Michael Johnson, CEO
When you go into a restaurant, you read the menu to determine your entrée selection based on taste preference and price. Let’s say you are interested in the “Blue Plate Special,” and the menu indicates the price is $5.00. Being satisfied with the food and price, you order the “Blue Plate Special.” When it arrives, you add salt, pepper and hot sauce that are sitting on the table to accent the flavor of the plate. After eating your meal, you walk up to the register to pay your bill and the cashier informs you the price is $20.00. You stand in astonishment with only $5.00 in your wallet for lunch and tell the cashier that is incorrect. The cashier responds, “Well, recently the town council voted for our restaurant to improve the selection of condiments on the table and consequently, the prices have gone up.” You respond, “Condiments?” The cashier says. “Sure, the salt is from China, the pepper is from Mexico and the hot sauce is from Malaysia. Weren’t they delicious?” “Well, I guess so, but I have never had to pay for those condiments before,” you reply. The cashier extends his hand with a measure of finality and states, “Either pay up the extra money to get our restaurant out of debt from purchasing these condiments or face the local authorities.” As you fork over all of your cash, knowing this will preclude you from eating dinner or breakfast you say, “Maybe, I should take my restaurant business to another town where the town and restaurants take responsibility for their own decisions.”
This is exactly what is happening with unemployment insurance in South Carolina right now. Industry sat down at the table, ate their meal and is now being expected to pay much more than they were originally told because the laws governing unemployment insurance were poorly written to begin with. How is that businesses are being charged with malfeasance when they did not write the laws, they only abided by them?
This scenario goes without saying, there are bad businesses that unnecessarily dumped the proverbial salt, pepper and hot sauce on the floor just to use up a resource that costs them nothing, but most do not behave in such a manner. Cox Wood Preserving has paid into the unemployment fund for as long as we have been required and done so without question or complaint. In fact, Cox Wood had largely avoided lay-offs up until the housing market plunged almost 80% from January of 2006 until February of 2011. However, during these times, we did change our business model and were required to release some permanent employees for the 
long-term survival of the business. In doing so, we were happy that these employees (all of which who received severance) were able to collect on the unemployment benefits they were entitled to as they sought gainful employment elsewhere. Through this, Cox maintained a positive balance in their paid-in reserve fund. That is correct, the balance in our government-held reserve fund exceed the benefits that were paid out during this difficult time. Despite our responsible use of this social safety net over the past 57 years we have been in business, we, as one of many businesses with employees, were charged by the State to fully repay the entire debt owed to the Federal government in a period of time mandated by more legislation. While Cox does not mind picking up this burden of the State, to be vilified by the careless stereotyping of some outspoken parties is very disheartening.
Another point worth noting is those required to repay the $1,000,000,000,000.00 (Yes that is $1 Billion), are not the 4,500,000 citizens of South Carolina, rather it is the couple thousand individuals that are owners of these businesses. Cox Wood Preserving employs about 125 team members that live and work in South Carolina. We have 37 shareholders. As we received the notice of our increase in early April, the first matter we had to cover was the fact that the legislation was retroactive to January first so we had a one-time fee of approximately $60,000.00; from an ongoing basis, our cost per employee increased from $86 per employee to over $600 per employee. (If you are up on the legislation, we fall in category 14 out of 20.) I remind you that we paid more into the system than was taken out over the past 7 years. In fact, we have paid much more into the system, but the South Carolina Department of Employment and Workforce only has records going back 6 years. Interestingly enough the legislation that exists now actually took thousands of small employers (less than 5 employees) off of the tax rolls and shifted the burden to the remaining businesses. Again, this article is not a complaint about businesses taking South Carolina up on their shoulders and carrying them through this repayment of debt. This is simply about the political demagoguery that is demonizing businesses for expecting to pay what was on the menu. What if the South Carolina businesses decided to take their businesses elsewhere? What if they decided China, Malaysia or Mexico were less expensive options?
I applaud those individuals serving in our State Legislature. They make tremendous sacrifices to serve our State and they are faced with difficult decisions every day. They recently had to decide how to handle the 1,500 potential jobs brought to our State by Amazon. Many of their constituents would have appreciated the jobs; many felt it was necessary to make a statement about State incentives. Each Legislator had to cast their vote and stand by their decision. This will be a similar case except my hopes are that each can cast their vote to structure the best repayment plan without demonizing the very businesses that pay the taxes that keep our Great State solvent.
Finally, thanks to Governor Haley for her stand on not borrowing more money and getting our debt paid down and the legislators that recognize businesses’ willingness to work for a better South Carolina.
Also, as a late note, the $100,000,000.00 that was recently introduced as a piece of Scenario 34, is not bad for South Carolina, nor is it a “bailout.” This unconventional re-investment is needed to encourage South Carolina businesses to keep fighting for growth.
Mikee Johnson
CEO & President
Cox Industries
Cox Industries Inc. Blog 