Will SC’s labor shortage improve? Report says it’s still holding state economy back
South Carolina moved past almost all of the economic damage due to COVID-19, according to a new report.
But one issue that has haunted the state since the beginning of the pandemic — labor shortages — continues to hold South Carolina back. Employment in the state is still down by nearly 13%, or roughly 40,000 jobs, compared to before the pandemic.
The new information comes from the University of South Carolina’s Darla Moore School of Business economic outlook report, released Tuesday. Speakers at an event Tuesday where the report was shared included economists and Mick Mulvaney, a former state lawmaker and congressman, who was former President Donald Trump’s acting chief of staff and the administration’s director of the Office of Management and Budget.
The report said recovery has been most prominent the Upstate and along the state’s coast, which have all recovered jobs at a higher rate than the state as a whole. The state’s unemployment rate sits at 3.9% as of October, down from a pandemic height of 12%.
“There’s no question that South Carolina’s economy is in good shape as we head into 2022,” USC economist Joey Von Nessen said in a press release. “Barring any new setbacks resulting from new COVID-19 variants, we anticipate that South Carolina will be fully recovered next year.”
Here’s where employment recovery stands in nine metro areas across and near the state:
▪ Augusta: 77.5%
▪ Charleston: 84.1%
▪ Charlotte/Rock Hill: 81.8%
▪ Columbia: 81.8%
▪ Florence: 80%
▪ Greenville/Spartanburg: 88.6%
▪ Hilton Head: 92.2%
▪ Myrtle Beach: 89.2%
▪ Sumter: 74.4%
The state’s labor shortage has been possibly the most visible form of economic hardship South Carolina dealt with since the start of the pandemic.
Industries such as hospitality have posted tens of thousands of jobs only to see them go unfilled for months, or end up with high turnover as workers hop from one job to the next. For much of the last year, the state also struggled to hold onto jobs, losing workers at times when it should’ve been seeing people return.
Yet, despite how thousands of jobs remain open across the state, many of the workers who used to fill them aren’t actually unemployed, according to economic data released last month. The trade, transportation and utilities industry, for example, is up by more than 10,000 jobs compared to before the pandemic. That rise could be in part due to workers switching industries, leaving often low-paying and high-stress sectors like restaurants and hotels behind, Federal Reserve economist Laura Ullrich said.
The lack of workers returning to hospitality created a hard time during the busy summer tourism season this year for businesses and the workers who returned to their old jobs. Many state leadersand business owners said repeatedly that ending the expanded federal unemployment benefits would solve a lot of problems and force people back into the workforce.
Yet, when the expanded benefits ended in June, little changed.
Von Nessen and USC economist Douglas Woodward said the labor shortage could get worse in the coming years.
“Approximately two-thirds of people who move to South Carolina are aged 55+. This means that a majority of in-migrants are either close to or past traditional retirement age, which will likely exacerbate the state’s existing labor shortage over time,” Von Nessen said in the release. “Businesses are already adjusting to this worker scarcity, but the upside is that for workers themselves, this is the best job market in a generation.”
The worker shortage isn’t the only major economic problem facing the state. Rapid inflation this year has damaged the buying power of a large chunk of Palmetto State residents.
For much of the fall, travel and daily life became more expensive due to higher oil prices affecting plane tickets and the cost at the pump. That inflationary pressure has finally relaxed in recent weeks, but prices are still nowhere near their pre-pandemic lows, when gas could often cost as little as $2 per gallon in much of the state.
Food prices also went up this year, affecting anything from turkeys to cream cheese, further hitting the budgets of low- and middle-income people. Inflation also hit home and rent prices, as thousands of people moved to the state and squeezed housing supplies.
“The current high rate of inflation is having real consequences for South Carolinians,” Von Nessen said. “Roughly 40 percent of South Carolina’s workforce has seen a loss in purchasing power this year due to rising prices.”
This story was originally published December 7, 2021 at 1:05 PM.
