More Georgians Working Despite Top Line Numbers

This week’s Courier Herald column:

An interesting contrast is developing in the contest for Governor. A battle over Georgia’s economy and related employment statistics are giving each campaign a rare opportunity to showcase substance over style.

Last week, the Bureau of Labor Statistics showed Georgia’s unemployment rate rose to 8.1%, a stark increase from 6.9% just last April.  Democrats pounced with the news that Georgia is now the “worst in the Country” with respect to jobs, directly attacking Governor Deal’s longstanding theme that Georgia has moved into the “Best place to do business”.

And yet, there is evidence that Georgia’s economic recovery is squarely on track.  The Atlanta Journal Constitution’s Dan Chapman and Michael Kanell took an in depth look behind the numbers to show dynamics at work that the top line unemployment rate doesn’t reveal.

Payroll numbers demonstrate that Georgia is adding jobs and employing just over 4.1 Million of its citizens – just 38,000 short of the pre-crash peak.  Part of the problem, according to the AJC analysis, is that 450,000 more people call Georgia home now than those that did before the recession took hold.

Growth has long been a growth industry for the northern half of the state, but the excess supply houses and commercial buildings created during the last decade has meant that not as many construction jobs were needed to accommodate the almost half million folks now calling Georgia their home.  As such, the construction industry itself has contracted, employing only 70% of the people it did in 2007.

Unlike many other states, Georgia has had to somewhat reinvent itself economically.  We absorbed 88 failed banks since 2008.  That’s more than just the loss of banking jobs and write offs of bad loans.  That’s a diminished access to capital formation as one quarter of our financial institutions were absorbed into others or vanished altogether.

Georgia’s leaders have instead worked to utilize inherent advantages to create a climate for jobs we could attract as well as industries that we could maintain.  Georgia is now positioned to truly rival Hollywood and New York as a major film and television production center, with multiple studio campuses under active construction throughout the state.  The industry currently employs 24,000 Georgians, with many more jobs expected to be added over the next decade.

Training Georgia’s former textile and construction workers remains a challenge for our employment picture. Part of Georgia’s unemployment challenge is matching the needs of employers with the skills of available workers.  Governor Deal has proposed adding coursework in film set design, precision manufacturing, computer programming, and engineering assistance to the Hope Grant program to fill some of these skills gaps.  The Hope Grant already covers welding, diesel mechanics, and commercial truck driving – areas that have proven difficult to meet employers’ needs for qualified applicants.

Federal payroll surveys show that Georgia has added 88,700 jobs over the past year – 42,600 since April – according to the AJC.  And yet, the unemployment survey from the BLS says the number of people working in Georgia has actually dropped 52,784 during that same period.  We may have to add the BLS as another organization that doesn’t know how to poll Georgia.

Regardless of the apparently conflicting statistics from different arms of the same federal government, the question put to Georgians is relatively simple:  Do they believe the state is on the right track or the wrong track.

The recession of 2008 hit the state at its core.  The banking, real estate, and airline industries were decimated.  The textile industry, already in decline, showed further consolidation.

Georgia had no choice but to move forward, as many of those jobs are not coming back.  In their place are new manufacturing jobs from companies like Kia and Caterpillar.  Studios from Tyler Perry, Pinewood, and others will anchor us as an entertainment production center.  And Georgia’s high tech corridor north of Atlanta has landed top names for research and development centers such as General Motors.

It is always easy to criticize, as pointing out flaws or results that were less than desired are easy.  Laying out a strategic vision, enacting policies to foster the correct environment, and closing the deal with employers to relocate and/or expand as a result are much harder.   Both candidates have a little over two months to persuade Georgia voters that they either buy into the vision of the course we have currently set, or move to a “better” track that as of yet is ill defined beyond 30 second sound bites and bumper sticker slogans.

26 comments

    • Harry says:

      I’ll take it. 10% of the Georgia population is non-US born immigrants.
      http://www.ajc.com/news/news/state-regional-govt-politics/georgias-foreign-born-population-up-by-5-percent-s/nhQGZ/

      Many new immigrants are working on an ad hoc basis. They do all sorts of jobs and are paid under the table or get a contractor 1099. Sometimes they work as an employee and are then laid off and hit the official unemployment rolls. We have a reputation as a cheap cost-of-living state where folks can come and collect some benefits, and survive in the underground economy.

      • Jon Lester says:

        Quite a few US-born Georgia residents are working informally, too, and I think their numbers will only grow if Jason Carter makes good on his promise to chase down those who are behind on their taxes, among other ideas borne of an apparent belief that new employer burdens will somehow create new jobs.

    • George Chidi says:

      Ignoring Harry’s nonsense for the moment, it’s not that people come here without a job. Most people come here with a job. The natural churn of the employment cycle causes some people who are already here to lose a job. But because there are more people here, the musical chairs problem raises unemployment.

      Some people do come here without jobs. They’re almost all the spouses or family members of employed people as part of a family move.

      Some of this has to do with the quality of employment. Professional services jobs and industrial manufacturing have given way to high-churn low-wage service jobs in industries with high turnover. The adjusted income has fallen $8000 a year for households in the last six years. On paper, the number of jobs has increased. But those jobs are much more unstable and the length of time people are unemployed between these unstable jobs has increased, leading to a functional increase in the unemployment rate. The metric I might want to see is length of tenure. I don’t know where to find it.

      Charlie is alluding to some of this structural change in his column. Banking jobs are professional-class occupations that (normally) would be stable. Construction is notoriously unstable work … which is why it tends to attract casual laborers. There’s some evidence that the rate of illegal immigration to Georgia reversed itself following the construction crash … and the passage of HB 87, with “self-deportation” to better climes. Immigration remains high here because of stable immigrant communities like those in Suwanee, Norcross, Chamblee and Duluth.

      But the construction market has given way to fast-food jobs, call-center catastrophe jobs, retail jobs — the sorts of things that pay $10 or $14 an hour instead of the $25-30 an hour one might earn from skilled labor. It’s rather hard to bootstrap yourself to the next rung when the next rung pays less than the first one. When higher-wage jobs are replaced with lower wage jobs, there will be more losers than winners. A rising unemployment rate reflects that — we’ve created conditions where it’s easier to fire someone at all strata.

      • Harry says:

        “ignoring Harry’s nonsense for the moment” – just because I’ve called out your BS on numerous occasions?

        “Most people come here with a job. “ – Cite?

        “Professional services jobs and industrial manufacturing have given way to high-churn low-wage service jobs in industries with high turnover. “ – To what do you attribute this?

        “The metric I might want to see is length of tenure.” – It’s not rocket science to realize that lower-paying jobs generally have lower tenure.

        The rest of your contribution are obvious facts and filler. It adds no value. I’m trying to be charitable with you.

      • Lea Thrace says:

        I find it rich that the king of nonsensical hyperbole and uninformed conclusions is asking you for cites and attribution.

        Oh Irony!

  1. Trey A. says:

    Nice analysis, George.

    The more Deal has Carter talking about jobs, the better he looks. Regardless of what metric or poll you’re looking at, the employment picture in Georgia isn’t ideal. But unlike ethics and education, Deal has successfully staked claim to some job-creating bona fides. It’s certainly debatable on how much of a positive (or negative) impact the Deal administration has had in terms of creating decent jobs for Georgians, but at least there’s a debate. And people care about jobs.

  2. Trey A. says:

    Do these women vote? Cause the only way Carter wins is if people who aren’t exactly thrilled with the work the GOP supermajority has accomplished over the past few cycles actually make it to the polls. I’ll be voting my split ticket with Mr. Carter at the top, but the only way he has a chance is if folks like us do a better job of convincing our friends, neighbors, fellow parishioners and colleagues to do the same.

  3. Bill Dawers says:

    All the numbers — both the unemployment estimates from the household survey and the payroll jobs estimates from the establishment survey — come from the Bureau of Labor Statistics. So I wouldn’t call these different “arms” of the federal govt. — maybe different fingers.

    We haven’t yet seen the latest data used to figure the August unemployment rate. When it’s published on Thursday, it should be here: http://www.dol.state.ga.us/pdf/pr/laborforce.pdf

  4. saltycracker says:

    When the interpretations of the stats don’t fully help us understand the anomalies they leave the biased to their own conclusions. The political forum, if actions are needed, can identify some options.

    The issues of unemployment and jobs might need a different/dual legislative approach and it can get deceptive.

    Jobs: Tax incentives work but in Georgia are doled out on an influence/lobbyist dream. For example, Beach’s getting the old Herman Miller/UPS facility in Roswell declared an opportunity zone in an area of high unemployment was to get GM $3 mil. @ year for high tech employees. It certainly got a lot of good jobs/taxpayers in the area, lowered the % of unemployment but had very little impact on those, mostly unskilled unemployed workers. Not saying to end the zones but call them what they are, corporate tax incentive zones.

    Unemployment: Unemployment levels can be better reduced by education, particularly vo-tech, and time limitations to benefits for the able bodied that are making a career/excuse out of unemployment or to avoid a directional change.

    Also, overhauling the tax laws can help reduce the vast underground economy by eliminating personal income tax and raising consumer sales taxes, fuel taxes and internet sales taxes (growing exponentially). We do not have the will to enforce laws on the books.
    Interestingly the unemployed unskilled who should be concerned with illegal immigration are not.
    Shutting out compliant skilled workers from immigrating is another problem. But we refuse to fix the laws.

  5. John Konop says:

    As I posted before the highest unemployment is among application white not African Americans….The key driver is the War on Drugs, it has been devasting to the lower income communities….Governor Deal should use his prison reform program on sentencing/ jobs, and promote the positives…..while pushing for more reforms on the chain of having a record on non violent offenders job chances…The current scarlet letter approach on victimless crimes is a major weight on the job numbers…I give a governor Deal credit for moving in the right direction…

    • George Chidi says:

      This is probably the most direct measure of racial job discrimination I know: in times good and bad, add roughly 5 to 8 percent to the white unemployment rate to get the black unemployment rate. It’s true regardless of education — black college graduates are unemployed roughly 5 to 8 percent more often than white college graduates. Let’s not start in on majors or quality of education: there isn’t enough difference at the societal level to explain a six point increase. It’s job discrimination, and it’s a tax on income equal to the spread in unemployment rates.

      The spread in Georgia is closer though: 13.2 percent black unemployment to the state average of 8.2 percent last year. That may have something to do with the large number of black people in Georgia. Because more of the state is black and Latino, the state average will edge toward the black average.

        • George Chidi says:

          I admit it. The “resiliency” calculation is interesting. Still the study notes that the share of employed black workers is lower than that of white workers, which gets around the question of how you count unemployed people. Also, the resilience gap — the difference in change between the percentage of black workers and white workers who fall out of the workforce as discouraged — is only about a point. It doesn’t explain the other four to seven points.

          The USA Today piece accurately describes conditions today. But the employment gap between blacks and whites for college graduates has persisted through good economic times and bad. It’s not the economy that gives a black college graduate about the same employability as a white high school graduate. It’s race.

          • saltycracker says:

            Correct, race is in a long, long list of non-job related factors interviewers (black, white, Hispanic, Asian) err on. But I’d put Georgia/Atlanta as one of the more sensitive on the issue at the manager level. But this does not explain why Georgia is #1 in unemployment much less a measurement of racial bias.

            Georgia has more black owned businesses than any state but NY – and is increasing at a very fast pace….20% of Atlanta businesses are black owned and some rate among the top revenue producers in the US. Atlanta being called the black mecca does not compute with your position as to why we are #1 in unemployment.

            For your further reading pleasure (lots of approaches):

            http://blackdemographics.com/economics/black-owned-businesses/

      • John Konop says:

        Sorry to you and Harry,

        I meant white Appalachian….The unemployment rate is higher with them than with African Americans in Atlanta…. causalities of the “War on Drugs” as well…..poor people cannot get out of the system via laws….on a macro once in…ask people in the legal system…

  6. Will Durant says:

    I don’t care how you slice it if they are using the same criteria from state to state then 51st=51st. Even if we are not THE bottom I don’t think it can be argued that we aren’t close to it.

      • saltycracker says:

        Bill, OK. Now what ? See points 9/22 6:40PM, understanding anomalies might not substantially change that things suck, the points made suggestions for entertainment discussion, others ?

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