BEA: Revenue projection down, unemployment likely to worsen

It was not a pretty picture painted by the South Carolina Board of Economic Advisors Tuesday. State government faces yet another drop in revenue this year, according to projections. This fiscal year ends June 30th, 2010. The Board is now projecting a two percent revenue drop, $5.75 billion to $5.619 billion.
Board Chair John Rainey says a meeting with leading economists a couple of weeks ago revealed that none of them were optomistic about the current state of the economy.  “There was not one who was optimistic,” said Rainey.  “Most years we have some that are optimistic, some pessimistic, and some who fall in the middle.  At that meeting there were all pessimistic and their numbers were pretty much the same.”
Rainey says there is a general concensus that the real unemployment rate is around 20 percent–meaning the posted rate of 11.6 percent, with the addition of those residents who have given up, and those who are underemployed. Rainey says that “real unemployment” figure on the national level is 17.5 percent.
Rainey says employment picture will likely worsten:  “At least one economist felt that the real unemployment rate will grow to 24 percent by June and that the Unemployment Security Commission’s posted figure will be about 13 percent by then.”
Rainey says unemployment in South Carolina is definetly growing, not standing still.  And he says the drop in funds which the state has available is major.
“We’re down from $7 billion plus, down to $5.6 billion, which, unless things change, will be the figure for the next fiscal year,” said Rainey.  “That’s almost $1.4 billion, a hugh decrease.” 
Rainey says even though there has been a loss of productivity throughout the workplace, corporate earnings continue to improve.
“So you’ve seen companies where there were four people working in a department now getting along with three people,” said Rainey.  “That has caused productivity to go up, because you have fewer people producing the same amount of goods and services.  There’s not much incentive for corporations to hire those people back as long as the people they kept are producing as much or more as before they made the layoffs.”