NEWS: Incomes improve in S.C., but prosperity elusive, experts say

Print Friendly, PDF & Email

By Lindsay Street, Statehouse correspondent  |  The median household income in South Carolina is on the rise but policy experts say there is more the state can do to help make prosperity more accessible to its residents.  Many are just one paycheck or a medical event away from not being able to pay bills.

“There are lots of folks who are absolutely struggling in the state,” said Sue Berkowitz, director of S.C. Appleseed Legal Justice Center, which advocates for the state’s low-income earners.

According to a new report from the Census Bureau, South Carolina’s 2016 median household income was $49,501, which is about $2,000 more than the previous year.  More than 40 percent of S.C. family households earn less than $49,999 per year, the Census said.  But experts say that people who earn in this range or less than twice the state’s $24,300 poverty level are essentially working paycheck to paycheck.  That means about half of South Carolina’s families are virtually incapable of building wealth for the future.

Earlier this year, the legislature passed an earned income tax credit, which puts more money in the pockets of those who work who qualify for the federal credit. Now, some hope there is more the state can do as lawmakers eye jobs and education as top priorities for January.

Good jobs, good health and good education are “engines to prosperity,” said Steve Skardon, executive director of the Palmetto Project, a nonprofit that seeks to advance economic justice.

Good jobs

South Carolina’s unemployment rate (4 percent in August) beats the national rate, as the state continues to use incentives to lure thousands of jobs from big manufacturers. But that’s not enough to bring access to prosperity, Berkowitz said.

“While we are bringing in jobs, we are not bringing in the jobs that are meeting all of our needs,” Berkowitz said, adding that some do not pay wages that promote long-term prosperity.

Davis

S.C. Sen. Tom Davis, R-Beaufort, said the solution is bringing in more jobs to encourage wages to become more competitive.

“When you’re talking about improving the lives of South Carolinians, you’re talking about improving the economy,” Davis told Statehouse Report. “The best we can do is to create conditions that will be attractive to individuals who create jobs.”

Davis said the state should focus on income tax elimination and deregulation as incentives, instead of offering economic development incentives to encourage businesses to locate or expand in the state.  Gov. Henry McMaster has made deregulation a key part of his first year in office and issued an executive order for agencies to review regulations in the state.

“We’re very noncompetitive when it comes to other states (on income tax and regulations),” Davis said.

As a trade-off to end the income tax, Davis said billions of dollars of exemptions to the state’s sales tax should also end to allow South Carolina to generate the revenue to continue state services.

A different take on taxes

But not all agree on how to improve access to prosperity and wealth creation for South Carolina families.  S.C. Rep. Gilda Cobb-Hunter said the focus on taxes should be on funding the earned income tax credit — which is currently funded by surplus General Fund revenue. Once fully implemented, the EITC will cost $43 million per year.

Cobb-Hunter

“That is a vehicle that has proven effective in other states and the key is funding, and so I’m going to be working very hard to make sure there is money put in the budget for the earned income tax credit. It does no good to have it passed but no funding, that defeats the whole purpose,” Cobb-Hunter said.

Skardon was skeptical of tax cuts or deregulating industry as prosperity-building measures, and said bringing more jobs to the state rests on two factors: education and health care.

“We’ve got people here who need a good education so they can fill these jobs. Every company that looks at coming to South Carolina is deeply troubled by the fact there is not a well-educated workforce and, if they look really closely, they will notice it’s a really unhealthy workforce too,” Skardon said.

Good health

The rate of uninsured people in South Carolina — 10 percent — is higher than the national average of 8.8 percent.

“The key to prosperity is health,” Skardon said. “You can’t work and you’re sick. You have to spend all of your savings on medical care.”

Skardon, Berkowitz and Cobb-Hunter agreed that protecting the federally subsidized insurance market through the Affordable Care Act is key to keeping a healthy workforce. Skardon and Berkowitz said the state missed the opportunity to expand Medicaid under the act, which could have further fueled the state’s economy by providing access to affordable health care to thousands of poor South Carolinians.

Skardon

“The state completely missed the boat by not expanding Medicaid coverage, that was an economic stimulus in addition to making our workforce healthy,” Skardon said.

But Davis said he believed focusing on creating access to insurance is the wrong approach to a healthier and more prosperous workforce. Davis has sponsored a bill that would expand the ability of nurse practitioners to practice in the state.

“In terms of improving health outcomes, you have to improve access (to medical practitioners),” he said.

Davis also suggested a $5,000 or $6,000 health care voucher instead of state-operated insurance, which may not be accepted at all health care practitioner offices.

“Let them choose their doctor, let them choose their nurse practitioner … By doing that you would start to see medical services available at lower prices,” Davis said.

Good education

Just like with health, a good education facilitates the ability to claim jobs coming to South Carolina, according Cobb-Hunter.

“The bottom line is that prosperity will not come for a lot of South Carolinians until

the General Assembly commits to ensuring that all children receive a quality education, regardless of zip code. Failure to do so continues the cycle of poverty that has trapped so many people,” Cobb-Hunter said.

This week, the state has been focused on teacher retention and recruitment, an effort expected to help improve education outcomes. Lawmakers are also looking at the way education is funded, possibly helping poorer school districts access more money.

Davis said the state is making “inroads” in education, but it still came back to employment being the key to prosperity. He said the state needs to make high school more technical-college friendly by offering more tech courses to juniors and seniors.

“Businesses are going to prosper if they have a skilled workforce,” Davis said, adding that will in turn help state residents prosper.

Share

Leave a Reply

Your email address will not be published. Required fields are marked *