DEC. 2, 2011 – State Secretary of Commerce Bobby Hitt is resolute in his belief that more manufacturing jobs are the key to growing the state’s economic future.
But what kind of economy will it be growing?
This week, speaking in his hometown of Charleston, Hitt rattled off an impressive list of new manufacturing jobs that have been announced in South Carolina over the past year.
The most recent was a textile company that is building a new $150,000 plant in Barnwell County. It will employ 120 people. But that pales in comparison to announcements earlier this year by two tire companies -- Continental and Bridgestone -- collectively to invest $1.7 billion and create 2,550 new jobs. These investments, plus expansions by Michelin in the state, could eventually lead to South Carolina becoming the nation’s largest tiremaker, Hitt said.
“Manufacturing is going to save this region,” said Hitt, a former BMW executive. He added that South Carolina could be at the forefront with its limited union presence and the loyalty state workers have shown to their employers.
Hitt called the manufacturing sector the “brightest spot in the state’s economy,” having just enjoyed its first back-to-back months of sector employment growth in 13 years. Additionally, he said manufacturing exports have increase 137 percent over the past 10 years. Add to the mix that the state has announced more than 17,000 new jobs since the beginning of the year.
Hitt also extolled the state’s need to focus on higher education, so that it could, in his words, “pull itself up by the hair.”
After the glad-handing subsided following the Rotary luncheon at which he was speaking, Hitt vigorously defended his agency’s focus.
The secretary was asked whether the state’s focus on manufacturing would cause it to follow the same dead-end path that textiles brought the state to years ago when thousands of jobs moved to foreign countries.
“These are good-paying jobs, $40,000 a year, in South Carolina,” said Hitt, who said his agency couldn’t do as much to help other sectors, like construction, until the nations’ banking woes are solved.
A two-tiered future?
Not only did Hitt’s Rotary speech avoid hot button topics of the past gubernatorial campaign of supporting small business and developing a knowledge-based, green economy, but also recent literature in the field of economics has brought up the concern that pursuing such a two-front campaign – higher education and plant floor jobs – could hasten what has been termed “employment polarization.”
In that case, there would be a thin band of highly educated and highly-paid managers overseeing a host of lower-educated and lower-paid plant workers, and the gulf between the two pay scales would only widen.
ECONOMIC OUTLOOK CONFERENCE
The 31st Annual Economic Outlook Conference at the Darla Moore School of Business will start Wednesday.
It will, through a host of international, national and state business leaders to give a “Prognosis for a Fragile Economy.” Hitt, Woodward and others will speak. More.
USC economist Douglas Woodward later acknowledged the potential of employment polarization, but defended Hitt’s focus.
“Manufacturing may not be the answer to everything, but it makes a lot of sense,” said Woodward, who will be delivering a speech at a USC Darla Moore School of Business next week about “hotspots” in the state’s economy
“If Commerce is going to focus on something, this is the place to do it,” said Woodward.
Woodward also said that Commerce shouldn’t be expected to do much for small business, which he holds is more of a local issue. He also said that what Commerce could do best for the state was to woo and recruit international investment.
And that is something it has done this year, with big plants announced all over the state, including the “game-changer” by Continental Tire near Sumter and rural counties.
McKinley Blackburn, a fellow economist at the Moore School, worried, though, that a push for higher education and manufacturing investment may not be “complementary.”
Blackburn said that in the future, state that focus on the “services side of the economy” likely will reach the top of the nation’s economic ladder. States that focused more on manufacturing might not be as competitive.
Hitt said that manufacturing currently makes up 10 percent of the state economy and retail, by comparison, 11 percent.
Crystal ball: Looks like manufacturing will need to grow first, as the state has failed to successfully ape knowledge-based projects like the Research Triangle in North Carolina, or Palo Alto’s computer world. The Triangle has three research universities - Duke, UNC-Chapel Hill and N.C. State – driving its research power. Palo Alto has Stanford, Cal-Berkeley and Cal-Tech is nearby. South Carolina has Innovista, ICAR, Clemson and USC. Not a fair fight. Not yet, at least.
Bill Davis is editor of Statehouse Report. He can be reached at: email@example.com.