By Dennis Quick
Senior Staff Writer

At the 2003 South Carolina Economic Outlook Conference in Columbia, financier Darla Moore and Harvard economist Michael Porter pounded this message into our heads with hammer-like bluntness: We must raise South Carolina’s per capita income if we are to compete in the global economy. Their message triggered economic development studies and strategies to fatten our paychecks. After all, the average annual income in South Carolina was (and still is) about 20% lower than the national average.

We’ve been told that to increase our per capita wealth we must lure and create jobs requiring brains rather than brawn. It’s those brainier jobs that provide the higher-paying salaries and form the essence of a “knowledge-based industry”—a favorite phrase that is buzzing around.

Another buzzword flitting about the economic lexicon for several years now is “clusters,” as in clusters of related businesses.

Porter strongly advised South Carolina to create clusters, as did a study by Austin, Texas-based AngelouEconomics, which recommended to the Charleston Regional Development Alliance what clusters the Lowcountry needs to develop.

The seven hotels slated for North Charleston certainly beef up our already beefy hospitality cluster. But that’s not the kind of cluster AngelouEconomics suggested we develop.

The clusters AngelouEconomics targeted for us are biosciences, aerospace, automotive, creative industries and advanced security.

Jobs in those clusters pay well, usually in the $50,000-a-year and up range. Hotel porters, housemaids and busboys—the bulk of the hotel workforce—barely earn enough to afford a car.

In fact, many of them are forced to take the bus to work because they can’t afford wheels.

Baggage porters and bellhops, for instance, earn an average annual salary of $16,710 in South Carolina, according to the 2004 Bureau of Labor Statistics. The least expensive new car for 2005 was the Chevrolet Aveo with a sticker price of $9,995, according to online car-shopping guide edmunds.com.

North Charleston currently has 18 hotels. The seven new hotels will increase the city’s number of hotel rooms by 28%, bringing the total to 3,330.

Now, of course, there are positive sides to this.

The hotel boom shows North Charleston is bustling. There’s going to be lots of building going on, local contractors presumably will be getting a piece of the action and workers will be spending at least some of their paychecks here. And the city will be getting more tax revenue.

Also, more hotels in the area mean more meeting space, meaning event planners can book more and larger conferences and get-togethers in the Lowcountry. That translates into more folks coming here and spending money.

However, the downside is, well, more hotels. How many more do we need before we get smothered in a glut?

The hotel deluge reinforces the same-old economy and the same-old mindset. Yes, those seven new hotels mean seven more employment centers, but that also means seven more groups of bellhops and busboys and maids and other workers who most likely will not become homeowners, car owners or asset accumulators.

Imagine if, instead of seven new hotels, seven biotech or engineering or other such brain-based companies were coming to North Charleston. That would be cause for a party.

DEVELOPMENT DOLLARS. At a March 16 luncheon sponsored by the Charleston Trident Home Builders Association, economic development consultant Jerry Walker reviewed the study he and his Austin, Texas-based research firm, Impact Datasource, conducted about the local economic impact of new housing developments.

Released in February by the Charleston Trident Home Builders Association, the Charleston Trident Association of Realtors, the South Carolina Association of Realtors and the Home Builders Association of South Carolina, and covered in the Business Journal’s March 20 issue, the study measured the local economic impact of 1,091 homes in six new South Carolina subdivisions, two of which are in Berkeley County. The other subdivisions surveyed are in the Midlands and the Upstate.

Walker pointed out that the new subdivisions pay for themselves, with each new home generating an average of $1,412 in excess tax revenue per year. Also, the new subdivisions added 1,448 jobs to their local economies. That’s the kind of information builders and developers need to be armed with when they face opposition from folks fearing the costs of new residential neighborhoods.

Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.

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