S.C. Gov. Nikki Haley’s Real Economic Record: Corporate Subsidies Over Public Good

Washington, DC—As South Carolina Governor Nikki Haley prepares to give a major speech at the National Press Club, the AFL-CIO today released a fact sheet highlighting her real record on jobs and the economy. These facts reveal that most of her claims of success are actually attributable to national economic factors. The truth is her reliance on corporate subsidies has harmed the citizens of South Carolina, and she has squandered opportunities to create a secure middle class in a state that consistently has one of the highest unemployment rates and lowest health and education indicators.

Highlights of Haley’s real record:

Unemployment: Despite Haley’s five years of lavish economic development deals, South Carolina has one of the highest unemployment rates in the country. The state ranks 45th among U.S. states for unemployment as of July 2015—at which time its unemployment rate was 6.4%.1 Incremental improvements in the rate of unemployment in South Carolina are likely attributable to general economic recovery and were on par with improvements seen around the country.

Income: While nominal median household income in the U.S. has recovered to its pre-Great Recession levels, South Carolina’s median household income still trails its 2007 level.2 This suggests that Haley’s efforts to reward companies with taxpayer dollars isn’t trickling down to South Carolina’s working families.

Inequality: While Haley deserves praise for removing the Confederate flag from the State Capitol, this symbolic act should be accompanied by economic development policies that actually make the state a fairer place for African Americans to work. The governor and her commerce secretary target automotive and aerospace companies for incentive deals in South Carolina, but a shocking gap exists in earnings between African American and white workers in the state’s transportation equipment manufacturing industry. For example, white workers earned $1,685 more per month than African American workers in this industry in the state in 2013.3 (See chart at right for comparison 2010-2013.) 

Controversial economic development deals: And while Haley has supported the use of hundreds of millions in state bonds to fund profitable global corporations like Volvo, the state has cut funding, and Haley has opposed borrowing to help save the state’s only historically black public college,4 South Carolina State University, from fiscal insolvency.5 Volvo is Haley’s newest, most high-profile deal and is worth more than $200 million. The deal leverages $70 million in state surplus money for the incentive award, leaves $53 million to be financed through economic development bonds and could cost taxpayers $87 million in interest payments alone.6

Temporary employment: Greenville County, home to BMW’s U.S. manufacturing plant—recipient of $32.5 million in economic incentives during Haley’s tenure7 (and $286 million in total incentives from the state since 1992, in one of South Carolina’s largest economic development deals)—has one of the highest concentrations for temporary employment. In 2012, one in 12 workers in this county was a temp. A decade earlier, it was one in 22.8

Plant closures and layoffs: South Carolina’s approach to economic development—by winning “bidding wars” with other states—simply doesn’t make sense when companies leave or cease operations so frequently. According to WARN Act data, thousands of jobs have been lost to layoffs and closures in South Carolina during Haley’s tenure, many at companies that have received incentive deals.9 For example, Worthington Industries, which expanded with multiple incentives totaling at least $700,000, including a grant from the Governor’s Closing fund,10 in late March 2015 announced the closure of its engineered cabs facility and the layoff of 310 workers in Florence, South Carolina.11 Bose is sending 300 jobs to Mexico and Arizona this year, and 200 jobs to Mexico and Malaysia in 2012. Caterpillar sent 485 jobs to Griffin, Georgia, and Seguin, Texas.12

Attacks on funding for public education: South Carolina has cut funding by 41.6% per full-time student for four-year public colleges and universities since 2008, and it ranks third among the top 10 states with the steepest cuts to higher education (Arizona and Louisiana are ahead). Between 2008 and 2014, average tuition has risen by $1,732 for four-year public colleges and universities.13

South Carolina State University has struggled with graduation rates in particular; its four-year graduation rate was 13.7% for freshmen who entered in 2007.14 For freshman who graduated in a period of six years, the rate dropped from 53.8% in 2000 to 35.7% in 2007. South Carolina also ranks 46th in the nation for rate of high school graduation, at 72%.15

Dismal health care rankings: While Haley doesn’t hesitate to give generous handouts to companies, she has neglected to provide adequate funding to improve the dismal standing of health indicators among South Carolinians. The state’s overall health care ranking has consistently been in the bottom among U.S. states for years. Currently, South Carolina ranks in 42nd place in the 50 states. In the state, 16.3% of residents do not have health insurance, ranking it 38th in the nation. South Carolina rates particularly low—in the bottom 10 states—in the following health determinants: obesity, diabetes, infectious disease, low birth weight, and children’s immunizations. It ranks highest in the country for violent crime offenses.16

Ideological opposition to Medicaid expansion: Nonetheless, Governor Nikki Haley has opposed the expansion of Medicaid,17 which would allow over 200,000 people to gain health insurance in South Carolina.18 Medicaid expansion would be paid for by the federal government, not by South Carolinians, and ultimately would create thousands of jobs in South Carolina,19 according to the White House Council of Economic Advisors.20

Contact: Amaya Smith: 202-637-5018

1. State rankings include District of Columbia. http://www.bls.gov/eag/eag.sc.htm; http://www.bls.gov/web/laus/laumstrk.htm  

2. According to U.S. Census data. http://www.census.gov/hhes/www/income/data/statemedian/. In 2007, median household income for South Carolina was $44,213. In 2013, the most recent year reported, the amount was $43,749. In the U.S., 2013 household median income is $51,939, while in 2007 it was $50,233.

3. In 2013, African American workers’ monthly income was $4,162 compared to $5,847 for white workers. Taken from QWI Explorer application, U.S. Census Bureau, qwiexplorer.ces.census.gov, Indicator Earns—Full Quarter Employment (Stable): Counts, 2010-2013, Transportation Equipment Manufacturing.

4. http://www.southcarolinaradionetwork.com/2015/03/12/sc-big-story-deal-reached-on-fourth-day-of-budget-debate/; http://www.southcarolinaradionetwork.com/2015/06/01/sc-house-sets-aside-additional-220-million-in-surplus-funds-for-roads/

5. http://www.greenvilleonline.com/story/news/education/2015/03/08/sc-state-alone-among-hbcus-struggling-survive/24604755/South Carolina’s state government’s contribution to South Carolina State University has fallen in the past decade from 30% to 8% of its budget.

6. http://www.thestate.com/news/politics-government/politics-columns-blogs/the-buzz/article28546414.html#storylink=cpy

7. http://subsidytracker.goodjobsfirst.org/prog.php?parent=&statesum=&fedsum=&company_op=starts&company=bmw&free_text=&subsidy_level=&subsidy_op=%3E&subsidy=&face_loan_op=%3E&face_loan=&subsidy_type=&sub_year=&state=

8. http://www.propublica.org/article/the-expendables-how-the-temps-who-power-corporate-giants-are-getting-crushe

9. https://www.scworks.org/rapid7.asp

10. http://subsidytracker.goodjobsfirst.org/subsidy-tracker/sc-worthington-industries-engineered-cabs-l-0; http://subsidytracker.goodjobsfirst.org/subsidy-tracker/sc-worthington-industries-engineered-cabs-l 

11. http://www.bizjournals.com/columbus/news/2015/03/24/worthington-industries-cutting-555-jobs-including.html

12. http://www.wltx.com/story/money/2015/01/22/bose-corporation-to-shut-down-blythewood-plant/22164985/; http://onlineathens.com/local-news/2012-02-17/caterpillar-plant-will-bring-4200-jobs-24-billion-region

13. Information taken from Center on Budget and Policy Priorities, sources: State Higher Education Executive Officers Association, SHEF 2013, Illinois State University, Grapevine FY 2014; College Board, Trends in College Pricing 2013.

14. http://www.thestate.com/news/politics-government/politics-columns-blogs/the-buzz/article13943795.html#storylink=cpy

15. Taken from United Healthcare Foundation America Health Rankings report 2014. http://www.americashealthrankings.org/

16. Taken from United Healthcare Foundation America Health Rankings report 2014. http://www.americashealthrankings.org/

17. http://www.ontheissues.org/Governor/Nikki_Haley_Health_Care.htm

18. http://www.postandcourier.com/article/20150211/PC16/150219842/1006/null

19. http://familiesusa.org/product/expanding-medicaid-better-health-jobs-and-economic-activity-states

20. July 2014 analysis by the White House Council of Economic Advisors. https://www.whitehouse.gov/sites/default/files/docs/missed_opportunities_medicaid.pdf