In light of latest grim predictions, what can be done to spur job growth in Georgia?

There were lots of different adjectives used by the press when the Bureau of Labor Statistics announced on Friday that the U.S. economy added a seasonally adjusted 96,000 jobs in August. I used the word “disappointing” on my blog, and I thought the popular “tepid” was pretty close to the mark. There were darker characterizations, but I think those overstated the case.

While the pattern has been erratic and noisy, we’ve seen slow but steady job growth for the past year. But the job growth in many months hasn’t even been enough to keep up with population growth, much less to make any serious progress in regaining the jobs lost in 2008 and 2009.

Sure, the national unemployment rate fell in August to 8.1% from 8.3% the month before. But the decline was only about 1.5% .15% in actuality (the numbers are rounded), and the decline was mainly related to a .2% decline in the labor force participation rate.

In the latest data available for Georgia, the unemployment rate climbed to 9.3% in July from 9.0% in June. The July rate is the highest we’ve seen since last December, but is still well below the 10.0% rate in July 2011.

So where are things headed from here? What are the prospects for a faster jobs recovery in the state?

Not very good, according to the latest predictions by Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business, “Anticipation Effect” to Stall Economic Growth Into 2013:

The impending fiscal cliff, political dithering, plunging corporate confidence and an iffy consumer mood are among the factors causing Georgia’s economic growth to pause, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business. Also contributing to the standstill are falling demand for exports and the rising price of oil.

Some details from the latest report, which puts special emphasis on the global economic slowdown:

  • Georgia’s employment base will grow by 41,300 jobs in calendar year 2012, including 8,800 premium jobs, for an annual job growth rate of 1.1%. The recovery will be similar in 2013 when the state adds 42,600 jobs (0.8% annual job growth rate) with 9,300 premium jobs among that number. In 2014, new job numbers will rise to 69,600 (1.6% annual job growth rate) including 13,200 premium jobs.
  • Georgia’s unemployment rate for 2012 will be 9.1%. With tepid job growth in 2013, unemployment will rise to 9.2%. When growth picks up in 2014, unemployment will decline to 8.5%.
  • Statewide nominal personal income will rise a moderate 3.4% in 2012, increasing to 3.6% in 2013, with an anticipated strong increase of 4.8% in 2014.
  • Atlanta’s employment base will grow by 29,800 jobs, including 6,500 premium jobs, for a growth rate of 1.5%. Job growth will show similar strength in 2013, when Atlanta adds 32,900 jobs, of which 7,900 are premium jobs (1.1% growth). In 2014 metro area employment growth will pick up with 54,200 jobs (2.1% growth) with 12,300 premium jobs.
  • Atlanta housing permits will increase by 37.0% in 2012 to 11,557 units, due to an 82.6% rise in multifamily housing permits. Permit activity will increase by a paltry 0.8% in 2013, but will grow strongly in 2014, posting an overall increase of 26.6%.

Dhawan’s latest forecast is consistent with various predictions that the Georgia economy won’t reach its pre-recession level of employment until late in this decade.

I think it’s worth noting that this economic forecast isn’t going to change substantively if Obama wins or if Romney wins. It’s hard to say at this point who would more effectively deal with the fiscal cliff — the year-end expiration of a variety of tax cuts and the beginning of deep mandated cuts under “sequestration.” And even if we agree on policies that minimize the immediate damage to the economy while maximizing the chances for long-term deficit and debt reduction, we’re simply looking at a slow recovery.

Recoveries from financial crises are routinely choppy. Demand reamins weak. Residential investment is currently rebounding but remains depressed by ordinary historical measures; new home construction is generally a leading driver out of a recession. Georgia in particular had an economy largely dependent on real estate and physical growth.

Personally, I wanted more aggressive actions on the economy in recent years from both the Fed and the Obama administration, but I doubt that stronger measures would have been possible politically. But even the most extreme steps would likely have only bent the employment curve slightly upward. (Of course, even a slight improvement could mean better quality of life for millions of Americans.)

Public policy still matters, of course. And the small business owners that I routinely interview for my Savannah Morning News columns pretty much never mention federal policies or regulations. I hear routinely about state-level issues, but far, far more about local ones — slow permitting processes, contradictory bureaucratic responses, outdated zoning, and so forth.

I think our governments — especially local ones — need to spend a lot more time listening to small entrepreneurs about policies that would encourage job growth. Then maybe we’ll see better forecasts over the next year or so.

22 comments

  1. AMB says:

    Get the corruption out of the permitting process. Get serious about bribes and payoffs ie pay to play. Using a gun and using the power of your office to extort money should both be considered major felonies.
    Stop taking tax money and handing it to corporations. Use that money to improve schools at all levels. A well educated populace, mild climate, cheap land, access to ports and interstates should be what gets Georgia businesses, not bribery at the development level.
    Curb the reach of Georgia Power and encourage the growth of solar and other green fuels. Push money into research at Tech and SPSU.
    And finally if you want the young entrepreneurs of the future, stop acting so idiotically conservative in social policies. If you want to live in Crackerstan, go take over a small south Georgia county and run it as your fiefdom.

    • saltycracker says:

      The permitting issue is a bureaucractic issue far more than a corruption issue.

      The multi-layered, complex, winner/looser tax system is a big problem needing simplifing.
      Both parties are more interested in writing more laws and tweaking them for their followers.

      Fixing the political dithering is a matter of will…..which we do not have.
      Our legislators won’t even disavow those that won’t pay their taxes or have serious legal issues or engage in agreed questionable behavior.

      An educational system focused on education and training is needed with a complete overhaul of the free spending bureaucratic, employee system and more money is not the answer.

      The major power companies have issues but working with large users isn’t one of them.
      The young entrepreneurs need to embrace conservative economic principals regardless of their social causes.

  2. Scott65 says:

    As someone who has actually pulled permits before…I will tell you, its a big mess. Corruption has nothing to do with it (or very little from what I’ve seen). Here is an example of whats wrong. In Dekalb Co (and this could be other municipalities…this one just happened recently), there are TWO, thats right 2 people who were in charge of processing building/sign permits. They had 5 foot stacks of permits waiting. They used to have 5 people, but due to cuts in budgets 2 remained. I had a 90 day waiting period to get a sign permit…also, I have to say there is noticeable improvement in CoA permitting from where it used to be…but who is going to want to wait 3 months (or longer) just to start work waiting for a permit ? That does not promote growth…it chases it elsewhere. I could write a book on getting permits and how ridiculous it is in some places, usually municipalities trying to micromanage everything…or new cities that have no clue. Cant wait to have to navigate Brookhaven…that ought to be fun

  3. IndyInjun says:

    The issue is wage arbitrage with China. There would be plenty of jobs at $1.25 per hour. Anything that leaves wage arbitrage intact is simply cannibalizing jobs between the states.

    The coming collapse will cure the problem. Math stands next to God and will not be denied. People who really make things, produce crops and energy, and who hold physical wealth assets control their destinies. Anyone else is in very deep denial.

    Boomers miss the reality that it is not only a dearth of workers to support SS and Medicare, they miss that Chinese workers making less than $1.25 an hour cannot support these things either.

    I really like the future of manufacturing in Georgia after the system resets. Until then we will keep cannibalizing.

    • John Konop says:

      I agree trade reform is a major issue. But with that said Georgia should be investing into infastructure. The more capicty and effiectency for moving goods and people between major transportation hubs will help the economy. The plan should focus on creating effiectency and capacity from stems that feed the Atlanta airport, 75,285,20 and the southern port. Also a regional airport would be a big factor in northern side of metro Atlanta would help.

      • wicker says:

        The only problem is that major projects to improve infrastructure would take 10-15 years to complete. The only short term benefit to the economy would come from getting construction workers and firms back in business. The same deal with improving our educational system: it takes years to produce real benefits even at the high school and university level (trade schools could perhaps yield positive results more quickly), and even longer at the middle school level where the real problems are.

        “Also a regional airport would be a big factor in northern side of metro Atlanta would help.” I agree. But an airport close enough to make a difference would A) be prohibitively expensive because of land and B) encounter stiff resistance from the NIMBY types. We already saw B) in Gwinnett County. Oh yes, and then there is C) … it would cause Delta, who is still in a very precarious situation, to absolutely freak out. So, if you are building it north, it is only viable if it is too far north to make a real difference … at the edges of what can be considered metro Atlanta. So, instead of north, maybe there would be potential to add an airport west or east?

        • John Konop says:

          I agree education is a major factor. Improving education is about reallocating resources more efficiently in my opinion. For instance we could cordinate trade school education into the high schools more efficiently if we made the requirements focused on the skills needed and eliminated needless classes creating drop outs. We could also increase on line education options for all students to the point that we could create a home school public school option. We need to think out of the box…….

      • seekingtounderstand says:

        Respectfully said, what about 3-D imaging tech that will change the world just like the internet did? Make traffic work better shoud be our first priority. If you have ever been anywhere in Atlanta the traffic lights are not coordinated.
        Just like going from horses to cars, we are changing and it will be a bumpy ride for many.
        Cities will be out of favor in the future, people will want ex-surburbia. So why keep wasting our limited resources?

  4. Scott65 says:

    oh, and there is NO consistency between municipalities. You have a completely different set of rules for each one. Sandy Springs is nothing like Duluth which is nothing like Dekalb which is nothing like Fulton…you get the picture

    • wicker says:

      And yet we are creating more cities in Georgia, and Jan Jones wants to create more counties also. Hmmm …

  5. wicker says:

    What needs to be done in education is to promote private schooling. Conservative and centrist foundations need to start offering scholarships, for example. My guess is that the scholarships won’t even need to come anywhere near covering the cost of attending a private school. Instead, it can be used to get people who can afford private education but have their kids in public school to consider it. Most of the people who can afford private schools never really consider it because there is no incentive to stop doing what they have always done and what everyone else is doing. If we could double the number of kids in private school (which would still leave the vast majority of kids in public school by the way) imagine how that would transform our educational picture, and the education debate.

    • SallyForth says:

      wicker, I generally agree with you most of the time, but I’m scratching my head on this one. The people I know who can afford to send their kids to private schools are doing so already, simply because most of our public schools have dropped to such low quality education the last couple of decades. I cannot see where encouraging people who cannot afford private schools to send their kids there anyway solves anything – how about encouraging parents to get involved, be active in the PTA, and do everything possible to raise the quality of public education? Ultimately the kids who go to private schools will have to interact with society as a whole, including public school graduates. Lifting the quality of their education can only help everyone, including the private school graduates.

      If we could double the number of kids in private school (which would still leave the vast majority of kids in public school by the way) imagine how that would transform our educational picture, and the education debate.

      Really? We have discussed one of the current ways private schools have transformed things, forcing taxpayers to subsidize their operations by having the Labor Department pay their teachers unemployment benefits as “seasonal workers” every week when school is out. (see previous P/P thread on the topic of Mark Butler’s revolt – we know for sure it applies to private school teachers and the jury is still out re public) Doubling the number of private school kids would also mean doubling the number of private school teachers, and thus doubling the number of tax dollars going to them when they are on vacation. You might want to rethink that…

      Be that as it may, this is a beautiful Sunday and the Falcons soared – so I can’t be anything but happy. Matty Ice, 4 TD’s (one rushing); defense intercepted 2 Chiefs’ passes, won walking away 40 to 24. Word! 🙂

      • Calypso says:

        SallyForth, NO NO NO NO NO, the jury is NOT out re public school teachers. For some reason you are just having a difficult time accepting the truth, which is not only true (hence my use of the word truth), but also common knowledge. Not even Harry is pitching this fallacy you keep throwing out.

        Stop it, you’re sounding goofy.

          • SallyForth says:

            Calypso, don’t freak out – maybe I should have said my jury is still out? I’ll talk with my public school teacher friend this week, put bamboo shoots under his fingernails, give him the info you’ve shared here, and ask him to do some deeper checking at work. He told me he personally does not do this, but that it is available to public school teachers too – sounds like he may have his wires crossed about what other teachers are doing. Sounds like it will turn out that you straighten us both out! 🙂

            Yep, it was a good weekend for both teams in black and red!

      • wicker says:

        I have nothing against public education. And the idea that private education is sheltering kids from the real world … the vast majority of private schools are not these elite academies. I don’t see improving public education, especially via magnet schools, and increasing the number of kids in private school as being mutually exclusive. I just think that we have gotten stagnant and need to do things to get our edge back. I am very skeptical of the push towards online and computer based education (does over-reliance on technology reduce critical thinking and reasoning … sometimes just sitting and wrestling with things actually does help the brain!) and just think that we need to do things differently.

        But you are right about this working the system with the unemployment benefits. That needs to end.

  6. wicker says:

    One thing that might help … getting past the fascination with supply side economics with Republicans and social welfare economics with Democrats. Reaganomics was good for getting us out of the 70s stagflation, and also back when the national and global economy were entirely different. As for the Democrats, redistributing wealth from the rich via social programs does not create wealth for the poor or middle class. On the state level and nationally, both parties need to abandon their current core economic policies and go back to whatever philosophies that existed prior.

    • Charlie says:

      You could write books on the above, using every bit of data available, and it still wouldn’t sink in to most on this debate who believe partisan talking points are based on some sort of economic academic research.

      Until we can get the majority of the country (or at least the majority of swing voters) to understand the above, we’ll continue to have little progress, as each major party will continue to offer incomplete solutions and/or soundbites to what is a very complex set of structural problems with this current economy.

      • saltycracker says:

        The answers are more in of what the government does not need to be doing and how they can better do the things they are doing. Genius is in simplicity. Our elected politicans are not in the same league with the average entrepreneur, business person, philanthropist or even those scamming the vunerable public systems. We need to turn the job producers loose while regulating and enforcing activities.

        • seekingtounderstand says:

          Funny you should mention that our elected officals are not in the same league or even qualified to be making the complicated decisions required. My county commissioners are constantly blowing large amounts of money for consultants. Consultants that are usually ex government workers receiving retirement benefits while they collect consulting fees.
          Splost is a perfect example of average people being elected to then spend large amounts of money for which they have no knowledge of how to do. The crooked elected officals usually pay to get advice how to skirt the system for graft and personal wealth development programs for relatives and friends. So like many things in government today, we are paying for our own decline. And most republicans are simply calling for ethics reform with lobbist gifts when the decline in revenue is coming from something far worse.
          The question of the week is why is the AJC doing front page news on the Gwinnett corruption scandal and why does the federal government only investigate Gwinnett?
          Why is this the center of holding folks accountable? Why do no other counties rate the same treatment?

          • saltycracker says:

            Consultants are hired for several reasons:
            1. The problem is very complex
            2. The managers don’t know how to run their business
            3. Hidden agenda, payback, blame game for tough decisions, passing the buck

            Most of the time it is #2.
            Passing it back to the voters is many times #2 & #3.

            For most of the offices it is not to elect the best of the best as politicians but to streamline and simplify the laws and regulations so that they are manageable and enforceable by those with common sense and basic ethics.

            Matters can be complicated because someone wants it that way.

          • wicker says:

            Because no other counties have active corruption investigations going on. You seem to want the state or the feds to go on a fishing expedition in other counties in the absence of allegations or evidence of criminal activity. Why is that?

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