South Carolina: Poor, Jobless, and... Republican
Policy + Politics

South Carolina: Poor, Jobless, and... Republican

REUTERS/Eric Thayer

Republican candidates crisscrossing South Carolina this week are railing against the president’s management of the economy.  Newt Gingrich is leading the charge with his racially-tinged comment that Obama is “the food stamp president.” 

But the economic woe of a state that remains solidly Republican predates either the Great Recession or its aftermath. For many decades, South Carolina has been disproportionately poor, with a larger share of its population without health insurance and overly dependent on food stamps and disability payments than virtually every other state. Its wages and household income also lag behind, which was just as true in 1977 and 2007 as it is today.

For most of the past three decades, as its traditional base in textile manufacturing fled to Mexico, China and other low-wage havens, the 4.6-million-person state staked its hopes on attracting major employers like BMW and Boeing, offering tax breaks, job training subsidies and cheap labor. But that has only helped isolated pockets of the state, regional economists say.

Meanwhile, outsiders are gobbling up its homegrown firms. “We’ve become a branch plant economy,” said Douglas Woodward, an economics professor at the Moore School of Business at the University of South Carolina. “Our graduates have to go elsewhere to find work because we don’t have a lot of locally-based companies with strong national and international markets.”

Like much of the rest of the country, South Carolina’s economy is slowly recovering from the depths of the downturn, which drove its unemployment rate to 11.8 percent by late 2009. While the state’s rate dropped to 9.2 percent in November, unemployment remains significantly higher than the national average.

“Parts of the economy are recovering relatively well, but parts are really suffering,” said Jeffrey Allen, director of the Strom Thurmond Institute of Government and Public Affairs at Clemson University. “When that housing bust hit, it hit South Carolina probably as hard as other places.”

Today, the state ranks near the bottom in virtually every economic category.

  • Just 24 percent of its workforce is college educated compared to 28 percent nationwide. 
  • Per capita income is $42,580, nearly $8,000 below the national average. 
  • South Carolina gets more federal dollars than most other states because it is dependent on several large military installations, including Fort Jackson, the army’s largest basic training camp.
  • 19 percent of its population is on food stamps compared to 15 percent nationwide.
  • A larger share of its population receives Social Security disability.
  • The single largest employer in the state is the Savannah River nuclear processing plant, which reprocesses plutonium for nuclear bombs and is a way station for nuclear waste.

Manufacturing Decline
Fast-growing coastal areas like Myrtle Beach, Hilton Head and Charleston expanded rapidly during the 2000s as tourism, golf resorts and seaside housing developments attracted a large influx of relatively well-off retirees. The state’s population grew by 600,000 in the past decade and it gained a Congressional seat after last year’s census.

But construction fell off a cliff in the wake of the financial crisis, and now those areas have the highest unemployment rates in the state. The state has one-third fewer construction jobs today than when George W. Bush took office in 2001, and 40 percent fewer than its peak employment in January 2007. Romney is running strongest in those coastal areas, along with the government-dependent state capital of Columbia, which is the traditional home of the more moderate Republican elements in the state.

Meanwhile, the decline in domestic manufacturing that plagued the entire country during of the 2000s hit South Carolina and its blue-collar workforce particularly hard. The state lost 31 percent of its manufacturing jobs during the Bush years, but only 4 percent during Obama’s term in office. It has regained nearly 11,000 goods-producing jobs in the past year.

“The perception that the politicians and certainly the governor (Nikki Haley, the Tea Party-backed Indian immigrants’ daughter who has endorsed Romney) want to project is that they’re creating jobs and bringing in business,” said Allen. “But the last poll on her shows her favorability ratings are down.”

That has left an opening in the semi-rural and manufacturing centers of the state like Greenville and Spartanburg for former Pennsylvania Sen. Rick Santorum and Gingrich. The Super-PAC aligned with Gingrich purchased the anti-Romney, anti-Bain Capital video, “When Mitt Romney Came to Town,” hoping to appeal to those voters with its portrayal of the Republican frontrunner as a greedy capitalist who cares little for the people who lost their jobs in private equity buyouts.

But many observers are skeptical that it will have much resonance with conservative, working-class voters in South Carolina, who have reliably voted GOP since Barry Goldwater’s race in 1964 and long ago abandoned hope that politicians can improve their lives (even as they disproportionately rely on food stamps, disability and federal spending). “Santorum is talking about manufacturing, but those voters are more interested in social issues and someone running against Washington,” said U.S.C.’s Woodward.

Obama won 45 percent of the state’s vote in 2008, the best showing for a Democrat since Georgia Gov. Jimmy Carter won South Carolina and the entire South in his successful 1976 bid for the White House. Some political analysts thought Obama’s vote total was a harbinger of a future shift in the state’s voting patterns given its growing immigrant and minority population. The state is about one-third black, Hispanic and Asian.

But Tea Party-backed candidates including Haley captured the legislature and the governor’s mansion in 2010, and enacted a series of measures that have put the African-American-dominated Democratic Party on the defensive. The legislature passed mandatory drug testing for people receiving unemployment insurance; legislation prohibiting union members from serving on state boards and commissions (just 6 percent of the state’s workforce is unionized, compared to 13 percent nationwide); and enacted sweeping voter identification and immigration control laws, which are being fought by the Obama administration’s Justice Department. A federal judge has already struck down the immigration law.

“The Tea Party has more legs here than just about anywhere,” said Brett Bursey, director of the state’s embattled South Carolina Progressive Network, which lobbies the statehouse for greater social spending. The group has been ineffective in stopping the Republican-dominated legislature from cutting teacher salaries to 1995 levels while eliminating 40 percent of the state’s already meager mental health budget. “They’re against government,” he said.

That’s why, he believes, Texas Rep. Ron Paul will do surprisingly well by the time the final votes are tabulated on Saturday night, even if, as expected, Romney wins because Gingrich and Santorum split the white working class vote.