Pee Dee textile company faces closure over high unemployment taxes

The owner of a textile business in Williamsburg County says he's survived difficult times in his industry that caused others to shutdown, but he's not so sure he can survive the state's new unemployment tax rate.

Jack Marsh has been the co-owner of Hemingway Apparel since 1978. They make T-shirts, undergarments and clothing for the federal government.

He's gone through good and bad times in the textile industry. Marsh says, like other textile mills, he's been hurt by NAFTA, the North American Free Trade Agreement.

In 2009, Marsh was forced to lay off about 110 workers when he lost a major contract to an overseas factory.

He now employs about 50 people. "It was hard," he said, "A lot of the people had been here for years."

He's still trying to rebuild his company but is facing another obstacle, and this time it isn't off-shore.

"Our biggest competitor today is the government," said Marsh.

Marsh is upset over his unemployment tax bill from the State Department of Employment and Workforce. The tax is paid by employers to cover the cost of unemployment benefits to laid-off workers.

In 2010, Marsh's bill was $11,000. In 2011, it rose 463%.

"I was shocked. We knew the base was going to increase we did not know the rate was going to increase. When you put them together our tax bill with the 50 employees we now have moved from $11,000 in 2010 to $51,000," said Marsh.

State lawmakers raised unemployment taxes through General Assembly Bill 391 in an effort to back the nearly $1 billion they borrowed from the federal government in 2008 to pay unemployment benefits.

State employment officials base the tax increases on 20 possible categories on the employer's usage over the last 7 years.

Hemingway Apparel is ranked at category 19, which means Marsh has to pay about $1,016 on the first $10,000 of employee wages.

"I look at all these employees like family because they've been here so long, and to me, if I can find a way to keep the doors open that what I'm going to do. But I think only time will tell," said Marsh.

He says the last thing he wants to do is to send any of his workers to the unemployment lines because it would be devastating to their families and finding another job in the textile business is no walk in the park these days.

"That would hurt my family. It probably would hurt all our families. we need our jobs," said Hemingway Apparel employee Penny Humphries.

"What we need to be doing right now is adding people," Marsh says, "Our politicians talk about we got to create jobs, but how can we continue to create jobs when we are burdening America's businesses with taxes this regulation, that regulation. Our biggest competition today is always the government."

Marsh says he has his workers at heart and that's why he's fighting to have his tax bill reduced, and in the meantime he's trying to find other cost cutting measures within his company.

To read how the increase in state unemployment taxes is affecting tourism related businesses, we have a recent story here.