The overall U.S. economy may be headed for the crapper, but today there were celebrations in South Carolina after BMW announced plans to invest an additional $750 million at its auto assembly plant in Spartanburg County and add 500 new jobs.
These days, any American job creation, especially in manufacturing, is going to be seen as good news. But BMW’s announcement cannot be seen as a vote of confidence in the vitality of the U.S. economy, Instead, it seems to be ploy to take advantage of the cheap dollar—and more importantly, cheap labor. Manufacturing workers in South Carolina earn only about one third of what autoworkers are paid in Germany, where BMW is simultaneously cutting employment by more than 7 percent.
Today BMW officials were praising South Carolina’s distribution infrastructure, but what they were really lauding was the anti-union climate in the state, where only 5.4 percent of manufacturing workers (and none at BMW) are represented by union contracts. Cheap labor and weak or non-existent unions: the U.S. South is looking more like the Global South all the time.
Another similarity is compliant government. Ever since the early 1990s, when BMW chose South Carolina as the location of its U.S. assembly operation, the state has been more than accommodating. The German company was given some $150 million in tax breaks and other subsidies in connection with its initial investment, and its subsequent expansions have been rewarded with many millions more in giveaways. BMW said today it may yet seek job development tax credits in connection with the new expansion. The company is apparently so confident of getting what it wants that it doesn’t bother nailing down the details ahead of time. That’s [Global] Southern hospitality.