Wednesday, January 23, 2013

Georgia bucks the trend? More union workers in 2012

The percentage of workers who were members of unions in Georgia rose in 2012 to 4.4 percent of all wage and salary workers, up from 3.9 percent in 2011, according to the U.S. Department of Labor’s Bureau of Labor Statistics.
Nationally, the union membership rate declined from 11.8 percent in 2011 to 11.3 percent in 2012.
According to BLS, the number of wage and salary workers employed in Georgia increased from 3,876,000 to 3,914,000, a rise of 1 percent. At the same time, the number of unionized workers in the state rose from 153,000 to 171,000, an increase of 11.8 percent. This resulted in the increased rate of unionization.
No doubt those in favor and opposed to organized labor in Georgia will have their own explanations for the change in the numbers, but either way, fewer than 1 out of 5 wage and salary workers are members of unions in Georgia compared to any number of states, even Alabama and Florida, where the percentages are greater.
Furthermore, these data are based on small samples, especially in states like Georgia where the percentage of union membership is so small. Small samples are always subject to potentially larger statistical errors.
Since the data are produced only annually, we will have to wait a full year to see if the statistical trend holds or if it is just a statistical fluke.
Too early to celebrate or bemoan yet.

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Tuesday, January 22, 2013

Georgia’s employment: End of the year ups and downs – Still a long climb to go

By the Numbers
Georgia’s December unemployment rate = 8.6 percent.
Georgia nonfarm jobs = 14,400 added in December; 74,100 jobs added in 2012.
Compared to past years, Georgia had a better year, both in its decline in unemployment rate and its increase in the number of nonfarm jobs, but the unemployment rate slowed in December, and even with a good December jobs number, the state is a long way from its numbers prior to the Great Recession.
State Unemployment
Preliminary seasonally-adjusted data for Georgia shows that the state ended 2012 with an unemployment rate of 8.6 percent, well below its December 2011 rate of 9.4, but still above the 7.8 percent unemployment rate recorded for the nation in December 2012.
It looked like the state was picking up momentum on the jobs front until the December numbers appeared. Not only did the unemployment rate remain essentially unchanged, but the number of unemployed people in the state actually rose.
(The difference between November’s 8.5 percent unemployment rate and December’s 8.6 percent is statistically insignificant, despite headlines in the media saying the rate had “risen.”)
For the year, the state’s labor force rose by 64,384 as 31,413 fewer people were recorded as unemployed and 95,797 more people found work in the state, which is certainly welcome news for job seekers and shows a slight tightening of the job market, although it will hardly be noticeable except at the margins.
There were two peak periods during the year for drops in the number of unemployed. In the first quarter of 2012 unemployment dropped by 19,467 over the first three months, followed by September-October-November period when 29,487 fewer people were recorded as unemployed.
This would look like good news, but the marked slowdown in December offsets some of the good numbers in the previous three months, as unemployment rose in December 2012 by 4,742 people. This month, plus the May through August increases, offset some of this good news early and late in the year.
Nonfarm employment
Preliminary nonfarm employment numbers for the state show that Georgia added 74,100 jobs in 2012, the state’s best showing since 2006. On average, 6,200 jobs were created in the state each month during 2012, compared to 3,100 jobs in each month of 2011.
Jobs grew in the state by 1.9 percent outpacing the nation’s growth rate of 1.4 percent. The annual numbers were helped by a strong December figure, as there were 14,400 jobs added in the state in December, noticeable pick up from November’s loss of 400 jobs.
A good dent, but again, still a long ways from making up for the 324,000 in job losses that occurred in 2008 and 2009.
The calendar year increase would have been greater if not for losses in construction jobs (-3,600) and in government jobs (-10,400).
The construction sector continues to suffer, showing a 2.5 percent decrease over the year. With total employment of only 139,400 at the end of the year, you have to go back to 1993 to see employment at this level for December in the construction industry in Georgia.
Government employment dropped 1.5 percent in the state in 2012, as Federal employment declined by 2,600 jobs, state employment dropped 2,600 jobs and local government erased 5,200 jobs.
As a percentage of employment, the Federal drop was the most significant, declining 2.5 percent over the year.
With the possibility of more budget cuts at the Federal level, it is unlikely that this sector will be a significant employer for some time to come.
The state’s information sector had the largest percentage increase in 2012, up 4.9 percent (4,700 jobs), while professional and business services net jobs increased the most at 24,300 (4.4 percent).
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Friday, January 18, 2013

Looking at discouraged workers

Discouraged Workers continue to be a drag on employment in Georgia

Despite recent job growth, there remains a large number of discouraged workers. Such workers have a decreased capacity to spend and thus make an economic contribution to their community.

In addition, when thinking about labor force data, these workers, who are currently not counted in the labor force, have the potential to increased the number of unemployed if they choose to begin job seeking again.

Thus, when looking at labor force numbers, such as the unemployment rate, declines in the rate may give a false employment picture to policy makers and forecasters, if the number of discouraged workers is not declining at the same or faster pace than the number of unemployed workers.

Unfortunately, unlike the national unemployment statistics, data on discouraged workers are not available on a monthly basis; but the Bureau of Labor Statistics has committed to providing alternative measures of labor underutilization by state, the most recent being from the fourth quarter of 2011 through third quarter of 2012 averages.

A quick look at the change from 2007 (the last good year of employment in Georgia) to the most recent data for the third quarter of 2012:

U-4 (unemployed + discouraged workers):
2007 = 4.7 percent
2012 = 10.0 percent

So the 2007 equivalent discouraged worker inclusion rate would be 4.7, or less than half the rate of 2012. Given that the official rate has also more than doubled since 2007 this is no surprise but confirmation that the discouraged worker burden grown actually more quickly than the official unemployment rate, which in itself has grown quite rapidly.

It is logical to assume that if Georgia's economy continues to recover, some of these discouraged workers will wish to re-join the labor force. This means that as the job picture improves, some of the improvement will be offset by this group of formerly-discouraged workers re-joining the labor force, potentially as unemployed, creating a natural slowdown in the rate of decline for the state's unemployment rate.

Reintegrating these workers, many of whom have been out of the workforce for 2 years or more, will be a major challenge because their skills may no longer be up to current standards and their attitudes towards work may have shifted substantically during their absence from the workforce.

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Details on the data

The definitions for measuing unemployment in Georgia are the same as those used at the national level. They are:

  • U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force;
  • U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force;
  • U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate);
  • U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers;
  • U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers; and
  • U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.
Those measurements for Georgia (fourth quarter of 2011 through third quarter of 2012 averages):

U-1 = 5.5 percent
U-2 = 4.6 percent
U-3 = 9.3 percent
U-4 = 10.0 percent
U-5 = 10.5 percent
U-6 = 15.9 percent

Equivalent measurements for Georgia in 2007, its last good year of employment growth, would be (2007 annual averages):

U-1 = 1.4 percent
U-2 = 2.1 percent
U-3 = 4.3 percent
U-4 = 4.7 percent
U-5 = 5.4 percent
U-6 = 8.1 percent

Wednesday, January 16, 2013

Georgia's unemployment rate triggers off Tier 4 benefits

It was widely announced last week that Federal Emergency Unemployment Compensation for Tier 4 has triggered off due to a continued decline in the state's seasonally adjusted unemployment rate. As explained in the media, the average rate for the previous three months fell below an average of 9 percent.

In November 2012, seasonally adjusted unemployment data for Georgia were as follows:

Labor Force = 4,800,345
Employed = 4,390,796
Unemployed = 409,549
Rate = 8.5 percent

Employment, as measured by the household survey, peaked in Georgia in Jan. 2008 with 4,609,974 persons employed and 251,063 unemployed. The labor force at that time (4,861,037) was practically the same as now, and resulted in an unemployment rate of 5.2 percent in Jan. 2008.

With nearly the same potential labor force as Jan. 2008 (4,861,037), it will mean that roughly 219,000 persons will have to find work or drop out of the labor force before the rate can get back to 5.2 percent, its Jan. 2008 mark.

Since from Nov. 2011 to Nov. 2012, employment in the household survey has grown by 104,946; it will take a rapid growth from this point forward or two more years of this level of growth to achieve that end.

And that assumes there is no growth in the labor force (an unlikely scenario). If the labor force continues to grow by the same as it has ,0.9 percent average of the past 12 months, then the pace of employment will have to grow even more rapidly.

Monday, January 7, 2013

The most interesting part of Friday's December U.S. employment report

The most interesting report of BLS's employment report on Jan. 4 was the Commissioner's Statement. Acting BLS Commissioner Jack Galvin wrote that

"Nonfarm payroll employment increased by 155,000 in December, and the unemployment rate was unchanged at 7.8 percent.  In 2012, job gains averaged 153,000 per month, the same as in 2011."

It would be reasonable to expect that not only should the U.S. economy be creating jobs at this point in an economic recovery cycle, but that the job growth should be accelerating. That is, it is reasonable to expect that job growth should be moving in an upward fashion so that 2012 saw significantly more jobs per month than in 2011.

Part of this anticipation would be come from the normal job growth acceleration that comes as the economic recovery kicks into higher gear. In addition, 2012 was a Presidential election year, and the large influx of money into the economy spent on campaigns provides a boost not only to election-related activities such as television stations and advertising agencies, but more broadly into non-election related activities. (It is very hard for an economist to forecast a recession beginning before November in a Presidential election year because of this massive flow of money.)

Instead, the monthly average job growth in 2012 roughly equaled job growth in 2011. This demonstrates the anemic growth rate still facing the U.S.

That means that the economic stimulus created by election campaigns had only the effect of keeping the economy on an even pace, rather than boosting it. One can surmise that without that boost, employment would have actually worsened during the year.

In contrast to U.S., good news for Georgia for the first 11 months of 2012

The good news for Georgia is that job growth, so far, in 2012 has far outpaced job growth in 2011.

In 2011 for the first 11 months of the year, you could have taken Feb. 2011's job growth (31,200) and thrown away the rest of the year, because February's growth ended up representing the entire year. Average job growth for those 11 months was a net of 30,000 jobs, or 2,727 per month.

When Dec. 2011 is added in, the average monthly job growth moved up to 3,067.

In 2012 for the first 11 months of the year, the state saw 57,400 jobs created, nearly double the jobs created in 2011, for an average job growth of 5,218 per month. That is why November's loss of 2,700 jobs was so disappointing.

What we don't know yet are Georgia's December job numbers yet. If they hold up closer to the state's October rise rather than November's decline, the state will look pretty good compared to the U.S.

So, unless there was massive decline in the state's jobs in Dec. 2012 (and there is no indication that such a disaster is pending), then the state's average monthly job growth should easily exceed its 2011 average.

Of course, if the U.S. average job growth in 2012 only equaled 2011's job growth and Georgia's job growth outpaced its former year, there must be states where 2012 fell significantly behind the 2011 numbers.

It will be interesting to check all 50 states' average monthly job growth when the states' December numbers are released in a few weeks.

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Friday, January 4, 2013

Georgia Senate bill to prohibit employers from requesting credit reports

State Sen. Donzella James (D-College Park) has pre-filed her bill to prohibit employers from requesting credit reports on employees or perspective employees, except in certain situations.

Now filed as SB 20, the Senator filed similar legislation in 2011 (SB 42) but failed to win passage of the legislation.

The new bill defines 'employer' as any person engaged in business who has 15 or more employees including the state or any political subdivision of the state.

The bill would prevent an employer or employer's agent, representative, or designee from requesting that an employee or prospective employee consent to a request for a credit report that contains information about the employee's or prospective employee's credit score, credit account balances, payment history, savings or checking account balances, or savings or checking account numbers as a condition of employment.

There would be exceptions that include situations where a credit report is required by law, employers are Federally insured banks or credit unions, or employer reasonably believes that the employee has engaged in specific activity that constitutes a violation of the law.

One can imagine that employers want to learn as much as possible about a prospective employee before hiring, but one can also imagine abuses of this information, not to mention concerns about safeguarding the individual's information.

Whether credit history information is a bona fide occupational qualification would certainly be up to question depending on the occupation.

Also, a poor credit history may falsely be used as a judgment of one's moral character, as was done back in the 19th Century when credit reporting firms provided in their reports moral judgments on the ability of businesses to repay loans.

From a privacy view, job applicants tend to apply for multiple jobs with different employers, so you can imagine each employer obtaining a credit history resulting in many copies floating around multiple prospective employers. Ensuring that companies would keep all of that data confidential would be a problematic task.

We will have to see if the General Assembly is more willing to consider the legislative change this year.

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Wednesday, January 2, 2013

An interesting development in Georgia's denial of unemployment benefits to seasonal educational workers

WTOC (Savannah) is reporting that Teamsters Local 728 is suing the Georgia Department of Labor to force it to pay unemployment benefits for seasonal education-related workers, such as bus drivers.

The U.S.Department of Labor (USDOL) has already issued an opinion that any such changes to the state's unemployment law should have been done through legislation rather than through the administrative process chosen by Labor Commissioner Butler, although Employment and Training Administration (USDOL-ETA) rules do allow for such an administrative procedure in some cases.

According to WTOC: The lawsuit states "the Commissioner of Labor redefined and broadened the definition of educational employers and the disqualification provisions beyond the scope and reach (of the law)". It also claims that Georgia law ‘does not authorize (denials) for employees of private for-profit employers that contract with educational institutions and perform non-educational activities'.

Teamsters Local 728 and its First Student members in Savannah are continuing to pursue all means to resolve the dispute, including staging sit-ins and protests at Georgia DOL officers in Chatham Co. and Atlanta. According to the Teamsters, the filed suit is their latest effort to compel the Georgia DOL to pay all unemployment insurance claims submitted by such contracted school workers and to reverse the unlawful and unjust decision by Georgia Labor Commissioner Mark Butler.

Whether to pay such workers unenployment benefits is solely a matter of state law, and not up to USDOL.

The most obvious solution is for the Georgia General Assembly to pass changes in state law consistent with Commissioner Butler's decision.

This, plus the Commissioner's agreement to retroactively pay benefits to the workers for last summer's layoff period, would diffuse the situation, or at least shift the issue from Georgia DOL to the state legislature.

So far, the Labor Commisioner has shown no such inclination.

Now, it is more likely he will wait to see how the courts rule.

Of course, even with a Republican majority in the General Assembly, such a change in the law is not a foregone conclusion.

All this is good news for the Teamsters, since keeping the controversy going provides good press for their organizing efforts. Commissioner Butler is becoming organized labor's best friend in Georgia.


Tuesday, January 1, 2013

November – Not a very good month for Georgia

Georgia’s employment data for November gave a picture of a state continuing a slow recovery in nonfarm employment. Not seasonally adjusted, nonfarm employment grew by 9,600; but seasonally adjusted, the state actually recorded a decline of 2,700 jobs.
Given the large increase in October, (up 38,700 jobs not seasonally adjusted), there was some hope that the state was showing upward momentum, but it appears that some jobs normally filled in November were simply filled earlier this year.
The good news is that over the past 12 months (Nov. 2011 – Nov. 2012) the state’s job growth has slightly outpaced the nation’s, with the state increasing employment by 1.6 percent compared to the nation’s growth rate of 1.4 percent.
This means that at 3,984,000 jobs, Georgia has returned to the employment it enjoyed in January 2009 when the state posted 3,934,800 jobs.
In December 2008, the state had 4,039,300 jobs. It would take a gain of 16,000 jobs to get back to that magic 4 million mark. That is likely but can’t be a sure bet given that the state’s employers have created an average of slightly more than 5,100 jobs a month over the past 12 months.
Even more difficult, it will be interesting to see if the state can maintain its 4 million job mark after the January data comes out, since January is a traditional job loss month after the Christmas seasonal jobs normally disappear.
It is a reminder how far the state has come, but also how far it has to go.
State’s growth is all private sector
In not seasonally adjusted numbers, the state has seen employment growth of 61,900 jobs (Nov. – Nov.). The nonprivate, nonfarm sector continues to drag down the overall job growth in the state. All the net growth has been in the private nonfarm sector, as the private sector added 68,700 jobs, thus indicating that 6,800 jobs were lost in the nonprivate, nonfarm sector.
How are our neighbors doing?
Looking at the data for our surrounding states, Georgia is growing faster than our neighbors, as well as the U.S. with the exception of South Carolina. It is interesting to see South Carolina’s faster growth, as Alabama, Tennessee and South Carolina traditionally have had manufacturing as a sizeable sector in their states.
Here are the 12 month percentage changes for the states (Nov. – Nov.):
                United States                                                    1.4 percent
                Alabama                                                              0.7
                Tennessee                                                          0.9
                Florida                                                                  1.2
                Georgia                                                                                1.6
                South Carolina                                                   1.8
Where do we go from here?
It is likely to say that unless the nation falls back into a recession, Georgia will regain its 4 million jobs mark, possibly in December, but more importantly, and more permanently, at some point during the first quarter of 2013.
That is a little comforting, but remembering that the state first crossed that mark back in 2005, it is a dubious achievement. It places the state back to 2005 in its jobs numbers and indicates how far the state has to go to make a full recovery in jobs, let alone any discussion of average wages.
Certainly, there is little evidence that Georgia will significantly outgrow the nation over the next year. More likely it will keep pace with the nation or register just slightly faster growth than overall meaning that current state policies to encourage growth are resulting in state growth just keeping pace with the nation.