Jobs recovery: a tale of two Georgias, part 2

Last week, I posted Jobs recovery: a tale of two Georgias, detailing the mounting evidence that job creation in the state has been disproportionately fueled by the Atlanta metro area and a handful of other nearby metro areas.

That post used data from May’s survey of payroll establishments. That’s the data used on the national level to determine job growth (or loss) each month. The unemployment rate is determined by a different set of data: a survey of households to see who claims to be working, looking for work, etc. Those numbers for May were released this past Thursday by the Georgia Department of Labor.

Sometimes the two data sets diverge dramatically. The payroll jobs estimate shows Georgia gaining a net 34,000 jobs from May 2011 to May 2012, while the household survey shows almost 63,000 more employed persons. The divergence is in part due to the broader definition of “work” in the household survey, which includes agricultural work, unpaid work, self-employment, and other categories that aren’t counted in the payroll survey.

Over time, the month to month inconsistencies in the surveys tend to level out.

Assessing the data is all the more difficult because of seasonal adjustments. Employment follows clear seasonal trends, which economists smooth out with adjustments. The Georgia Department of Labor uses seasonal adjustments for the statewide unemployment rate, but not for the rates for individual metro areas or cities.

Anyway . . . on to Georgia’s data for May from the survey of households, on which the unemployment rate is based. I’m going to use numbers that are NOT seasonally adjusted. If you want to look at some of the numbers yourself, start at the landing page for Georgia’s most recent data.

Georgia’s civilian labor force increased by 31,208 from May 2011 to May 2012, considerably less than we would expect given current population growth. The declining labor force participation rate is a bad sign, although it could in part be due to increased retirements and to more workers returning to school. But 62,902 more Georgians aged 16 and over reported themselves to be working compared to a year ago, a decent increase. The two numbers combined to cut the state’s NSA unemployment rate from 9.6 percent in May 2011 to 8.9 percent in May 2012.

The following metros saw an increase in the number of employed persons compared to a year ago:

  • Albany +879
  • Athens-Clarke County +4,042
  • Atlanta +40,702
  • Brunswick +1,020
  • Columbus +2,663
  • Gainesville +6,074 (amazingly good growth)
  • Macon +2,601
  • Valdosta + 1,543
  • Warner Robins +402

Warner Robins and Albany showed job losses in the payroll data, so this is encouraging news. The employment picture also looks more vigorous here for the rest of these metro areas. Let’s hope that in the coming months the payroll data will catch up to these numbers.

The following metros saw a decrease in the number of employed persons in May 2012 compared to May 2011:

  • Augusta-Richmond County -5,509
  • Dalton -3,391
  • Hinesville-Ft. Stewart – 168
  • Rome -511
  • Savannah -2,048
All five of those metros also saw significant declines in the civilian labor force. Here in Savannah, for example, there were 2,414 fewer participants in the labor force over the past year, so the unemployment rate actually declined from 8.5 percent to 8.4 percent despite the fact that fewer people reported working. Rome’s and Dalton’s unemployment rates declined too, despite the dreary numbers.

By contrast, Atlanta saw the civilian labor force increase by 20,085 (less than we’d expect given population growth). But the increase in employed persons was twice as great, bringing the Atlanta metro unemployment rate from 9.5 percent in May 2011 to 8.6 percent in May 2012.

Georgia’s a big state, so it’s not surprising that some areas would be showing some real gains while others are still shedding jobs. But I’d sure like to see forthright discussion about those differences and the possible implications for public policy.

14 comments

  1. saltycracker says:

    “Implications for public policy” ?
    Based on questionable stats ?

    Civilian excludes the military & institutionalized but not public worker numbers.
    Why not show public & private categories seperately ?
    Don’t think you intend to drive all numbers ahead of private employment do you ?

  2. Bill Dawers says:

    All these numbers are estimates, just like every month. They are subject to significant revision and obviously can contain errors. But the numbers come from a methodology used across the nation by economists and bureaucrats who have been collecting the same information using the same terminology for decades. This is the best data we have. If we aren’t going to make public policy decisions using this employment data, then we’re flying pretty much blind.

    I’ll take a look at public sector vs. private sector employment in a future post. This has been the only post WWII recovery that has seen a decline in public sector employment — entirely due to state and local cuts. A good post from Calculated Risk: http://www.calculatedriskblog.com/2012/03/year-over-year-change-in-public-and.html I wrote about it a little bit here: http://www.billdawers.com/2012/03/18/job-growth-public-sector-vs-private-sector/ The WSJ had an interesting blog post recently: http://blogs.wsj.com/economics/2012/05/08/unemployment-rate-without-government-cuts-7-1/

    Just one quick data point from the payroll surveys: Georgia had 675,200 government employees (all levels of government) in May 2007 and 671,100 in May 2012. The population of the state has probably increased about 6 percent in that time.

    • saltycracker says:

      Thanks. I’m not questioning policy decisions based on employment as much as consideration of public vs. private. Being the only decline since WWII while debt continues up over $15 trillion and future obligations/pensions are frightening suggests lot more is needed.

      One change could account for more than all your drop in govt workers. In 2007, there were 2,453 active duty soldiers and 3,784 civilian employees at Fort McPherson and Ft. Gillem – don’t know how many of the 6,237 (public workers) are still around.

      A public count drop of 0.6% (4,100) is basically unchanged when property values (household net worth) have plunged and the economic changes since then call for a bit of belt tightening.

      Actually, even with a population increase of 6% and the need to govern more efficiently we should expect a significant reduction in those public numbers. Fertile ground for a plethora of public policy changes.

      • Bill Dawers says:

        I’ll work up some numbers after Georgia’s June payroll employment estimates are released in a few weeks. It’s certainly my impression right now that Georgia’s private sector employment has been hurt more than in the nation as a whole while public sector employment has been hurt less than in the nation as a whole.

        Federal employment — which would include the defense workers you mention above — has actually increased in the state over the 5 year span. Dept. of Defense employment in Ga. has increased almost 8,000 in that time.

        Something else worth keeping in mind: about half of the public sector employees in Ga. work either in local or state education. Some percentage obviously work in public safety and public health. Some work in state social services offices. There’s increased demand for all those things as long as the population is growing. And to some degree that demand has been intensified by the weak economy.

        • saltycracker says:

          Yes the anedoctal stories from our public worker side of holding on to people is startling.
          Got a fun idea – let’s take a look at all Georgia public jobs paying over $200k
          – consider the assignment or even the entire dept./agency for consolidation –
          – take 60% of the salary of the reduced and use it to hire front line needed workers –
          – let’s use a $40K employee for example –
          – like, lots of folks are staying home seeing GA but the parks & areas like Lake Lanier have seen oversight cutbacks – A $200k job could be replaced with (60%= $120k) 3 workers –

          We have a lot of high paid folks with duties to select someone or some company to do the task, cut that staff –
          – cut 3 from the teacher’s pension admin, save a million & hire 15 folks interacting with the citizens of GA –
          – cut 4 from the AHA, save a million and hire 15

          Just think how many could be added to address the rampant fraud in govt programs !

          Math can be different, but you get the idea….of course if you complain over the benefit costs we can come up with some solutions for that – like work beyond early 50’s, no double dipping..

          Then move on to fun things like – no tax payouts below Zero paid in – overhaul the tax codes –

  3. Dave Bearse says:

    The recession hit Atlanta much harder than the rest of the state. The numbers represent a returning to the pre-recession pattern, with metro Atlanta unemployment headed to be lower than the rest of the state and metro Atlanta driving statewide employment.

    I assume these are metropolitan statistical area (MSA) numbers. MSAs are geographically much larger than many people think. Gainesville, Rome and Warner Robins on the fringes of larger MSAs are the only one county MSAs in Georgia. The Augusta and Columbus MSA each consist of six counties, including two each in neighboring states. Many think of the 10 ARC counties as metro Atlanta, but the Atlanta MSA consists of 28 counties.

    The pattern is returning, so expect the public policy to return too. Tax transfers from metro Atlanta to rural Georgia. Not that I’m against this transfer. And it’s another enlightening demonstration that many GOP so-called principles aren’t principles at all. They’re simply arguments to be taken up or discarded as suits assimulation and exercise of GOP power.

    The GaGOP bemoans local government tax transfers (within Fulton and DeKalb Counties for example) but without a work engages in massive transfers within the state that the GOP controls lock stock and barrel. The GOP, they’re against tax transfer, except when they’re not.

    • The Last Democrat in Georgia says:

      “The pattern is returning, so expect the public policy to return too. Tax transfers from metro Atlanta to rural Georgia. Not that I’m against this transfer. And it’s another enlightening demonstration that many GOP so-called principles aren’t principles at all.”

      That transfer of wealth from Metro Atlanta to the poorer rural parts of the state will continue, though with not necessarily the same intensity as in the past as the bulk of political power now lies in the Greater Atlanta region with the continued population growth in urban, suburban and exurban North Georgia and the continued population stagnation and declines in predominantly rural South Georgia.

      An example of this shift in political power from South Georgia to Metro Atlanta can be found with the $1.2 billion I-75/I-575 Northwest Corridor HOT Lanes project in which Governor Deal is going to use an entire year’s roadbuilding budget to fund much of the state’s portion of the cost of the project which increased substantially when he cancelled the P3 (public-private partnership) of the project back in December out of concerns about the excessive amount of legal and financial liability that the state would have faced had the project moved forward as a P3.

      There is no way in past eras, when Georgia state politics was dominated by rural South Georgia agricultural interests, that an entire year’s roadbuilding budget would have been used to fund the construction of a road transportation project in Metro Atlanta.

      Just that project alone, which is being almost singularly facilitated at this point by a governor who hails from one of the 28 counties in the Greater Atlanta region (Governor Deal is from Gainesville in Hall County which is recognized as its own MSA-Metropolitan Statistical Area as a part of the 28-county Greater Atlanta CMSA-Combined Metropolitan Statistical Area), exemplifies the dramatic shift in power in Georgia state politics from rural South Georgia to urban, suburban and exurban Metro Atlanta and North Georgia.

    • Bill Dawers says:

      Here are the state’s Metropolitan Statistical Areas (from http://www.dol.state.ga.us/pdf/pr/laborforce.pdf):

      Albany MSA: Baker, Dougherty, Lee, Terrell, and Worth counties.

      Athens – Clarke County MSA: Clarke, Madison, Oconee, and Oglethorpe counties.

      Atlanta MSA: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson,
      Heard, Henry, Jasper, Lamar, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding, and Walton counties.

      Augusta – Richmond County MSA: Burke, Columbia, McDuffie, and Richmond counties in Georgia and Aiken and Edgefield counties in South Carolina.

      Brunswick MSA: Brantley, Glynn, and McIntosh counties.

      Columbus MSA: Chattahoochee, Harris, Marion, and Muscogee counties in Georgia and Russell County in Alabama.

      Dalton MSA: Murray and Whitfield counties.

      Gainesville MSA: Hall County.

      Hinesville – Fort Stewart MSA: Liberty and Long counties.

      Macon MSA: Bibb, Crawford, Jones, Monroe, and Twiggs counties.

      Rome MSA: Floyd County.

      Savannah MSA: Bryan, Chatham, and Effingham counties.

      Valdosta MSA: Brooks, Echols, Lanier, and Lowndes counties.

      Warner Robins MSA: Houston County

  4. John Konop says:

    What would be interesting is running a cross table against sales tax revenue. If sales tax revenue goes up that is a general indicator that conditions are improving. If sales tax revenue is stable or down than it would be an indicator of the lack of wage quality per job.Obviously you trend by a year to year seasonality to take care of a lot noise in the numbers.

      • John Konop says:

        Thanks I saw that a few weeks ago. I wonder if it is tracking with the ratio of increase in employment numbers? Self-employment can be a tricky number via what is declared as income. That is why I tend to look at consumer spending numbers as a major indicator for trending. And I do think the gas prices and interest rates are better trending indicators for our economy now than the stock market via companies globalizing.

        The other boggyman is healthcare cost killing real wages via it growing 5 to 10 times faster than GDP. It is sad that we spend so much time debating BS…….rather than focusing on key drivers like healthcare cost,entitlements, infustruture, waste of money and resources on the failed war on drugs, education and military spending. The above should be tlhe focus of the debate not gays, abortion, death panels, killing grandma…….

  5. Jackster says:

    Bill – Excellent post! I always enjoy more context and points of view from outside my little town.

    One question, though: Would you say that the state has more CONTRACTORS than we used to, and that would explain why the payroll has remained stagnant? Case in point: We really don’t know how many contractors the military and intelligence agencies use, but we do know that for fighting two active wars, the active duty forces are very low – augmented by CONTRACTORS.

    Also, that would explain why there is more non payroll spending.

    • Bill Dawers says:

      It’s a good question and I don’t have a great answer. There are a lot of nuances. I’ll just throw a few thoughts out there.

      For the purposes of the payroll employment statistics, it’s all about who directly pays the workers. So clearly governments at all levels are supporting employment even if sometimes that employment counts as private. Some recent data that I saw on the household survey (which is referenced in this post), some workers self-report as government employees even though they work for private contractors (school bus drivers, etc.?)

      Construction employment fell off a cliff in Georgia during the bust and appears to have leveled off at a very low level. But it clearly would have fallen even more without continued work on various SPLOST and ESPLOST projects and other government construction. (I watched a couple of new buildings go up at Hunter AAF on my commutes in Savannah the last couple of years).

      But a lot of quasi-public jobs had been privatized well before the recession — bus drivers, the food service and custodial services at colleges, etc. That’s been a long-term trend and it might have quickened a bit in the last few years.

      My guess is that the public sector generally has cut back on the number of private contractors, but it probably varies a great deal from department to department, city to city, state to state, etc. Just a guess at this point.

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