competitive advantage. No, again. One of the best national surveys comes from the Beacon Hill Institute at Suffolk University. In its latest Competitiveness Report, which measures fiscal policy, infrastructure, technology, business incubation, openness and environment protections, South Carolina ranks 42nd overall. Washington comes in at 14th.

Gov. Haley need not fear, however. The federal Bureau of Labor Statistics reports that last year union membership fell to 11.9 percent of the workforce, down from 12.3 percent a year earlier. Much of the remaining unionized workforce is among those reviled public sector employees who (actually don’t) make so much more than private-sector workers.

We can all enjoy the ride down.

Today’s Econ Haiku:

Boeing engineers

Must wish a Google-like coup

Would hit Chicago

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