Georgia and metro Atlanta continue to make steady economic gains. Yet the robust growth of the 1980s and 1990s remains difficult to match.
The state’s unemployment rate dropped to 7.7 percent in October, progress from September’s 7.9 percent, Labor Secretary Mark Butler reported last week. In October 2013, the state had 7.8 percent unemployment.
Butler said that the state added 33,800 jobs in October, 31 percent more than the average September-to-October growth rate for the last three years. Georgia gained 96,000 jobs since October 2013, 57,800 of them in metro Atlanta.
Despite the improvement, Georgia again had the highest jobless rate in the nation, the Bureau of Labor Statistics reported Friday. The national unemployment rate was 5.8 percent.
Georgia’s 4.17 million jobs in October were the highest number since May 2008, Butler said. Yet, that’s about 180,000 fewer than before the recession, the AJC said.
The pattern of slow growth appears unlikely to change next year, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business.
Georgia’s employment growth will sputter to 71,000 new jobs next year, after an increase of 83,400 this year, Dhawan said last week in his quarterly economic forecast. He expects the state to add 83,500 jobs in 2016.
Gov. Nathan Deal during his successful campaign for re-election discounted the unemployment numbers while citing the jobs created during his first term. While economists see the unemployment figure as flawed, it does indicate that too many Georgians remain unable to find steady work.
According to state Labor Department statistics for October,139,600 of the state’s jobless were long-term unemployed, 38.3 percent of the total. That’s an improvement over the 45.6 percent long-term unemployed in October 2013, but still too high.
Many of Georgia’s new jobs are low-paying positions, according to a report by Wesley Tharpe of the left-leaning Georgia Budget and Policy Institute. Tharpe, advocating that the state raise its minimum wage incrementally to $10.10 an hour by 2018, found that only 15 percent of the state’s job growth from 2010-2013 was from “mid-wage” jobs paying $34,000 to $58,000 a year.
A total of 44 percent of new jobs during the period came from low-wage industries paying less than $32,000 a year, the report found. More than one in four Georgians in 2013 worked in poverty-wage jobs that pay less than $11.46 an hour, the report said.
Tharpe called for the state to phase in minimum wage increases above the federal amount of $7.25 an hour. Under his plan, the state rate, now $5.15 an hour and applying to a small sector exempt from federal requirements, would rise to $8.20 in 2016, $9.15 in 2017 and $10.10 in 2018. The minimum wage increase would bring more Georgians into the middle class and “pump more than a billion dollars in wages into the state’s economy,” he said.
The shortage of good-paying jobs also surfaced in Dhawan’s report. Only 16,400 of the added jobs he sees for 2015 will be of the “premium” type, paying $60,000 or more a year.
Dhawan did offer support to Deal’s view that the state unemployment number is skewed. The economist said in a press release that “one needs to discount unemployment rate movements as a broad indicator of economic well-being.”
The Bureau of Labor Statistics’ employment survey contains a statistical bias, he said.
“The sharpest rise in the unemployment rate has occurred in states that have a higher concentration of manufacturing jobs, such as South Carolina and Georgia, whereas it is lowest in service-providing states such as Florida, where the rate remained essentially flat,” he said.
Instead, Dhawan looked at the state’s tax receipts, which increased by 5.2 percent the first nine months of 2014. The nonfarm payroll survey showed that 65,000 jobs were created in the year’s first three quarters.
While the state government’s power to boost the economy is more limited than commonly believed, one proposal raised by Democrats during the election campaign should be carried out: a cost-benefit analysis of tax-incentive policies to determine if the right industries are benefitting. Big corporate relocations like those of NCR and UPS have dried up in recent years. Educational improvements to increase the number of high-tech workers are also needed.
Deal’s economic vision for Georgia was rewarded by voters. Now they wait to see what new programs he’ll offer.
