Nikki Haley's troubled economic record in South Carolina
The Republican Party's decision to tap South Carolina Gov. Nikki Haley to offer the rebuttal to President Obama's State of the Union address this week is a sure sign that Haley's political star is rising.
It's not difficult to see why the GOP chose Haley: While GOP front-runner Donald Trump makes headlines for his speeches bashing immigrants — antagonizing large swaths of the country's increasingly diverse electorate — Haley is the daughter of Indian immigrants and was elected in 2010 as the first non-white governor of South Carolina, a symbol of the changing South.
Haley is the youngest and one of the most popular governors in the country. As U.S. House Speaker Paul Ryan gushed on CNN, "If you want to hear an inclusive leader who's visionary, who's got a path for the future, who's brought people together, who's unified, it's Nikki Haley."
When it comes to Haley's record as a government executive, however, the picture gets more cloudy. Above all, Haley has made bringing jobs to the Palmetto State her political calling card. In her 2014 re-election ads, Haley called her economic development policy "magic." As she declared in her 2015 State of the State address:
South Carolina continues to be a major success story when it comes to recruiting jobs to our state. We make it very clear to the companies that choose to invest here that they are joining our South Carolina family.
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TRANSCRIPT: SC Gov. Haley’s State of the State speech | The State
In her speech, Haley offered a roll call of 12 business leaders "from all across the world" who had recently added jobs in the state, examples of Haley's aggressive recruiting efforts to lure companies and expand existing businesses.
It's true that, as in most other states post-Great Recession, there are more jobs in South Carolina than when Haley took office. Unemployment has fallen from 11 percent in early 2011 to 5.5 percent today — although the jobless rate is still 15th-highest in the country, and the rate for the state's African-American workers is nearly twice that (9.9 percent).
But Haley has come under growing criticism for South Carolina's "low road" economic development approach, a strategy that lavishes millions of dollars in giveaways to companies for low-paying jobs that keep many working families mired in poverty. Among the costly downsides of Haley's low-road economics:
1) GIVEAWAYS COSTING BILLIONS OF DOLLARS: Under Haley, South Carolina has slashed college spending per student by 38 percent, and in 2014 the state Supreme Court found the state had failed in its duty to provide "minimally adequate" education to children in poor school districts.
But the state has not been stingy in doling out tax breaks, grants and other incentives to recruit businesses. In 2013, The State newspaper estimated that the price tag for incentive deals for just four companies — BMW, Boeing, Bridgestone and Michelin — totalled $800 million, or about $100,000 for each of the 8,000 jobs created.
The State further reported that the four companies "also have contributed almost $600,000 to the campaign coffers of S.C. politicians, political action committees, political parties and caucuses, S.C. Ethics Commission records show," and another $228,000 to the operating funds of the state parties.
The latest high-profile deal championed by Haley, bringing a Volvo plant to the state, had a reported price tag of $70 million of state "surplus" money and a remaining $53 million through economic development bonds. By one estimate, the deal could cost taxpayer $87 million in interest payments alone.
The generous taxpayer giveaways haven't always meant loyalty to South Carolina. According to the group Good Jobs First, Worthington Industries, which received $700,000 worth of subsidies in 2013 and 2014, in March 2015 announced the closure of its engineered cabs facility in Florence, South Carolina, causing them to lay off 310 workers.
2) LOW-PAYING JOBS AND ECONOMIC INSTABILITY: The bulk of new jobs in South Carolina aren't good-paying jobs. A 2015 report by the Alliance for a Just Society found that 57 percent of new jobs in South Carolina paid less than $15 an hour — one of the highest rates in the nation and well above the national average of 48 percent.
The low-road, cheap labor approach to job creation leaves many South Carolinians stuck in poverty or near poverty. South Carolina's median household income in 2014 stood at just $44,929, a 13.8 percent drop from its peak in 1996. The state ranks 16th in the country for highest percent of people living in poverty (15 percent) and fifth in the nation for child poverty (27 percent).
The ubiquity of low-paying jobs isn't an accident: In a 2014 interview, Haley famously declared that not only was she opposed to workers forming unions, but implied her administration would actively discourage companies from coming to South Carolina if they were open to unionization:
We discourage any company that has unions from wanting to come to South Carolina because we don't want to taint the water ... [W]e educate different companies coming in from outside to understand that's not what we want to do in South Carolina; and if they're interested in that, we're not where they need to come.
3) LOWER QUALITY OF LIFE: Together, shortchanging public investment and encouraging low-paying jobs contributes to South Carolina ranking near the bottom nationally on a host of indicators of health and well-being.
For example, in its 2015 report ranking states on health statistics including infant mortality, drug deaths, preventable hospitalizations and a host of other measures, United Health Foundation found South Carolina ranked as the ninth-most unhealthy state.
Ironically, if South Carolina's leaders committed to creating higher-paying jobs, it would lessen the burden on government programs they routinely criticize. For example, a Center for American Progress report in 2014 concluded that more than 57,000 South Carolinians would not need to rely on the Supplemental Nutrition Assistance Program if the minimum wage in the state was lifted to $10.10 an hour.
Republicans are putting Haley forward as a new, fresh face for the GOP of the future. But in the South, the core of her economic vision is eerily familiar: a low-road approach that, when measured by indicators of shared prosperity and well-being, has had a high cost for working families.
