Manufacturing in Pickens County

I kept on an eye on the new businesses announcements by the county council the past three years. They included: US Waffle (115 jobs), Zero Connect (75 jobs), IPSUM (55 jobs), ERA Contact (45 jobs) and PE Aerospace (20 jobs).

Those are all good things, but it is not surprising our county leaders haven’t talked about the rest of the story. There were three significant closings during that time: Ellison Plant in Easley (175 jobs), OWT in Pickens (325 jobs) and Shaw Industries in Central (250 jobs).

Doing the math, I can’t help but think the strategy of giving incentives to new businesses while adding to the burdens of existing businesses is not a good one.

Pickens County has a long history of manufacturing, with its textile plants going back to the early 1900’s. Typically a child went to school, graduated and if he didn’t go to college, he could get a job in the mill, learn a skilled trade and earn a living wage. Unfortunately, those plants have closed for the most part and those jobs went away.

Above are the number of companies and manufacturing employment in Pickens County from 1975 to the present. For instancde, in December 2015, there were 118 manufacturing companies and 5,134 manufacturing jobs in Pickens County.

You can see manufacturing employment consistently has fallen from a peak in February 1978 at 14,622 to a low of 5,069 in 2009. The latest figure of manufacturing jobs in Pickens County is 5,378.

Here is that data in graphic form, going back to 2001. We have not seen a rebound in manufacturing in Pickens County.

Growing up in a manufacturing county, naturally our leaders thought, well just get new industry in here. Despite handing out some very generous tax incentives to new businesses, they’ve been unsuccessful in growing manufacturing in the county. The number of manufacturing companies and manufacturing jobs have only slightly rebounded from their lows.

According to John Lummus, Executive Director of Upstate Alliance, 86% of jobs created in South Carolina the past 20 years are from existing businesses already here.

In the pursuit of new business, our county leaders have lost sight of the fact existing business is the driver of new job creation. For instance, last year the county council flew to Europe in the name of attracting new business, while back at home they were quadrupling county debt and handing the bill to business.

In 2017 the school board hired an economic development coordinator, but then raised taxes three times in a row and have doubled their borrowing for capital maintenance.

Not only that, in 2007 the massive school building loan pushed the school debt millage rate to 58 mills. Today it remains at 54 mills despite all this housing growth, years of debt payments and refinancing the debt at a lower interest rate. That millage rate should have fallen to the high 30’s or low 40’s by now, but it has not because each time the board chose to borrow and spend more and keep the rate from falling like it would have.

The city of Pickens has created groups to help businesses like the Pickens Revitalization Association, while it is raised taxes from 52 mills ten years ago to 78 mills today.

Higher government taxes and fees on the private sector harm new business formation, the expansion of existing businesses, and job growth.

I have a better idea. How about the county council, school board and the city councils focus on better managing their budgets, keeping their costs, taxes and utility rates down, and leave it to local business to create the new jobs.

Business does not need any more “help” from the government, because the government’s version of help usually means handing out tax cuts to this or that business, and increasing the burdens on the rest by taxing, borrowing and spending more than they should.