The Darla Moore School of Business at USC held its 30th annual economic outlook conference Thursday afternoon, December 9. The day’s keynote speaker was Zoltan J. Acs, university professor at the School of Public Policy and director of the Center for Entrepreneurship and Public Policy, George Mason University, Fairfax, Virginia. Host economists were Doug Woodward, professor of economics, and Joey Von Nessen, research associate—both at the Moore School.
Woodward and Von Nessen predicted modest growth for the coming year in South Carolina, but the bulk of the gain could be expected in the three major urban areas: some in the Midlands but most in the Lowcountry and the Upstate. State government budget cuts and low revenues likely will carry into the next year and check growth in employment in the Midlands. Rock Hill, essentially suburban Charlotte, should also see some gains in the coming year based on the rosy Charlotte projections.
While job growth statewide crept along at a rate of 0.1 percent for 2010, for the coming year the two economists projected a jobs growth rate of 1.2 percent. But even at that improved rate of jobs’ growth, the state can’t be expected to return to pre–recession employment levels until 2014.
Woodward shared his optimism based on the continuing weakness of the dollar. As the dollar stays down, tourism should pick up. That’s true for manufacturing, too, in that a weak dollar keeps domestic products cheap for export.
But between the two, tourism and manufacturing, the latter is more economically desirable because it tends to pay more. Changing sheets, waiting tables and tending bar, all fall below typically highlevel manufacturing wages.
Acs took the lectern for the last presentation of the afternoon. His talk, “Job Creation and the Great Recession,” made it clear that the economy needed a much bigger bounce than it can expect from the anticipated extension of the Bush tax cuts under debate in Congress. Acs and most American economists are saying the extension of the tax cuts can’t deliver more than maybe a half–percent lowering of the unemployment rate. Acs argued for something far more forceful, something that would “put 10 million people back to work.”
The Small Business Administration, where Acs had been chief economic advisor, defines a small business as having fewer than 500 employees. There are five million such businesses in the U.S.A., while the country has only 18,000 businesses with more than 500 employees. Consequently, half of Americans work for small businesses.
Acs praised Congress for the $40 billion jobs bill it passed in September. It got money to community banks and then passed it through to small businesses. One small problem, as Acs put it, was that the $40 billion was too small of an infusion, especially when the whole economy, all $14 trillion, is taken into account.