News - Local/State

Saturday, Nov. 22, 2008

S.C. jobless rate jumps to 25-year high of 8 percent

Unemployment is up across most of the Southeast

COLUMBIA -- South Carolina's jobless rate hit 8 percent in October -- the highest in 25 years.

Unemployment rates ticked up across most of the region.

Officials said the jobs picture was consistent with the overall worsening of the national economy as a result of turmoil in the housing and financial markets.

South Carolina and Tennessee worried that the combination of more people being out of work and federal extensions of how long people can get assistance is draining the funds states use to pay unemployment benefits.

Experts said declines on Wall Street were having an impact as some retirees seek to return to work after their nest eggs lost value.

"People who could afford not to work are now back in the labor force," College of Charleston economist Frank Hefner said, adding that some people who retired after full careers have seen investments lose half their worth in a year.

Even the good news was tempered. Kentucky saw its jobless rate fall to 6.8 percent from September's 7.1 but still remained above the national rate of 6.5 percent.

South Carolina's jobless rate was the fourth-highest in the country -- from 7.3 percent in September. The state ranked behind just Michigan (9.3 percent), Rhode Island (9.3 percent) and California (8.2 percent), according to the U.S. Bureau of Labor Statistics.

In the Southeast, the next highest jobless rate was in Mississippi with 7.2 percent. Florida, Georgia, North Carolina and Tennessee all reported 7 percent.

Also reporting increases in October were Alabama at 5.6 percent, up from 5.3 percent, Louisiana at 5.5 percent from 5.2 percent, Maryland at 5 percent from 4.6 percent and Virginia at 4.4 percent from 4.3 percent. West Virginia was at 4.7 percent from 4.4 percent in September.

All state figures were seasonally adjusted.

Funds running dry

James Neeley, commissioner of the Tennessee Department of Labor and Workforce Development, said his state's unemployment fund now has about $500 million on hand to pay unemployment benefits, but workers are losing their jobs too quickly for the reserves to be replenished. If the national rate rises above 7.5 percent, the fund could run up a $150 million deficit by 2010, Neeley said.

South Carolina has already gotten a $15 million loan from the U.S. Labor Department to supplement the remaining $64 million in its unemployment insurance trust fund.

The fund was at $130 million in September and was $800 million seven years ago, which is the last time lawmakers increased the rate employers pay to fund benefits, South Carolina Employment Security Commission executive director Ted Halley said.

Don Schunk, economist at Coastal Carolina University, said now is not the time to ask businesses to pay more.

"When we get through the recession, states are going to have to look at the rates they charge businesses to replenish those funds and pay back those loans," he said.