Unemployment has fallen – but why?

 

Well, we’ve seen an uptick in employment, or a downtick in unemployment – however you want to think about it. With an unemployment rate of 8.9 percent, South Carolina now ranks at number 42.

Over the next several weeks, therefore, you’re likely to hear South Carolina politicians crowing about how their efforts at job creation are finally paying off. For the last few years, you’ve heard about a lot of “economic development” programs designed to create jobs – especially “high paying jobs” associated with something called the “knowledge economy” – and now those efforts are bearing fruit. So you may hear.

The trouble is that when you take a closer look at the new employment numbers, what you find is that the growth occurred in two main areas: (1) government and government-related fields, and (2) leisure and hospitality. In other words: we got a better employment picture – at least in large part – because government grew and it’s almost summer.

Last month’s total increase of (non-farm) jobs is 17,100. Of that number, 8,400 was in leisure and hospitality, which, according to the Department and Employment and Workforce, “was concentrated in the Food Services and Drinking subsector”: that is, bars and restaurants. The other big numbers are in “Trade, Transportation, and Utilities” – 3,800; and government itself – 1,400.

With apologies to our elected officials, that doesn’t leave a lot of room for grand claims that their efforts in economic development are paying off. And with all due respect to those in the Food Services and Drinking subsector, we can only hope state government isn’t spending around $300 million every year on “economic development” – and handing out untold millions in taxpayer-financed incentives to private companies – in order to boost the number of people employed by bars and restaurants. (Nor, by the way, can we safely discount the possibility that this latter trend may be part of a deeper problem: chronic underemployment. When people can’t find employment in their chosen fields, they often seek work in the food and hospitality sector.)

With all that in mind, we’ve supplied two pie charts below. Both reflect the new employment numbers. The first is based on the categories supplied by government sources. The second is what we regard as a more accurate picture: the pieces of the pie in red are government or government-related jobs.

Enjoy.

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