New South battles old poverty as right-to-work promises fade

South Carolina has seen good business news in the past year. Manufacturing employment in August was up 11,000 jobs from a year earlier, including 1,600 new jobs at BMW. The state beat out North Carolina for a Continental Tire company factory on Oct. 6. It’s getting an Amazon distribution center near Columbia.

BMW’s South Carolina plant directly and indirectly supported 23,050 jobs in 2007 and 2008, generating $1.2 billion in wages, according to a study by the Moore School of Business at the University of South Carolina in Columbia. The automaker’s direct employees at the plant accounted for 2.2 percent of the state’s manufacturing employment, the study said.

Expectations ‘Exceeded’

“Since announcing our BMW operations in South Carolina in 1992, and beginning production in 1994, our expectations have continually been exceeded,” Max Metcalf, a spokesman, said in an e-mail.

Some of the new jobs in the state, though, have carried a downside. Employers began hiring through staffing agencies, instead of directly. The jobs were temporary and lower paid than permanent positions. At BMW, the difference was $15 per hour compared with $15.50, Metcalf said. The company needs the flexibility to respond to demand, he said, and recently moved many temporary workers to permanent status.

While South Carolina’s private businesses have added employment, the state lost 15,700 government positions in the year ending in August.

Juanita Dixon, 33, lost her seven-year government job in February. A community-college graduate and mother of two, Dixon earned $10.25 an hour, paid vacation and insurance as a medical assistant at a county rehabilitation center. Budget cuts closed it, she said in a phone interview.

Five Applications Daily

Dixon put in five job applications daily, she said. When BMW’s staffing contractor held a job fair at a hotel, she applied and was told the wage was $13 an hour.

She passed a written test, but failed a physical one. “You have to put tires on a car, and you have to do so many in so much time,” Dixon said. “They said, ‘You can reapply in a year.’”

Dixon now works at Spartanburg’s new Adidas Distribution Center, earning $9 an hour doing factory warehouse work. She got the job through a staffing agency in September: “It’s a temporary job for three months,” she said.

When BMW arrived in the city, the look of the place was transformed, said Lounds, of Piedmont Community Actions. Factory workers tooled around town in cars bought with employee discounts.

“There were more BMWs around here than Fords,” she said.

Drawn by BMW

Out on I-85, BMW now employs 7,000, nearly twice the 4,000 promised in the 1990s, said Metcalf, the spokesman. The automaker attracted more than 40 suppliers to the state, spurred investment in the Port of Charleston and invested $750 million during the recession in Spartanburg, which now has 277,916 people, according to the census.

Yet the I-85 “autobahn” of industry didn’t materialize, said Holly Ulrich, senior scholar at the Strom Thurmond Institute of Government and Public Affairs at Clemson University.

“Those predictions were made during the boom years for South Carolina and the South, before a series of national economic catastrophes,” Ulrich said. “I haven’t seen evidence that it happened.”

On Sept. 27, five days after the census poverty numbers were released, the first-term Republican governor, Nikki Haley, tried to boost morale. She ordered state workers to change the way they answered the phone.

By the next morning, callers to an unemployment office in Spartanburg heard the new message: ‘It’s a great day in South Carolina.”

–Editors: Flynn McRoberts, Stephen Merelman

To contact the reporters on this story: Margaret Newkirk in Atlanta at mnewkirk@bloomberg.net; Frank Bass in Washington at fbass1@bloomberg.net. To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

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