We’re generally bullish on South Carolina’s economic development. Our main objection has been the secrecy that had defined industrial recruitment up until the appointment of Commerce Secretary Harry Lightsey, and the whole process still remains far from transparent. That said, Mr. Lightsey and his predecessor Bobby Hitt, in particular, have been rock stars at enticing A-list corporations to build new factories in our state, and bring with them lots of good-paying jobs.
Last year was something of an anomaly, though. Not so much because the job numbers fell — after all, we’ve got a really tight labor market, so you can understand why some businesses would want to relocate to a state whose unemployment rate is higher — but because of a diminished quality of industrial recruitment.
As The Post and Courier’s David Wren reports, by the metric important to state officials, Google was our top score in 2024, promising to spend $3.3 billion of the $8.2 billion worth of economic investments the state Commerce Department landed.
Our second-biggest recruit, by official reckoning, was AESC, which makes batteries for electric vehicles and announced it would spend $1.5 billion to expand its Florence manufacturing plant, which supplies battery components to BMW’s Upstate plant. (BMW, by the way, tied for third with Birla Carbon, each of which committed to investing $1 billion in the state.)
As you might guess, Google’s investments along with an $800 million promise by Meta made “information technology and computer equipment” by far our top industrial sector last year, far surpassing the automotive industry’s $1.3 billion and the aeronautic industry’s $1 billion. And that’s worrisome on several levels.
AESC and BMW — like a lot of the companies Mr. Lightsey recruited last year — make useful products and provide good jobs to South Carolina, without asking a lot in return, other than those tax-funded incentives that in the good deals more than pay for themselves over time.
Google and other information technology companies rushing to our state to cash in on taxpayer largesse, by contrast, ask a great deal: Their data centers suck up our increasingly scarce water supply and our electricity. Gobs of electricity.
Utility officials — who are campaigning to convince the Legislature that the world will come to an end if lawmakers don’t remove important consumer protections and allow them to build new generating capacity as fast as they can — admitted to state senators last year that about two-thirds of their expected growth in demand in the next decade will come from those data centers our state and local governments are luring to South Carolina.
The result, if the Legislature doesn’t demand otherwise, will be that power companies build new plants that will raise the power bills for the rest of us so they can sell cut-rate power to the data centers.
And this is what our state government spent its energy recruiting last year?
Maybe it would be worthwhile if we needed those data centers to be located in South Carolina — or if they brought a bounty of good jobs with them.
Google and Meta and other tech giants do need new data centers if they intend to keep force-feeding artificial intelligence on all of us, but South Carolinians will get our search results just as quickly whether the data centers are located in South Carolina or North Carolina or California.
As for jobs, the promise is not impressive.
To go along with its $1.5 billion investment, AESC plans to hire 1,080 people. BMW says it will create 500 new jobs with its $1 billion investment — not as many jobs per billion dollars, admittedly, but still none too shabby, and pretty good jobs at that.
Commerce Department figures show that Google, by contrast, will hire 200 people in its computer data centers.
Commerce officials have stressed in the past that incentives to lure the data centers to South Carolina are coming from counties, which don’t have the responsibility state officials should have to think about anything beyond what’s in it for them. And what’s in it for them is increased property tax revenue without having to provide many if any services … you know, since there’s so little employment involved.
But as long as the data centers are sucking up such disproportionate amounts of water and, more importantly, electricity, the cost to our state as a whole is tremendous.
Google’s position atop our economic development list in 2024 should underscore the imperative for the Legislature to prohibit any government or utility incentives for data centers. It also should send the Legislature looking for ways to ensure that the rest of us don’t end up subsidizing electricity for the data centers.
It’s one thing for consumers to have to subsidize electricity for BMW or Boeing or other A-list industries that are a net benefit to our state; it’s another thing — an unacceptable thing — to make us subsidize electricity for companies that do not benefit us.
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