One of the state’s leading economists says South Carolina is not stabilizing its manufacturing sector, which could hurt the state’s economy in the long term.
At its monthly meeting, the state’s Board of Economic Advisors called in economist Don Schunk to hep them to discern what lies ahead for the state in the next year or so. The task at hand was to project state government revenue and how it might affect the budget.
Schunk first took look back unemployment in the state’s top money-making sectors. His date shows that manufacturing, leisure and hospitality, retail, and construction still suffered job losses in the tens of thousands.
Schunk says the while manufacturing is shrinking in this state, it still needs to be stabilized and nurtured.
“We’re not finding anything else to come in and take the place of that shrinking manufacturing sector. If we were successful in actively diversifying our economy, we would target manufacturing , try to keep manufacturing alive and as important as it has been and in addition to that be successful in growing other aspects of our state’s economy,” says Schunk.
Manufacturing employment is down drastically, due to three factors:
“Number one is productivity and efficiency and the switch away form labor into capital-intensive production. Number two is the global competition. In terms of wages and other costs we cannot compete with producers overseas. Third is, as our economy grows and people become more wealthy over a long period of time, we spend more on health care, we spend more on movies and restaurants and we spend relatively less on manufactured goods,” he says.
Schunk says that there is no silver bullet to fix this.”Part of the problem is I tend to think there are people out there that think there is still something magic out there, that if we pump enough money into research for some new technology, that it is going to save our state’s economy, and I don’t think that’s the case. I think what’s out there is the fact that we have still a very large manufacturing industry. As small as it’s gotten, it’s still very large.”
Schunck says that our large – blue collar workforce- still needs to have jobs. He and B.E.A. Chairman John Rainey agree that continuing to attract large manufacturing and retail distribution centers into the state will help meet that demand.