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As South Carolina Votes, Jobs At The Forefront

The Republican primary is tomorrow, but the issues of jobs and slowing growth will linger in South Carolina after the votes are tallied.

What happens when the overall country is growing but, like South Carolina, you (as a state) are lagging not just the nation but the region? You get some disgruntled business owners – and, ergo, voters – headed into an important Republican primary on Saturday.

That’s what looks to be the case headed into the weekend, where issues of what is known as “crony capitalism” may be top of mind coming into the ballot booth. The 10,000-foot nationwide view may be a sanguine one, while the more granular information is decidedly less rosy. Consider the fact that through the end of 2015, our proprietary Store Front Business Index showed growth through the vagaries of stock market volatility, and also worries over global growth in China and elsewhere. The overall tracker, with insight into the trends seen across 3.4 million businesses nationwide, showed some growth overall, with some divergent trends in the South.

The growth in new establishments, nationwide, has been on a slowing path, though still decent, at 2 percent in the latest period. That should be a continuing trend into 2016, at roughly the same pace. Yet the South is projected to grow faster than that, at 3 percent going forward. The region itself has seen, in historical terms, the greatest boost in its growth not from physical locations, but rather wages, which were up 4 percent in the latest period, and then actual job creation, as measured by employees, up 3.5 percent.

And yet … The high-level data does not dovetail with results seen in South Carolina, our focus for this weekend headed into primary action. The latest data culled by PYMNTS and CAN Capital, though lagging, at second quarter’s end of 2015, shows growth, but underwhelming growth, as represented by any postings over 100 (100 represents a base year and base measurement). The readings show that the overall Index posted a 112.9 reading in the second quarter of the year, with comparable readings in the southern U.S. of 111, and bringing up the rear, South Carolina at 109.5. In the latter case, the growth is actually higher on a percentage basis from a year ago, at more than 4 percent, but that comes off an admittedly low reading of 104 in 2014.

So what does that all mean? The state itself has been — and still is — a launching pad for foreign companies establishing manufacturing operations abroad. But whereas once textiles and apparel firms reigned, now it is higher tech industries that hold sway, perhaps most notably automotive manufacturing. That has actually been a drag on net employment trends as the job growth has been taking place in industries demanding at least college degrees in a state where less than half the adult population has attained that level of education. With more than 8 percent of the state’s jobs tied to exports, it’s also a key issue and will remain so into the general election.

Not surprising, then, that the contest on the Republican side of the aisle on Saturday may be one that centers on blue collar vs. white collar sentiment in a state where, as The Wall Street Journal reported earlier in the week, the median household income is 16 percent below the national average.

Though the white collar jobs are the ones that would, of course, pay relatively more than might be seen in other employment subsets, it must be noted that the net addition of those jobs in South Carolina have not been enough to offset a steady, decades-long erosion in traditional textiles and other mills. With 50,000 jobs in less remunerative, and therefore likely less attractive, jobs lost between 2001 and 2014, compared to 5,500 added in aerospace and other higher tech fields over the same period, the numbers point to a net impact, at least in the sense of those gainfully employed (and armed with buying power, which might translate into store front creation and prosperity) in those sectors as a negative one.

However the voting shapes up Saturday, consider the debate far from finished.

To hear the voices of South Carolina’s store front merchants and their views on the health of their businesses, click here.

For detailed PYMNTS Store Front IndexTM results, including how South Carolina compares to other store front businesses in the U.S., click here.

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