During Economic Outlook Conference 2023, Ben Armstrong, Executive Director and Research Scientist at MIT’s Industrial Performance Center, shared his insights on the Charleston region, what drives the economy and opportunities to improve upward mobility for the middle class.

Three key takeaways Armstrong highlighted were: 

For decades, technology has outraced education and inequality has grown. A decline in middle-wage jobs can be linked to stalled upward mobility. 
Since 1980, real wages have risen for college graduates, while falling for workers with high school degrees or less. As advances have been made, manufacturing has become more reliant on technology, causing wage premiums for manufacturing jobs to decrease, which has negatively impacted individuals with high school educations or less more than it has impacted individuals with college degrees. As a result, the opportunity for upward mobility has decreased, while the gap between socioeconomic classes has widened.  

Charleston has a strong middle but suffers when it comes to upward mobility. Education and workforce development, plus social capital is associated with mobility. 
Data has shown that regions who focus on advanced technology manufacturing and high-performance public education have greater success when it comes to growth of the middle AND upward mobility. When public education is a focus, generations have a greater opportunity to participate in advanced education, leading to increased wage levels, in addition to gaining improved access to middle-wage jobs that technologically advanced manufacturers so desperately need. An additional key to upward mobility is the interactions between individuals in varying socioeconomic classes. Data shows that regions who are thriving often demonstrate an ability to interact and connect outside of individual classes, leading to the opportunity for greater upward mobility.    

Technology adoption, rather than innovation, can drive economic development. An adoption strategy can drive productivity and wage growth, particularly in middle-wage careers. 
Not all regions can be a Silicon Valley or Research Triangle, but many regions can adopt technology that has already been developed to aid in economic development. The Charleston region has an incredible opportunity as many manufacturers in the region embrace technology, but a challenge arises when it comes to educating, attracting, hiring and retaining a workforce who is able to make these technologies work for an organization. Strategies that include ensuring a strong educational base that matches the opportunities within a region and reducing limits of interactions between members of socioeconomic classes can dramatically improve the middle, while increasing opportunities for upward mobility, leading to a thriving community.  

In addition to Armstrong’s insights on the Charleston region, Professor of Economics at the College of Charleston, Mark Witte, Ph.D., provided the regional economic forecast highlighting expected changes in areas such as Labor Force, Unemployment, Retail Sales, Housing, Ports, Airport and Tourism. Three key points Witte provided insights on were: 

The Charleston housing market will not see much change over the next year.

Charleston has made strides in creating housing as the region’s population continues to grow. Even though steps are being taken, there are still challenges in having a workforce large enough to accommodate the construction at a rate that matches growth. In addition to this, fewer homes are being placed on the market as homeowners decide to stay put, rather than face the challenges of finding a new home at a higher interest rate. As home values have increased, it is not uncommon for homeowners to be unable to afford their current home and its current value, compared to when they first made the purchase.  

After record-setting years, travel and tourism’s economic impact is projected to level. 

Coming out of the COVID-19 pandemic, Charleston saw record-setting economic impact from travel and tourism. After hitting these milestones, key indicators, such as RevPar, are projected to level out with minimal growth. It is important to note that this is not necessarily a bad sign for travel and tourism, it simply means that we hit a peak. 

Challenges related to labor are anticipated to continue due to a lack of workforce.

In the next year, challenges in staffing are expected to continue as the number of workers will see gradual increases but will still not match the growth in demand. Unemployment rates are anticipated to be below 3%, leading to the conclusion that our region’s population is working, there just aren’t enough workers for the jobs that need to be filled. Jobs with an annual pay of $40,000 or less could face additional challenges in hiring. 

The data and insights provided by Armstrong and Witte made for a thought-provoking afternoon on learning and connections. The opportunities and challenges that face our region continue to get clearer as focus is placed on DE&I practices, education, workforce development and attainable housing but there is still plenty of work to be done to make the Charleston region an equitable place to live, learn and earn.   

Without the support of Chamber investors, events like the Economic Outlook Conference, Member-Bration, DE&I Conference and many more would not be possible. Thank you South Carolina Federal Credit Union for being the Presenting Sponsor of this year’s conference.

Interested in learning more about the economic future of our region? Check out the 2023/2024 Forecast Book, provided to all conference attendees.