South Carolina will continue to be buffeted by outside economic forces for the near future. But the state also has the capacity to boost its own economic future from within.
That was the key message from Mark Vitner, a Charlotte-based managing director and senior economist with Wells Fargo. Vitner delivered the annual economic forecast at Winthrop University Sept. 20 to a roomful of local business and community leaders.
In many respects, South Carolina’s economy will be governed by the pace of regional and national growth. Vitner predicted that 2014 will look much like 2013, with modest growth and a great deal of uncertainty.
Pre-recession growth rates averaging about 3.3 percent, fueled by easy credit, could be a thing of the past, Vitner said. The “new normal” could be closer to 2.2 percent to 2.6 percent a year, although the growth rate in York, Chester and Lancaster counties could be slightly higher.
Vitner pointed to signs that the housing construction industry is improving. But home ownership numbers are falling, which, he said, would slow the recovery.
“You can’t have a recovery until you put more people in houses,” he said.
The state also will continue to cope with high unemployment and unemployed workers choosing not to seek new jobs. The percentage of people in South Carolina’s labor force recently hit an all-time low of 58.6 percent, according to the U.S. Census.
And that statistic speaks to a central point in Vitner’s presentation. South Carolina, he said, must invest more in education and training its workforce for a new wave of knowledge-based jobs. State workers need to be ready to compete for jobs in social media, developing apps and cloud-based computing solutions.
That, of course, is a short list. A variety of lucrative jobs will be available to those with the skills and training to take advantage of them.
But Vitner warns that, while South Carolina has landed significant companies to the state, such as BMW and Boeing, too many new jobs are low-skill, low-wage positions. He said that the state should rely less on recruiting outside resources and attracting tourists, and focus more on ensuring that workers have the skills businesses want.
In other words, the state needs to take the initiative in improving its own economy rather than hoping that outside forces will come to the rescue. That includes helping existing industries grow, Vitner said, but primarily it means producing a better educated workforce.
The frustrating thing about his advice is how obvious it is. The state shouldn’t have to be reminded that education and training are key components to raising the quality of the workforce, which, in turn, helps attract investment that will boost the economy for all.
Yet the state seems to be afflicted by a perpetual blind spot regarding that basic fact. Lawmakers and others responsible for ensuring that education – both K-12 and higher education – is elevated to the state’s top priority continually shortchange it.
Many of the new jobs recruited by the state pay low wages. Despite new industries, “we are still stuck in the mud,” said Vitner.
And until the state has a broadly educated, well trained workforce, that is where we are likely to stay.