WIS Deep Dive: Where are South Carolina’s 80,000 ‘missing’ workers?
COLUMBIA, S.C. (WIS) - Up to 80,000 workers are ‘missing’ in South Carolina’s economy according to Dr. Joey Von Nessen. He holds a Ph.D. in economics and was one of the speakers Tuesday at USC’s 42nd 2022 Economic Outlook Conference.
He said roughly 60% of these missing workers in the SC labor force are 55 years and older. His research found that many of these older workers exited the labor force during the COVID-19 pandemic. He shared that many have leveraged strong 401k performance during their exit.
The other 40% are estimated to have other types of financial arrangements such as support from a spouse or other family member. He explained that this is a large contributor to the current labor market shortage.
- South Carolina workers continue near record pace of job quitting in ‘Great Resignation’
- South Carolina ranked 4th in Great Resignation
- South Carolina reports record breaking month in Great Resignation
- South Carolina ranked among most challenging states to hire in
- South Carolina well positioned to weather potential recession, labor shortage here to stay says Columbia economist
Nationwide the United States is starting to trend toward an older population. Von Nessen said South Carolina has an exacerbated issue, with the state attracting retirees and skewing the population further older. During the conference, Von Nessen said the population demographic shift means the current labor market shortage will likely last through the decade.
Another area experiencing unusual shortages has been in government jobs. Columbia Mayor Daniel Rickenmann said local governments have been experiencing difficulties in hiring both administratively and in essential services such as law enforcement. He said in Columbia hundreds of government jobs are open, and thousands are open across the Midlands.
Rickenmann said one of the focuses of his administration economically has been to find ways to engage the 60,000 students in the area and encourage them to stay in the region. Another area of focus for Rickenmann includes finding ways to modernize the local tax code to become competitive with areas such as Charleston and Greenville.
Rickenmann said part of his agenda includes making Columbia more attractive to visitors. He cited roughly 45,000 recruits from Fort Jackson and other military installations support tens of thousands of jobs and have as many as 250,000 family members visit the region but only stay for three days on average. He said encouraging visitors to experience Midlands businesses and attractions can help drive the local economy.
Looking ahead to 2023, Von Nessen shared that economists predict there is a higher than 50% chance of a recession in the next 12 months. “The economy is still in good shape right now with more people working than at any other time in South Carolina’s history, but there are some initial signs that demand is beginning to taper,” said Von Nessen.
Von Nessen and the Division of Research Director and professor at USC Doug Woodward said a recession is not inevitable. It will be highly linked to how quickly inflation subsides. One of the tools the Fed has used throughout 2022 to curb it has been rate hikes. However, rate hikes take anywhere between 12 to 15 months before their impact is fully felt in the economy.
Another area of focus during the conference was the rate of employment in the state. Statewide total employment in Oct. rose to 102.8% compared to 2020. He said the state has mostly recovered from the job losses from early 2020, with employment overall rising to pre-pandemic levels. The current unemployment rate is 3.3%, Von Nessen said historically the average unemployment rate during a non-recession period has been at around 5% in the state.
Von Nessen pointed to the $6 trillion in COVID-19-related federal stimulus driving strong consumer demand and inflation. He said to expect 2023 to be a year of corrections. He explained that currently, the market is ‘economically unbalanced’ with demand outstripping supply.
One of the areas that have been most impacted in South Carolina is the housing market. Steadily rising interest rates through 2022 have doubled mortgage rates. Von Nessen said statewide there’s been a 23% drop in housing sales for the year.
Von Nessen put the market in perspective, “This represents a return to sales levels comparable to pre-pandemic norms and to levels that are better for stable, long-term growth. What we observed over the past two years was not sustainable.”
Woodward predicted the state is in a good position to handle any oncoming economic issues. Woodward said, “The competitive advantages of South Carolina, if anything, have been strengthened by the pandemic.” He described the low cost of living, multiple natural amenities, and high population growth as strong indicators the state can weather a potential recession.
Notice a spelling or grammar error in this article? Click or tap here to report it. Please include the article's headline.
Copyright 2022 WIS. All rights reserved.