South Carolina’s shrinking workforce plumbed new depths during the month of November – escalating its precipitous decline into uncharted territory. This unprecedented plunge in labor participation – and its potentially catastrophic impact on income levels – will hopefully place renewed pressure on state lawmakers to take long-overdue steps to enhance the Palmetto State’s competitiveness.
Or at the very least, force them to take action to keep its citizens from falling further behind …
Lawmakers are scheduled to convene in the state capital of Columbia, S.C. on January 10, 2023. Ruling “Republicans” enjoy a supermajority in the S.C. House of Representatives, a near-supermajority in the State Senate and have total control of the state’s independently elected constitutional offices.
Will they use their unchecked power to enact bold, paradigm-shifting reforms?
Based on the early returns, don’t bet on it …
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In other words, we probably haven’t seen the bottom of the free-fall we are currently witnessing with respect to one of the most important economic indicators there is.
According to the latest data from the U.S. Bureau of Labor Statistics (BLS), the Palmetto State’s most vital employment metric – its labor participation rate – plunged by 0.3 percent in November from the previous month. That dip established a new record low of 56.4 percent.
Labor participation is now down 1.1 percent from just five months ago – making this the fastest, steepest descent this indicator has experienced since the aftermath of the Covid-19 pandemic. Nationally, labor participation is down only 0.1 percent from five months ago – meaning the Palmetto State is (once again) falling further behind the rest of the country.
Only three states – New Mexico (56 percent) West Virginia (54.9 percent) and Mississippi (54.8 percent) – currently fare worse than South Carolina on this key jobs data point.
For the latest look at these disturbing trend lines, check out this graphic from our intrepid research director Jenn Wood …
Hold up, though … why should you care about labor participation? Aren’t South Carolina politicians (and their mouthpieces in the mainstream media) constantly droning on about the unemployment rate?
Yes … but that’s the problem.
Unlike the unemployment rate – which only tracks a segment of workers within the labor force – labor participation tracks the size of the workforce itself. That makes it a far more accurate indicator of the extent to which people are gainfully employed … or not.
For those of you keeping score at home, last month there were 4,218,364 working age South Carolinians – of whom 2,380,754 were part of the labor force. The working age population increased by 6,763 from October, but the number of people working or actively looking for work declined by 5,702.
Over the past five months, the state’s working age population has expanded by 33,661 – but its workforce has shrunk by 23,432.
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RELATED | SUPERMAJORITY BLUES: SOUTH CAROLINA GOP STANDOFF CONTINUES
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“Just to maintain its current (anemic) positioning South Carolina must grow its labor force at the same rate its population is expanding,” I noted last month. “Actually, given the extent to which the Palmetto State trails the national average … this rate needs to be expanding faster than the population is growing.”
That is not happening …
For perspective, under former governor (and 2024 presidential hopeful) Nikki Haley, labor force participation in South Carolina peaked at 60.3 percent between May and September 2011 – but continued to lag behind the national rate (which ranged between 64 percent and 64.2 percent during that time period). In May of 2012, the rate dipped below 60 percent – and has remained beneath this key demarcation line ever since.
Under governor Henry McMaster and the current crop of “Republican” legislative leaders, labor force participation peaked at 58.3 percent in March and April of 2019. By contrast, labor participation reached as high as 68.5 percent during the early 1990s – right around the time the GOP was beginning its takeover of state government.
One final note? These latest numbers come as the BLS – the government agency which releases them – has come under intense fire for overstating job growth during the second quarter of 2022.
According to a report (.pdf) issued last week by the Philadelphia Federal Reserve, actual job growth between March and June of this year was “significantly different” nationwide than the BLS initially reported.
“In the aggregate, 10,500 net new jobs were added during the period rather than the 1,121,500 jobs estimated by the sum of the states,” the report concluded.
Wait a minute … only 10,500 new jobs? Against an announced total of 1.12 million new jobs?
So nice of them to release this information a month after the elections, right?
Actually, there is a more ominous consideration worth contemplating Even if we assume the BLS eventually admits its numbers were wrong (rigged?) – and adjusts them downward in future revisions – the Federal Reserve is continuing to aggressively hike interest rates based on the assumption the labor market is strong. Which it clearly isn’t.
“The cat is out of the bag” our friends at Zero Hedge noted, referring to the bombshell Philly Fed revelation as a “huge credibility issue in all recent payrolls data.”
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ABOUT THE AUTHOR …
(Via: FITSNews)
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven children.
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