Is Georgia’s High Unemployment Rate a Result of Hands Off Economics?

That’s one possible reason the Peach State’s unemployment rate has stubbornly stayed above the national average, according to a story published today in The Atlantic. Noting that the state was named the best for doing business by Site Selection Magazine last year, the story continues,

[T]hose who follow the state’s economy say the state’s troubling economic figures are directly related to Georgia’s attempts to paint itself as a good state for corporations.

“This is what a state looks like when you have a hands-off, laissez-faire approach to the economy,” said Michael Wald, a former Bureau of Labor Statistics economist in Atlanta. “Georgia is basically a low-wage, low-tax, low-service state, that’s the approach they’ve been taking for a very long time.”

Governor Deal has emphasized time and again that he believes it is the role of government to get out of the way and let the private sector stimulate the economy. Georgia was among the first states to cut back the duration of unemployment benefits available to its residents to 18 weeks from 26. The state has slashed $8.3 billion from public-school funding since 2003 and passed eligibility requirements for a state financial-aid program that caused a dramatic decline in the number of students in technical colleges (some of those requirements have since been rolled back).

The story points out several examples of why the state’s economy may be lagging, focusing on Griffin, located south of Atlanta in Spalding County. Griffin’s unemployment rate is 9% compared to 7.2% statewide.

Among the unemployed in Griffin are people like Richard Joiner, who was laid off from his job in manufacturing, and decided to go to technical school do develop his skills in film production, a rapidly growing industry in Georgia that desperately needs qualified workers. However, his unemployment compensation ran out before he could complete his training, leaving him without a degree and $13,000 in debt.

The story also talks about how tax cuts passed in 2012 to replace the birthday tax on automobiles has caused a shortfall in city budgets, citing challenges in Bainbridge, and Washington, Georgia’s having to lay off its police force.

Georgia can rightly be proud of its record of limited government and fiscal responsibility. But, the state must decide if it wants to make investments in its people and infrastructure in order to grow the economic pie. That’s something lawmakers will need to consider as they contemplate the study committee report that asks for more than a billion dollars in new revenues each year in order to pay for transportation infrastructure.

10 comments

  1. benevolus says:

    I can’t find it now but I saw a story recently that said the legislature was likely to double down and cut taxes even more.

  2. saltycracker says:

    Just the opposite. Legislative meddling that results in a net $250 million in GA corporate taxes or failing to tax Internet sales or increasing property taxes suggests we are not getting the right results. Public infrastructure suffers by being short changed and educational monies are misspent on an edu-cracy.

    These personal anecdotes usually melt into bad decisions and the answers do not lie in revision of getting money to some select business or person by piling on more tax codes and recipients. We can’t breathe.

  3. Dave Bearse says:

    Increased transportation infrastructure investment isn’t going to grow Georgia’s pie in a relative sense. The state’s relative decline began a decade ago, and continued throughout a period of state borrowing for highway construction.

    Increased transportation infrastructure investment is a well-suited meme to distract from the GaGOP’s lack of leadership though, what with the suggestion of unremarkable run of the mill tax increases taxes and increased government spending constituting the GaGOP idea of “big and bold”.

  4. saltycracker says:

    Fortune Jan 2015: “The jobs are out there, the evidence shows it. In October the BLS recorded 4.8 million open positions, the highest in over 14 years.”

    Then there are record numbers of startups, entrepreneurs and freelance workers.

    While in Georgia we search for ways to enable the victims of our po’ state.

  5. Bobloblaw says:

    This uis the stupidest thing Ive ever heard. If this was so, then we would have seen GA trail the nation in the 1992-2008 period. Instead GA lead the nation.

    The reson is simple: HOUSING.
    GA has a lot of its manufacturing dedicated to the housing marjet which still has not recovered.

    BTW the US economy is now booming. What “hands on” policy created this boom? I thought we had a “Do Nothing” Congress.

    • saltycracker says:

      …..hands off makes no sense – but wouldn’t blame it all on housing – a case can be made from several views. Usually stats are defined to produce what is desired. The housing industry is chock full of “under the tax/reporting radar” workers, citizens and non-citizens.

      The biggest hands on boost is low interest rates and selective taxation growing the have and have nots. Maybe GA is burned by demographic/migration changes and supports too many can supplement easily and get by.

      Don’t know but here’s a fun GA list by industry and has numbers from 2004 to 2014

      http://www.bls.gov/eag/eag.ga.htm

  6. Bobloblaw says:

    If anything there maybe not enough “hands off” in GA. GA is hardly a free market utopia. It is more like a crony capitalist state.

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