Columbia, South Carolina (WIS) – Up to 80,000 workers are “missing” in the South Carolina economy, according to Dr. Joey Von Nessen. He has his Ph.D. He has a PhD in economics and was one of his speakers on Tuesday. USC’s 42nd Annual Economic Outlook Conference 2022.
He said about 60% of these missing workers in SC’s workforce are over the age of 55. His research found that many of these older workers were out of the workforce during the COVID-19 pandemic. He shared that many companies have leveraged strong 401k performance during exits.
The remaining 40% are estimated to have other types of financial arrangements, such as support from a spouse or other family members. He explained that this is a big reason for the current labor market shortage.
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Across the United States, the population is aging. Von Nessen said South Carolina is in serious trouble as it attracts retirees and further ages its population. During the conference, Von Nessen said the changing demographics of the population meant that the current labor market shortage he said was likely to last for a decade.
Another area experiencing unusual shortages is government jobs. City of Columbia Mayor Daniel Rickenman said local governments are struggling to recruit in both public administration and critical services such as law enforcement. He said there are hundreds of government jobs open in Colombia and thousands across the Midlands.
Rickenman said one of his administration’s economic focuses was finding ways to attract and encourage the region’s 60,000 students to stay. Another of Rickenmann’s areas of focus includes finding ways to modernize local tax laws to compete with areas like Charleston and Greenville.
Rickenman said part of his agenda includes making Colombia more attractive to visitors. He said about 45,000 recruits from Fort Jackson and other military installations support tens of thousands of jobs, and as many as 250,000 families visit the area, but on average he stays only three days. Is not … He said having visitors experience Midland’s businesses and attractions can help revitalize the local economy.
Looking ahead to 2023, von Nessen shared that economists project a greater than 50% chance of a recession over the next 12 months. “While South Carolina has the highest number of people working in its history and the economy is still doing well, there are some early signs that demand is starting to taper off,” he said.
Von Nessen and Doug Woodward, director of research and professor at the University of Southern California, said a recession was inevitable. It has a lot to do with how quickly inflation subsides. One of the tools the Fed used to keep it in check through 2022 was rate hikes. However, it will take 12-15 months for the full impact of the rate hike to be felt in the economy.
Another area of focus during the conference was the state’s employment rate. Total statewide employment increased to 102.8% in October compared to 2020. He said the state had largely recovered from job losses from early 2020, with overall employment rising to pre-pandemic levels. The current unemployment rate is 3.3% for him, and Von Nessen said the average unemployment rate in non-recession periods has been about 5% in the state.
Von Nessen noted that the $6 trillion federal stimulus package related to COVID-19 is causing strong consumer demand and inflation. He said he expects 2023 to be the year of revision. He explained that the market is now “economically unbalanced” with demand outstripping supply.
One of the most affected areas in South Carolina is the housing market. Mortgage rates have doubled due to steady increases in interest rates through 2022. Von Nessen said home sales across the state fell 23% this year.
von Nessen put the market in perspective. What we have observed in the last two years has not been sustainable. “
Woodward predicted that the state would be well positioned to handle the economic problems ahead. “South Carolina’s competitive advantage, if anything, has been enhanced by the pandemic,” Woodward said. He described the low cost of living, multiple natural amenities, and high population growth as strong indicators that the state can weather a potential recession.
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