New York Vs. South Carolina

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

CHARLESTON, S.C. — South Carolina has no Empire State Building, no financial district, and no Metropolitan Museum of Art.

Yet, for all of its handicaps, in recent years South Carolina has surpassed New York State in job creation. The Palmetto State’s best years are clearly ahead; the same observation cannot be made as confidently for the Empire State. Employers and other New Yorkers who pay high taxes and who are leaving the state know why.

Because its government spends and taxes less than New York does, and imposes fewer regulations on employers, South Carolina is producing more jobs. That simple message makes sense to South Carolinians, and it should make sense to Albany as well.

Although sectors of the New York economy that employ relatively few workers, such as finance and real estate, have generated substantial economic growth over the past five years, employment in South Carolina has grown by 8.1%, whereas employment in New York has grown by 3.3%.

Last week the Tax Foundation published its estimates of state and local tax burdens for 2008. New York residents had the second highest tax burden — all taxes, income, sales, property — in America, 11.7% of their income. New Jersey headed the list at 11.8%. South Carolina came in 37, at 8.8%.

South Carolina is a “right to work” state, which means that workers are not forced to join unions in order to work, and has no state minimum wage law.

Driving south on Interstate 95, 45 miles beyond the North Carolina border, an exit leads to “Honda Way.” That’s Timmonsville, home of a Honda plant, which opened in 1998 and now employs 1,750 people, with 2007 annual revenues of $244 million. It’s no accident that the Japanese automaker located its plant in South Carolina, not New York.

How can New York compete with a state that runs so much more efficiently? New York could imitate South Carolina and have a more efficient state government, with lower taxes and fewer regulations of employers.

Less obvious but perhaps just as effective in the long run, New York could vote to elect an American president dedicated to centralizing regulatory power in Washington and raising taxes on everyone.

To New York: Senator Obama may rescue you from your own mistakes and impose them on the rest of the country.

A careful reading of the draft Democratic Party platform, to be considered at the Democratic National Committee meeting on August 25, suggests that if Mr. Obama were elected, South Carolina’s employers would not find it easy to keep creating jobs. This is one more reason that Senator McCain might carry South Carolina.

One set of proposals in the Democratic platform calls for increasing worker pay and benefits, driving up employment costs, and discouraging new hiring. Among the planks:

  • Employers would be required to raise wages, such as the minimum wage and wages for women, who, the Democrats allege, are paid 78 cents on a man’s dollar.
  • Taxpayers would pay for increasing the Earned Income Tax Credit, transfer payments to low-income workers which give them relief from Social Security and sometimes income taxes.
  • The Family and Medical Leave Act, which allows 12 weeks of unpaid leave to care for a new baby or recover from a major health problem, would be expanded to cover domestic violence and sexual assault, meetings with children’s teachers, and care of parents, which it does already.
  • Family and medical leave, now unpaid, would be paid — by employers.
  • Employers would be required to give seven days paid sick leave to workers who are ill, or who care for a sick family member.

Another set of platform proposals addresses expansion of unions, a vital Democratic constituency, raising employer costs and lowering job creation. Among those planks:

  • Democrats want to pass the misnamed Employee Free Choice Act, which would take away workers’ rights to a secret ballot when they vote whether to join a union. Even a former Democratic presidential candidate, George McGovern, opposes this bill.
  • The platform opposes “right to work” laws in 22 states, laws that mean workers cannot be required to join a union or pay dues or equivalent fees as a condition of getting or keeping a job.
  • It opposes “paycheck protection” laws, which give workers the right to recover union dues spent on political activity.
  • Public-sector employees, including public safety officers, would have the right to bargain collectively, as they already do in some states.

The Democratic platform states “We Democrats want — and we hereby pledge — a government led by Barack Obama that looks out for families in the new economy with health care, retirement security, and help, especially in bad times.”

If Mr. Obama wins and the Democrats implement their platform, South Carolina and the rest of America need to watch out.

Ms. Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.

The New York Sun

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