Georgia's small metro areas struggling

In 2013, Georgia’s employment growth has been concentrated in two surprisingly different parts of the state – the Atlanta metro area and the rural portions of the state.

Using seasonally adjusted nonfarm employment data provided by the U.S. Bureau of Labor Statistics, Georgia has added 83,600 jobs for the first 11 months of 2013, an increase of 2.1 percent.

The Atlanta metro area, which includes 28 counties, contributed 52,700 jobs, an increase of 2.2 percent.

In comparison, the rural counties in the state added another 26,400 jobs, an increase of 5.1 percent.

Small Metro Areas Growing Smaller

In contrast, the Brunswick metro area has lost 500 jobs so far this year, Warner Robins is down 500 jobs,

After the Atlanta area, the four largest metro areas in Georgia are Augusta (GA-SC), Savannah, Columbus (GA-AL), and Macon. These areas contain more than 590,000 jobs.

So far this year, the four areas combined have shown a net increase of 2,000 jobs, two-thirds of which occurred in the Macon metro area, which added 1,300 jobs.

Altogether the state’s metro areas excluding the Atlanta area have added only 4,500 jobs over 11 months, an increase of less than half a percentage point.

As a result, the state's smaller metro areas continue to suffer even as the state as a whole continues its jobs recovery. 

The non-Atlanta metro areas have not seen a significant recovery of traditional manufacturing The downturn in the Federal budget has affected areas such as Hinesville-Fort Stewart and Warner Robins, while the shrinking of the state's workforce has also contributed to this stagnation.

Smaller metro bases have been unable to take advantage of the job growth related to business services, health and education, and leisure and hospitality that has benefited the Atlanta metro area. 

Unless these smaller metro areas find ways to tap into these service-based industries, they may continue to shrink in importance.

Table 1. Nonfarm job growth for 11 months ending in November 2013, seasonally adjusted

AREA	NET CHANGE IN NONFARM JOBS (in 1,000s)	PERCENTAGE CHANGE IN NONFARM JOBS
Statewide Georgia	83.6	2.1
ALBANY, GA, MSA	0.6	1.0
ATHENS-CLARKE COUNTY, GA, MSA	1.3	1.5
ATLANTA, GA, MSA	52.7	2.2
AUGUSTA, GA-SC, MSA	-0.1	0.0
BRUNSWICK, GA MSA	-0.5	-1.2
COLUMBUS, GA-AL, MSA	0.3	0.2
DALTON, GA, MSA	0.5	0.8
GAINESVILLE, GA, MSA	1.0	1.3
HINESVILLE-FORT STEWART, GA, MSA	0.0	0.0
MACON, GA, MSA	1.3	1.3
ROME, GA, MSA	-0.1	-0.3
SAVANNAH, GA, MSA	0.5	0.3
VALDOSTA, GA, MSA	0.2	0.4
WARNER ROBINS, GA, MSA	-0.5	-0.8

  Data provided by U.S. Bureau of Labor Statistics

More on the Mystery: Job growth is good, so why is Georgia’s labor force declining?

Georgia’s nonfarm employment has shown good increases, even acceleration, in both 2012 and 2013. Since the beginning of 2012, Georgia’s nonfarm employment has risen by 159,100 jobs (not seasonally adjusted), an increase of 4 percent. 

Thanks to an acceleration in 2013, the state’s nonfarm employment has actually risen faster than the nation’s, which increased 3.5 percent over the same period.

Georgia's Nonfarm Employment, 2012 - 2013, not seasonally adjusted

The mystery is the decline in the labor force. Georgia’s labor force (number of employed plus unemployed) has actually dropped by 69,824 (– 1.45 percent) over the same period. 

Georgia's Labor Force, 2012 - 2013, not seasonally adjusted

(Graphs and data from the U.S. Bureau of Labor Statistics)

Even though labor force growth has been sluggish at the national level, it is positive, up by 1.1 percent, so what is happening in Georgia is different than for the nation as a whole.

There are several possible answers, but no definitive ones.

Possibility #1: The data are correct and the problems lie elsewhere

If you start with the assumption that the data and estimates are accurate, then parts of the state’s potential employees (noninstitutional population of 16 years of age or greater) continue to drop out of the labor market. In bad economic times, this is expected as people become disappointed and give up. Disappointed potential workers may retire early, go to school in hopes of gaining more education for re-entry into the job market at a later date, or even sit at home and not try to work.

One would expect that as the job market improves, these workers would be drawn back into the job market, either as newly employed or as actively work seekers (defined as unemployed), the two groups that make up the labor force number.

So why aren't they being drawn back into the rising employment market in Georgia?

Wages remain too low to attract workers back to the jobs? The cost of being employed is too high for the wages being offered (transportation costs, child care costs, etc.)? People are so disappointed by their past labor experience that even the offer of employment cannot bring them back into the job market?

One thing we can be pretty sure about is that it is not high unemployment benefits. First, Georgia’s unemployment benefits are relatively meager, and secondly, people receiving unemployment benefits must look for work, so they would be in the unemployed category, and thus included in the labor force numbers.

Possibility #2: The problem lies with the data

If the data are faulty, then the answer may not be in the labor market, but in the survey data. Either the nonfarm employment data is reflecting too much increase so jobs are being created at a slower rate than the data indicates, or the labor force data are faulty and people in the labor force are not being counted accurately.

The nonfarm employment data is a relatively robust survey even at the state level. More often than not, during upswings in the jobs cycle, employment is under counted rather than over counted as new businesses are created but not picked up by the survey of employers in a timely manner. It is very unlikely that the nonfarm survey (known as the Current Employment Statistics or CES) is over counting jobs.

That leaves the Local Area Unemployment Statistics (LAUS) survey as the potential cause of the miscount. LAUS is as much a statistical model as a survey. Even at the national level, 60,000 households surveyed monthly is a relatively small sample, and when it is broken down at the state level, statistical modeling must be used to offset the small sample size.

As with all models, the potential for statistical error is a real issue, and revisions in the numbers would not be unexpected, even large revisions.

One hint that this might be a statistical issue is that the labor force downturn really begins in January 2013. Through December 2012, the data have been benchmarked to reflect revised population controls and model re-estimation. The fact that the labor force data begins slipping downward after this re-estimation has occurred is suspicious.

Can the mystery be solved?

The good news is that all the surveys will undergo their annual benchmark in 2014, and the information will be clearer at that time. The bad news is that it forces policy makers into a state of paralysis if they need to wait for more definitive information, a condition that led to the data being made available monthly to specifically avoid this sort of situation.

Alternatively state policy makers can go ahead and draw their own conclusions about the lower labor force data and its implications for state income and sales tax revenues, as people out of the labor force are likely to spend at a lower level and pay state income at a lower level than those bringing home steady paychecks.

The answer is important to the state and its finances, but it is one more situation where the data shows the limitations under current survey constraints.  

Mystery: Job Growth is Good, so Why are People Continuing to Drop Out?

In November, the number of nonfarm jobs in Georgia rose by 14,500 (seasonally adjusted) to 4,072,200. The rise was equal to the number of jobs gained in September after a fall in October, according to the revised data from the U.S. Bureau of Labor Statistics.

Nonfarm Employment in Georgia, 2003 – 2013, seasonally adjusted

Supplied by the U.S. Bureau of Labor Statistics

The Construction industry added 4,400 jobs over the month (an increase of 3 percent), while Leisure and Hospitality jobs increased by 2,900 and Wholesale Trade jobs rose by 2,400.

The increase came despite a loss of 1,900 jobs in the Business and Professional Services sector, which has been one of the largest contributors to the state’s job growth.

Lower Unemployment Rate, Fewer People in the Labor Force

Georgia’s unemployment rate dropped from 8.1 percent in October to 7.7 percent in November, seasonally adjusted. The decline came as the number of unemployed dropped by 20,322 while the number of employed declined by 2,607 resulting in 22,929 people dropping out of the labor force.

Georgia among top growth states over-the-year

Over the 12 months (November 2012 – November 2013), the state has added 91,400 jobs, which is an increase of 2.3 percent and places Georgia in the top states for over-the-year job growth this month, behind North Dakota (+4.0 percent) and Florida and Texas (+2.5 percent each) and tied with Idaho at +2.3 percent.

For the 11 months this year, Georgia has added 83,600 jobs, an increase of 2.1 percent. So far this year, industries in Georgia with outstanding growth have been Construction (+12,700 jobs, +9.1 percent) and Professional and Business Services, which despite this month’s loss, has added 22,800 jobs this year for a 4 percent growth rate. Education and Health Services has added 17,600 jobs (+3.5 percent) and Leisure and Hospitality Services has added 17,400 jobs, an increase of 4.3 percent since the beginning of 2013.

Unemployment Rate drops as people drop out of the Labor Market

Since the beginning of 2013, Georgia’s unemployment rate has declined from 8.7 percent to 7.7 percent (seasonally adjusted). The decline occurred as 93,872 people dropped out of the labor market. Unfortunately, unlike national statistics, at the state level there are no current population statistics so we cannot determine labor market participation rates or the precise number of people not in the labor force.

Labor Force in Georgia, 2003 – 2013, seasonally adjusted

Supplied by the U.S. Bureau of Labor Statistics

The Mystery Continues

It is fair to say that without any indications of a decline, the state’s population is continuing to grow at some rate, so we can assume that the lower unemployment rate does not tell the whole picture.

Comparing the two charts in this article, you can see how nonfarm job growth is rising even as labor force numbers decline.

While the reasons for someone dropping out of the labor force can vary, generally, a declining labor force with a rising population is not a good combination, nor one that shows increased optimism about the job market.

It is easy to cheer lower unemployment rates, but when they are caused by people dropping out of the labor force, that is not an encouraging sign. Such folks have fewer resources, and not only does the lack of work caused harm to those individuals, their decline in spending also damages the overall economy.

In some sense, a rising unemployment rate, if caused by people returning to the job market, will be a greater cause for celebration than this slow decline as people give up.

Either sustained job growth will draw people back into the labor force or the job growth numbers will slow as people out of the labor force reduce their spending to offset their diminished income.

The two charts must reconcile at some future point.

While there are no state-specific data to draw upon, it appears from the national data that many of the long-term unemployed cannot find a means to re-enter this job market and may not be benefiting from this upturn in the economy.

Hopefully, sustained job growth will create opportunities for those seriously damaged by the Great Recession but that will have to wait for more months of data.

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Georgia employment stagnates in October; over-the-year growth continues to look good

Recently the Federal Reserve Bank of Atlanta put out a blog titled “Giving Thanks for Faster Payroll Growth” that noted last month, the Southeast gained more payrolls (67,700) than any other month since May 2010.

They failed to note, although they could have mentioned, that none of this growth was attributable to Georgia, which recorded a loss of 1,400 jobs over the month (seasonally adjusted).

While the actual number of people on nonfarm payrolls grew by 22,700 in the month of October, the seasonal adjustment factors turned this into a loss. In any case, the Bureau of Labor Statistics noted in its monthly report that the change in job numbers was not statistically significant, so statistically we can say that Georgia stood still in October.

Over the year however, the picture is brighter with the state having added 85,800 jobs since October 2012, for a job growth rate of 2.2 percent. Georgia began its recovery later than the nation and recovered at a slower pace until the end of 2012 when the state began growing faster than the nation.

12-Month Percentage Change (seasonally adjusted)

Month	United States	Georgia	Atlanta MSA
October 2012	1.6	1.5	2.0
November 2012	1.7	1.6	2.3
December 2012	1.7	1.8	2.4
January 2013	1.5	1.8	2.6
February 2013	1.6	1.8	2.2
March 2013	1.5	1.9	2.4
April 2013	1.6	1.7	2.0
May 2013	1.6	1.8	2.1
June 2013	1.7	1.9	2.3
July 2013	1.6	2.8	3.2
August 2013	1.7	2.4	2.7
September 2013	1.7(p)	2.9	3.1
October 2013	1.7(p)	2.2(p)	2.7(p)

(p) Preliminary

Business and Professional Services, which continues to be an important driver in the state’s job growth, loss 3,700 jobs in October. Along with a loss of 3,400 jobs in local governments were the main contributors to the stagnant job picture for the state.

Over the year, Business and Professional Services has been a significant contributor to the state as the sector added 30,600 jobs resulting in growth rate of 5.4 percent, the fastest growth rate of any sector.

Similarly, over the year, Leisure and Hospitality Services has grown by 5 percent, although from a lower base, resulting in an addition of 19,900 jobs.

Government continues to be drag on job growth, dropping 8,000 jobs over the year, or minus 1.2 percent. In Georgia, Federal employment declined by 4,900 jobs while state and local government failed to pick up the slack by also declining by 1,900 and 1,200 jobs respectively.

Atlanta MSA

For the Atlanta area, employment has outpaced the state after looking earlier as if it were lagging. In October, the MSA added 6,100 jobs (seasonally adjusted) and has added 63,600 over the 12 months ending in October 2013.

As a percent of the state’s job market, the Atlanta MSA has increased its share slightly rising from 59.5 percent of all nonfarm jobs in October 2012 to 59.8 percent in October 2013.

Building new Stadiums for Atlanta Braves and Falcons – Construction Boom

Today’s announcement that the Atlanta Braves will be building a new stadium in the Atlanta suburb of Cobb County follows the plan by the Atlanta Falcons to have a new stadium constructed near the site of their present stadium in downtown Atlanta.

Combined, these two building projects, both expected to be completed by 2017, means a good boost to construction jobs in the state.

As of August 2013 (the most recent data available), Georgia had 148,300 construction-related jobs with 96,100 of them located in the Atlanta metro area. While both numbers are up from comparable periods a year ago, the state is still down more than 25 percent from construction employment prior to the recession.

The combination of the two new building projects will give a needed boost to the state’s economy with the usual spin-off of construction-related materials and supplies needed to build the two stadiums and associated construction (parking lots, etc.).

Although infrastructure spending can be controversial in the Atlanta area, the stadiums are one type of infrastructure improvement that will be welcomed by many in the metro area. It encourages investment that might not have been made otherwise. 

While there are many questions among economists on whether such construction provides an net benefits, there should be no question that the short-term boost will help the metro area, which is still struggling to find its way out of the recession and will help an industry hit hard by the downturn in housing.

Some will argue that the investment in these two projects would have greater benefits if invested elsewhere, but that supposes that the money and people would invest in other projects. 

Economists like to talk about a rational "menu" of possible investments and weigh the advantages and disadvantages of each, but this presupposes that the investors are neutral in their decision making and consideration of investment alternatives.

More likely, if the funding was not going to these two projects, it is unlikely it would have gone to alternative investments in the area, so these two investments represent dollars that would not have been spent to the benefit of the Atlanta metro area, if not on these specific projects. 

In the best of all worlds, this short-term boost will bridge the gap until housing picks up over the next couple of years, barring another recession. That is good news for those in the construction trade, and for the state's economy as a whole.

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Summer shows Georgia’s Job Strength : Statewide, not just Atlanta

Sometimes it pays to take a wider look at employment statistics beyond the one-month numbers.

Looking at the 2013 summer as a whole (June, July, and August), Georgia added 25,800 jobs (seasonally adjusted) compared to adding only 4,100 jobs for the same three months in 2012. As has been the story throughout, most of those jobs were in service-producing industries (professional and business services, leisure and hospitality, and retail trade, as examples) with growth in service employment rising by 23,200 jobs.

For goods-producing industries, compared to 2012 at least construction employment (a goods-producing industry) was not a drag on the overall numbers.  Construction employment increased by 3,200 jobs over the three months, compared to a 100 job drop in the summer of 2012. Unfortunately, manufacturing employment declined by 400 jobs this year compared to a 500 job decline in the summer of 2012.

Government remains a drag on the economy, declining by 500 jobs over the most recent three months due to a 2,700 job drop in state employment. Federal government employment was flat leaving it to local governments to make up for most of the drop in state jobs.

Comparison to U.S.

For the three months of June-July-August 2013, the U.S. added 445,000 jobs, an increase of 0.327 percent.

In contrast, Georgia’s 25,800 job growth calculated out as a 0.642 percent rise, nearly doubling the pace of the nation as a whole. This occurred despite government jobs decreasing in the state by 3,800.

For the eight months ending in August, Georgia has added 54,700 jobs or an increase of 1.37 percent. This compares to the state’s 32,500 job growth (0.83 percent) for the same eight months in 2012.

The U.S. has added 1,442,000 over the past eight months, an increase of 1.06 percent, approximately the same percentage growth as for the eight months ending in August 2012.

After recording less than average growth in 2012, the state is now well ahead of the national growth rate for 2013.

State’s growth is increasingly coming from outside the Atlanta MSA

Of the 25,800 jobs created over the summer in Georgia, the Atlanta Metropolitan Statistical Area accounted for 18,400, or approximately 71.3 percent of the growth.

While this might look impressive, it is actually a slowdown in the growth from the same time last year when Atlanta accounted for 175 percent of the state’s growth as the MSA grew while the rest of the state was actually losing employment.

For the eight months ending in August, the Atlanta MSA accounted for 32,700 of the state’s 54,700 new jobs, or just under 60 percent of the state’s growth.

Again, this contrasts with 2012 where the Atlanta MSA accounted for more than 81 percent of all new jobs.

Over the past years, the Atlanta MSA has traditionally been responsible for approximately 60 percent of the state’s labor market.

In summary, the state is building new jobs at a faster pace than the nation as a whole, and it is building those jobs statewide, not just in the Atlanta MSA.

Michael Wald

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US August Numbers Should Not Have Surprised Anyone

Anyone looking at the Georgia employment report in July could guess that the employment number for both the state and the US was due for a downward revision.

The numbers for August bear out this statement. The US reported a nonfarm employment increase of 169,000 in August. The initial report for July showed an increase of 162,000 jobs that was revised in the latest release down to 104,000.

For Georgia, the state showed a sudden leap of 30,900 jobs in preliminary numbers for July. Not only was this quick rise unexpected; if true, it meant that Georgia created 1 out of every 5 jobs in the country in July, an unusual event for a state that has been keeping just above national job growth numbers.

It appears that the adjustments were not due to true “errors” but to the vagaries of seasonal adjustment. August is a difficult month to seasonally adjust as school systems continually change their opening dates, thus affecting employment levels in their systems.

The revision just shows that seasonal adjustment is not a precise science, but an art.

In past years, it might have been possible for someone at the Georgia Department of Labor to adjust the adjusted numbers before they were reported, so as to prevent these sorts of jumps and retreats. But the Bureau of Labor Statistics has had a policy of taking people out of the adjustment process and depending instead on computer programs.

This policy change was out of a concern that individuals biases might affect the numbers. It is also true that adjusting the numbers is a delicate maneuver and required great experience with the underlying databases to get the adjustment correct. 

With retirements of experienced people both at the BLS and at the Georgia Department of Labor along with personnel policies that may be discouraging some of the brighter minds from going into public agencies, there are fewer folks that have this level of expertise and have spent the years with the data to make these delicate adjustments correctly.

Instead, we put our faith in unflinching computer programs that work without bias, but also without an instinct for the data. Unfortunately, for the reasons given above, there is no going back to the older ways.

As for the news reports, in all, the 169,000 job increase, termed “disappointing” in some news reports is an unfair characterization of the data. The numbers show an economy recovering, although at a slow pace. The US economy is recovering, even if at a slower pace than many would wish. This slower than expected recovery may be with us through most of 2014.

With the release of the August national data, we can now expect downward adjustments in Georgia’s July numbers also. The July revised numbers plus the August preliminary data, when it is released, should show the state on its steady upward trajectory slightly faster than the US but by no means a standout among states.

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Georgia’s job growth jumps ahead in July: Real or a statistical aberration?

Georgia’s seasonally adjusted nonfarm employment jumped ahead in July rising by 30,900 jobs, its largest net increase since February 2011. This sudden jump propelled the state to an over-the-year increase of 71,700 jobs or a 1.8 percent rise compared to the nation’s 1.0 percent rise since July 2012.

Some skepticism develops in seeing this sudden good news, and a deeper look into the numbers justify a more wait-and-see attitude. Changes in the timing of job creation and losses undoubtedly had a factor in the current good news, as without the seasonal adjustment factors, the state actually lost 1,500 jobs.

The reason this translates into large job gains in the seasonally adjusted data is the relatively small loss of jobs in July compared to previous Julys. Over the past five years, the state has seen an average of 28,300 jobs lost each July, so this year’s 1,500 job loss translates into a sizeable seasonal gain.

The increase is so spectacular that you want to wait until next month’s figures are published to see if there will be any significant modifications to the numbers. If not, then Georgia provided 1 out of every 5 new jobs created in July for the entire nation. But what seasonal adjustment gives, it also sometimes takes away.

Most sectors in the state contributed to the overall increase. Using seasonally adjusted data, construction led the way with a 1.8 percent rise over the month, adding 2,600 new jobs. This was followed by leisure and hospitality services, up 1.3 percent (5,500 jobs).

Other industries with gains included retail, which added 1.2 percent more jobs, or 5,500 over the month; government up 1.1 percent (7,200); professional and business services, up 0.8 percent (4,600); and manufacturing up 0.6 percent (2,200).

The government sector grew despite losing 400 Federal jobs, which was more than made up for by the addition of 1,600 state jobs and another 6,000 jobs in local government.

Unfortunately, much of this change had to do with seasonal adjustment factors rather than real growth. For example, the seasonally adjusted data for local government showed the sector rising by 6,000 jobs, while the not seasonally adjusted data actually showed a drop of 16,600 jobs in the same sector. Within the local government sector, local government educational services lost 17,400 jobs in July before seasonal adjustment, meaning that the non-education parts of local government had to gain a net of 800 jobs before seasonal adjustment.

This all ends up with a sense of “wait until next month” to see if these gains hold.

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Growth But Low Pay: Georgia’s Professional and Business Services Sector

Professional and business services has been the success story for Georgia during its recovery. Since the beginning of the year, the sector has added 29,200 jobs, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. Over the year, the sector has created 36,800 jobs, almost half of all nonfarm jobs created in the state.

This sector includes a wide range of industries that require different skills and offer different opportunities and rewards. At the top is management of holding companies followed by professional and technical services that includes consultants, law firms, accounting firms, engineering and architectural companies, as well as computer design companies. This group also includes advertising and public relations companies. Many of the jobs in these companies require extensive academic backgrounds with resulting relatively high pay.

The sector also includes a wide variety of administrative and support companies and includes telephone call centers, waste disposal companies, pest exterminators, and security guard companies. These tend to required less trained personnel and provide lower pay. Also included in this sector are employment services companies including temporary personnel firms.

By looking at the national hourly rate data, the wage differential becomes obvious. Professional and technical services companies reported average hourly pay of $36.51 in June compared to $17.81 an hour for workers employed by administrative and support services companies.

Since the beginning of the year, the good news on job growth within the professional business services must be tempered by the fact that growth has come from administrative support services companies, which contributed two-thirds of the sector’s increase.

Companies in the higher-paying professional and technical services sub-sector increased their job counts by 3.1 percent over the past six months, while the companies in the lower paying administrative support and waste services sector added jobs at more than twice that rate, up 7.1 percent since December.

The result of this lopsided growth in one subsector of the industry means that lower paying jobs are growing much faster than those at the higher end, resulting in a state where workers have jobs but in occupations that tend to pay at lower rates.

In Georgia, while job growth is important, the quality of those jobs must be considered also. Creating a great of number of low-paying jobs produces immediate value for workers but diminishes their prospects over the longer term.

The Census Bureau recently indicated that median income in the state has reverted to its 1979 level making it increasingly hard for working families to improve economic possibilities for their children.

The effect is that job growth is not translating to improvements in workers’ standards of living in the way that the raw numbers might indicate. As a result, Georgians might be employed but not feel the optimism that the top level job numbers would indicate.

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Georgia Records Impressive June Job Growth

Georgia recorded impressive employment growth in June, adding 11,100 jobs, its best recorded one-month increase since March, according to preliminary data released by the U.S. Bureau of Labor Statistics.

After months of just keeping pace with the nation’s nonfarm job growth on an annual basis, the boost resulted in Georgia recording 75,300 new jobs over the year, an increase of 1.9 percent compared to the nation’s 1.7 percent rise.

In June, strong job growth sectors included business and professional services (9,300), education and health services (4,900), construction (2,000) and manufacturing (1,700). Disappointing data were recorded for wholesale trade (-2,600), the information sector (-2,500) and government (-2,200).

Over the six months ending in June, business and professional services has been the dominant growth industry in Georgia, contributing 29,200 of the state’s 40,000 new jobs. Other industries showing strong growth over the past six months include education and health services (11,000) and leisure and hospitality services (6,300). Government continues to disappoint with a decline of 5,500 jobs since the beginning of the year.

Since June 2012, business and professional services has added 36,800 jobs, while education and health services added another 19,500 jobs and leisure and hospitality services added 17,300 jobs.

During that same time period, government employment in Georgia decreased by 14,700 jobs, with the majority of that loss centered on state employment, down 6,200, followed by local government, down 5,400.

Despite the increase recorded for the month of June, manufacturing employment in the state is barely holding its own with a small net loss of 400 jobs over the year.

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Albany, Rome, and Warner Robins Show Georgia’s Job Weakness

There was a time when manufacturing moved to Georgia looking for low cost, nonunion labor without requiring many skills. There also was a time when military bases in the state promised strong, steady paychecks even in parts of the state with anti-Washington feelings.

Job losses in the Albany, Rome, and Warner Robins metro areas show that this time is over. Combined these three areas lost 2,300 jobs in May, while the state as a whole lost only 700 jobs.

Over the year, these three areas are down a combined 1.7 percent compared to the state’s overall job growth rate of 1.7 percent.

The Dalton metro area, which is still suffering from the decline in housing-related manufacturing industries such as carpeting, also is experiencing this issue, although at a less dramatic rate, losing no jobs in May and posting a smaller 300 job loss over the year.

Since the end of 2006, Albany has lost 38 percent of its manufacturing employment, Dalton has lost 31 percent, and Rome has lost 24 percent. Warner Robins is just beginning its decline as the federal government shrinks, losing 800 federal jobs in the past year.

Job gains in Georgia occurred in the Atlanta area, which added 3,900 jobs in May plus another 700 jobs added in Gainesville metro area, which is adjacent to the Atlanta metro area.

Over the year, the state has gained 69,000 jobs, of which 49,500 were in the Atlanta-Gainesville metro areas.

Georgia can point to upcoming manufacturing growth from new Caterpillar and Baxter manufacturing plants, but note that these are springing up relatively close to the Atlanta metro area, not in the more distant metro areas of Albany or Rome.

Even the rest of the state that excludes all the metro areas is showing growth, up by 400 jobs in May and 17,900 jobs over the year.

For Georgia’s small metros – Albany, Dalton, Rome – manufacturing was the savior of areas that had depended on agriculture in the past. For Warner Robins, military bases were the solution.

With manufacturing’s decline and cutbacks to the federal government, who will come to the rescue of these small metro areas now?

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Georgia’s growth flattens in May

After adding more than 28,000 jobs over the first four months of the year, Georgia’s job growth flattened in May, recording a small 700 drop in nonfarm jobs on a seasonally adjusted basis, according to the U.S. Department of Labor’s Bureau of Labor Statistics.

Gains in Professional & Business Services (2,400) and Education & Health Services (2,200) were offset by losses in Manufacturing (-2,600) and Government (-2,500).

Business & Professional Services remain the outstanding sector, rising 0.4 percent over the month and recording a 5.3 percent growth rate over the past 12 months, an increase of 29,600 jobs.

Leisure & Hospitality gained only 400 jobs in May, but has risen 4.5 percent over the year, up by 17,800 jobs. Education & Health Services is up by 3.1 percent since May 2012.

Manufacturing employment has declined steadily in the state since the first of the year, and there are now 6,300 fewer manufacturing jobs in Georgia than in December 2012. Over the past 12 months, the sector has lost a net of 2,300 jobs.

The losses in Government in May partially offset gains recorded in April even with an upward revision in the number of Government jobs gained in April as revised data came in stronger than originally indicated. Since last year, Federal Government employment has declined by 2.8 percent in the state, while State and Local Government also continues to record decreases over the year.

The Construction sector lost 1,600 jobs in May, although it is still 2,300 jobs above its level in May 2012, a gain of 1.6 percent.

Data for April were revised upward, showing a revised increase in April showing that the state gained 500 more jobs in April than originally estimated.

Estimates of the latest numbers from the U.S. Census indicates that Georgia is gaining population at a rate of 9,000 people a month or 1.1 percent.

Estimating that the state needs to add between 44,000 and 58,000 jobs annually to keep up with rising population, Georgia is on track to exceed that number this year despite the slowdown in May. The state continues to create jobs at about the same rate as the nation.

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Is Georgia’s future in Arts and Entertainment?

Can the state that is known for agriculture and low wage services become an entertainment center?


The Georgia Department of Labor has set out industry projections to the year 2020 that has the Arts, Entertainment, and Recreation sector as the state’s second fastest job growth area after health care.

Yes, the state has major league teams, and yes, Atlanta has a symphony orchestra, an opera company, and live theater, but is the state’s future in entertainment and the arts?

According to state labor department projections, jobs in arts, entertainment, and recreation will increase by more than 24 percent over the next 10 years.

The state is already seeing growth in this sector thanks to tax credits, which are encouraging movie and television production here in the state.

Reports say that in the last fiscal year, productions filmed in Georgia generated an estimated $3.1 billion in economic activity, a 29 percent increase from the year before, according to state estimates.

As a result, several companies have announced that they are building new sound stages in the state to accommodate film and television production.

In an Associated Press article in April, Matt Forshee, president of the Fayette County Development Authority was quoted as saying that these new production facilities “…takes the state to a whole new level. When you look at the films that have filmed in Georgia, for the most part, they have been smaller budget films, in the range of $20-25 million.

This allows us to open up to larger budget productions, which means more expenditures occurring within the state, which becomes a bigger return on the investment on the state level for the tax credits.”

Of course, the sector includes a lot more than film studios.

Georgia Department of Labor lists “Hot” jobs in this sector as including Graphic Designers, Public Relations Specialists, Producers & Directors, and Sport Coaches and Scouts.

These are jobs that require creativity and innovation, and artistic skills. Part of what some are calling the new Creative Class.

Preparing for these jobs requires the state’s university system to focus on new areas. In Georgia, the majority of college degrees are in business-related subjects, with a sizeable number in elementary and secondary teaching.

Graphic design, film studies, and public relations programs exist in the state, but at no where near the level of business courses. Where these courses are found, classes that stress creativity are often given second class funding.

If the projections are correct, are Georgia’s schools getting students ready for the right careers, or are they preparing for the past rather than the future?

Email at michaelwald50@gmail.com