Governor’s Job Numbers: Lots of Hype, Unanswered Questions

September 12, 2011

Investigative Reports

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The NerveWhen it comes to job creation in the Palmetto State, Gov. Nikki Haley likes to throw out seemingly impressive numbers.

On Wednesday, the first-term Republican governor boasted on her Facebook and Twitter accounts that she was “proud to have announced 11,491 new jobs in less than eight months.”

“I know naysayers want to see more, so do I,” Haley wrote. “You have and will continue to see results from our team. Get excited South Carolina!”

She repeated the 11,491 figure at a Rotary Club meeting Thursday in Lexington, according to an Associated Press article. Earlier this year, Haley was bragging publicly about an announced 10,000 jobs since taking office in January.

But upon closer examination, Haley’s job numbers don’t appear quite as exciting as she claims.

For starters, the state’s seasonally adjusted unemployment rate as of July was 10.9 percent – up from 10.5 percent in June – which tied with Michigan as the nation’s third-highest rate, according to the S.C. Department of Employment and Workforce. The number of unemployed workers in South Carolina in July was 236,424, the highest number for the year and up more than 10,000 from June, DEW records show.

Even if all of the 11,491 jobs that Haley cited immediately came off the state’s unemployment rolls as listed for July, and assuming the state’s total labor force stayed the same, the unemployment rate would drop to 10.4 percent – nearly identical to the unemployment rate in June and in January when Haley took office.

At least one-third of the jobs announced by Haley likely will pay wages below the state’s annual per-capita income, The Nerve’s review found.

Of the 11,491 announced  jobs, 4,000, or nearly 35 percent, would be generated with the addition of an unspecified number of new Wal-Mart stores in the state over a five-year period, based on information provided Friday to The Nerve by Haley’s office.

It’s unclear whether any of the 4,000 jobs will be part-time positions. A 2006 J.P. Morgan Chase & Co. report said the retail giant was planning to lower its percentage of full-time workers to about 60 percent from about 80 percent over a 12- to 18-month period, according to a Washington Post story.

About 300 of the announced 4,000 retail jobs would be salaried management positions, Haley said in May. Wal-Mart pays its non-salaried retail sales associates a base hourly wage ranging from $7.69 to $11.52, according to PayScale Inc., a compensation-data collection company that notes on its website that it provides an “immediate and precise snapshot of the job market.”

The per-capita income in South Carolina last year was $33,163 – 45th in the nation, according to the U.S. Bureau of Economic Analysis. Based on the top hourly rate for Wal-Mart associates cited by PayScale and a 40-hour work week, a Wal-Mart associate in South Carolina would earn no more than $23,961 in gross wages annually – $9,202 less yearly than the state’s 2010 per-capita income.

Wal-Mart isn’t the only retail project included on Haley’s list. She also included 350 jobs with the announced redevelopment of Tanger Outlet Center 1 mall near Hilton Head Island.

By contrast, the S.C. Department of Commerce’s website does not include either the Wal-Mart or Tanger retail projects in its press releases of announced projects, but instead concentrates on manufacturing or other non-retail commercial projects.

The Nerve’s review of Commerce press releases from Jan. 4 through Wednesday found that 49 new or expanding companies announced a total of 7,168 jobs. In more than half of the announced projects, most of which are included on Haley’s list of 52 projects, the jobs would be created over two- to six-year periods.

Excluding the Wal-Mart jobs, the average number of announced jobs per project on Haley’s list is 147. The median number of announced jobs per project is 80, meaning that in half of the projects, there are fewer than 80 jobs and in the other half, more than 80 jobs.

The lowest number of jobs on Haley’s list was 10 with the announcement in May of an expansion project at Adex Machining Technologies in Greenville County. Twelve of the announced projects will be located in Greenville County; another four in neighboring Spartanburg County.

Next to Wal-Mart, the second-largest announced job-creation project on Haley’s list is the proposed headquarters for a start-up company, 5-STAR USA, to be located in Marlboro County. The project would bring 1,000 jobs over a five-year period, according to an Aug. 31 S.C. Department of Commerce press release.

Commerce in its release vaguely described the company as a “venture capital start up investing in a manufacturing campus that will finance and manage vertically integrated businesses.”

The company on its website characterizes itself as a “fully contained, state-of-the-art business incubator providing the components necessary for leading-edge technology training to insure (sic) your business idea is a success.”

5-STAR lists the nonprofit Pee Dee Community Development Corporation as a “public partner,” which, according to the company’s website, “utilizes private and public funding to create jobs, stimulate local economies, help expand existing businesses  and recruit new businesses” in the Pee Dee region.

As of July, Marlboro County had the state’s third-highest unemployment rate (18.1 percent), behind Allendale County (19.8 percent) and Marion County (20 percent), according to the state Department of Employment and Workforce.

Contacted Friday, Aubrey Crosland told The Nerve that he is the chief executive officer of the Florence-based Pee Dee CDC and the interim CEO of the for-profit, 5-STAR company. But he stressed that “there is no partnership” between the Pee Dee CDC and 5-STAR despite his dual positions and the information on 5-STAR’s website linking the two entities.

Crosland said about half of the announced 1,000 jobs would come with a textile operation that will involve developing a brand of South Carolina cotton. The other announced 500 jobs would be generated by various small businesses that locate in 5-STAR’s “incubator,” which would “provide services that normally a small business can’t afford,” ranging from payroll to child-care programs, he said.

Start-up funding for the company likely will come from U.S. Department of Agriculture grants, venture capitalists and a public stock offering, Crosland said.

Asked about pay for 5-STAR’s future textile workers, Crosland said the average hourly wage would be about $20, which he noted is a “significant amount” for the Pee Dee region. A $20 hourly rate would work out to $41,600 annually – $8,437 higher than the state’s 2010 per-capita income – based on a 40-hour week.

The Nerve last week asked Haley’s chief spokesman, Rob Godfrey, for a breakdown of the average annual salary or hourly wage for each project on Haley’s list, as well as other information including:

  • Names and locations of the announced companies;
  • Number of announced jobs per company;
  • How many of the announced jobs will be filled by S.C. residents;
  • How many of the announced jobs will be full-time positions; and
  • How many of the announced jobs have been filled to date.

Godfrey on Friday provided The Nerve with a spreadsheet listing the name, location, projected capital investment and number of jobs for each announced company. But he didn’t answer any of the other questions and instead directed The Nerve to contact Commerce – a Cabinet agency of the governor – for a response.

Godfrey didn’t reply when asked why his office couldn’t obtain the additional information. Commerce typically requires The Nerve to submit requests for any information under the S.C. Freedom of Information Act.

It’s unknown how much state and local tax dollars will be spent to support the projects on Haley’s list.The Nerve over the past several months has submitted Freedom of Information Act requests to Commerce for incentives agreements on 15 announced projects this year.

In the vast majority of requests, Commerce either said no records existed or that documents couldn’t be released immediately because agreements had not been finalized.

Commerce on June 1 informed The Nerve in writing that it would provide incentives agreements for two of the projects on Haley’s list. But the agency has not yet released any of those documents, though The Nerve paid requested research and copying fees more than three months ago.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org.