The issue ~ Unemployment numbers

Our opinion ~ Computing jobless rate not Commerce’s mission

During his successful re-election campaign in 2006, Republican Gov. Mark Sanford took lots of heat from Democrats for the state’s high unemployment rate. Foes said the governor was out of touch with the problems of the average South Carolinian in citing economic progress amid hard times for so many.

Voters decided upon Sanford, who throughout the campaign cited record job creation in the state and continued to criticize the state’s unemployment calculations as flawed.

The issue arose again in late July with release of June’s unemployment number, which at 5.5 percent was fifth-highest among the states.

On the same day the numbers were released, Sanford by executive order made the controversial moves of pulling programs that collect jobs data and help workers displaced by international competition from the state Employment Security Commission and putting them into his cabinet under the Department of Commerce.

Sanford reassigned some functions of Labor Market Information, which collects and provides economic and work force information. LMI also generates the monthly unemployment statistics. Also shifted was the Trade Adjustment Assistance program, which helps those who have lost their job because of global competition find suitable long-term employment as soon as possible.

Moving the two programs under the umbrella of the Department of Commerce will create clear lines of executive accountability and increase coordination by placing them alongside the Workforce Investment Act program, which is already housed in Commerce, according to a Sanford statement.

The moves came as a surprise to the leadership in the Employment Security Commission and to lawmakers. Even the likes of Republican House Speaker Bobby Harrell questioned the shift.

Sanford soothed critics by clarifying that the collection of jobless data would not be part of the moves.

Yet even in saying collection of jobless data won’t be shifted, Sanford spokesman Joel Sawyer told The Associated Press the changes are “about a coordinated approach to economic development and making sure that we have the right numbers and right information to coordinate these efforts.”

That reads a lot like further questioning the validity of the numbers.

In the face of job growth, high unemployment has been blamed on the rapid loss of jobs in the manufacturing sector, particularly textiles. Sanford himself has cited population growth as a factor, with job creation being unable to keep up.

Economists have doubted the latter theory, with those such as Frank Hefner of the College of Charleston saying the more likely scenario is that more South Carolinians are looking for jobs. During economic downturns, people give up looking for work, but when the economy picks up, they re-enter the labor market. For example, a family might decide to have two working parents instead of one, he has said.

Beyond the theories, the more important point made by Hefner previously to The Associated Press pertains to the political nature of the unemployment numbers. “The unemployment number is a politicized number. Politicians live and die by it. As an indicator of the economy, I’ve ignored it for about 10 years. It just doesn’t do much for me.”

The Department of Commerce under Sanford’s administration – and previous governors – has seen its numbers doubted, particularly with regard to development investment in the state. The department measures investment largely based on announcements, not on how many projects come to fruition and/or reach their projected scope.

Commerce’s mission of economic development is political enough as it is, with so much of a governor’s success or failure being measured by economic development. The Employment Security Commission’s responsibility is individual employment or benefit assistance. It should continue to track the state’s jobless rate.

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