In the next weeks, we are going to be hearing a lot from Gov. Mark Sanford about the huge amount of new investment his administration has brought to the state over the last four years. In 2002, we heard the same boasts from Gov. Jim Hodges.
In fact, South Carolina has attracted billions of dollars worth of factories, shipping and receiving centers, and other investments in recent decades. And that's good, because — if we know anything from listening to the echo chamber in Columbia — new investment means jobs and jobs mean prosperity and prosperity means a better standard of living for South Carolinians. And with enough new investment and jobs and prosperity, maybe this little state can crawl out of the cellar of national rankings and have something to crow about.
And yet, year after year, despite all this "progress," the dismal record shows that South Carolina remains near the bottom in personal income, standard of living, educational attainment, SAT scores, life expectancy, environmental quality ... and the list goes on. Year after year, our unemployment rate remains one of the highest in the nation. Our leaders turn our state into one vast industrial park and proclaim, "Jobs, jobs, jobs for all," but South Carolina remains a Third World country and a national laughingstock. Have you ever wondered why?
We got a little insight into this paradox in the Sept. 3 issue of The State. On a single page were reports that Mike Campbell, son of the late Gov. Carroll Campbell, who lost a recent bid for the GOP nomination for lieutenant governor, will head up the new state chapter of Americans for Prosperity, a Washington-based, pro-business, free-market lobbying group; and the S.C. Chamber of Commerce is joining with three other pro-business, right wing organizations to create the Coalition Against Unlimited Spending, a group to lobby for lower taxes.
From its high-rise offices looking down on the Statehouse, the S.C. Chamber of Commerce and its 4,500 members bring enormous muscle to bear on the General Assembly. Thanks to that muscle, South Carolina has among the lowest corporate taxes, lowest environmental standards, and absolutely the lowest rate of unionized labor in the nation. Two years ago, the General Assembly treated its corporate underwriters with an even stronger "employment at will" law, clarifying that employers have the final say in who works and under what circumstances, leaving employees few rights in their relationship with their employers.
According to its 2005 Annual Report, the S.C. Chamber of Commerce successfully lobbied the General Assembly for $835 million in tax cuts for businesses in the legislative session. Indeed, as a record number of businesses were lured into the state during the 1990s, total corporate income tax revenue fell by six percent! Local property tax revenue on business equipment fell by 13 percent between 1993 and 1997, according to Suzan Erem, who has researched state business and labor practices for a forthcoming book.
"South Carolina has always been a very conservative state, very pro-business," Chamber of Commerce president Howard Hunter told Erem. "When I was at the Department of Revenue, before I came here, South Carolina was the only state that carried its tax administrator on its trade missions because we had such a positive tax climate for business."
South Carolina is a "right-to-work" state, which helps keep unions weak. The S.C. Chamber of Commerce website boasts the state's low percentage of organized labor. What it doesn't mention is that our state ranks 45th in both per capita income and in hourly earnings in manufacturing and has the eighth highest level of poverty in the nation. It doesn't mention that workers in non-right-to-work states make 18 percent more than their counterparts in right-to-work states.
Keeping people poor is what draws industry to South Carolina and the people who run this state do not want to upset that sweet little apple cart. They also don't want to raise taxes on industry, which means that someone else has to pay those taxes, and, of course, that someone else is the group of people who already rank 45th in per capita income and hourly earnings in the nation.
Furthermore, South Carolina's antiquated income tax structure is one of the most regressive in the nation, penalizing the poor and enriching the rich. The income tax inequity was compounded recently with passage of "property tax reform," which protects wealthy property owners by raising the sales tax on everyone, including the poor.
South Carolina's economy is designed to be unfair and inequitable — and as The State reported recently, powerful interests are working hard to make it more so. Until environmental and labor groups can compete with the wealth and resources of the business lobby, we will continue to live in a Third World state.