Monday, December 19, 2016

AFL-CIO circulates petition opposing Andrew Puzder's nomination for Labor Secretary

The AFL-CIO has begun an online petition to oppose the nomination of Andrew Puzder to the post as Secretary of Labor.

 In an interview with Franchise Times titled Why CKE's Andy Puzder Thinks the Government Doesn't Understand Job Creation, Puzder, who currently serves as the CEO of restaurant chain CKE, is quoted as saying:

Government overregulation has had severe consequences for economic growth, job creation, dignity and self-respect, he said. “And restaurants may be the canary in the coal mine,” he added, referring to the sacrificial canaries used to test whether the levels of carbon monoxide in mines would kill miners.
Government, he contended, needs to get out of the way of entrepreneurs and allow economic growth to happen without the restrictions of Obamacare and mandating minimum wages and overtime, among other things. "If employers are competing for the best employees, they will pay more," he said. "You can’t order businesses to be profitable, or place restrictions on them and expect them to grow."

Here is the full message being sent out by the AFL-CIO:
There were many signs that President-elect Donald Trump would be a disaster for working families, but his choice for secretary of labor—fast food CEO Andrew Puzder—is truly horrifying.
Puzder’s anti-worker views are no secret. He’s railed against a meaningful increase in the minimum wage, opposed expanding overtime pay and advocated replacing working people with machines. Of his Carl’s Jr. and Hardee’s restaurants that were investigated for labor law complaints, 60% were found to have violated the law. Most of these complaints were for failure to pay workers minimum wage or overtime.
And, while working people at his fast food chain sometimes were making below minimum wage, Puzder was taking big compensation packages. In 2012, he made 291 times as much as workers at his restaurants.
Now, he could be in charge of enforcing our nation’s labor laws—from ensuring workplace safety to investigating wage theft.
During the election, Trump made a lot of promises to create good jobs. But he’s filling his cabinet with CEOs and right-wing billionaires who have spent their lives undermining working people’s rights to come together in unions, while fighting minimum wage increases, and paid sick and family leave policies.
Puzder’s track record raises serious concerns about his qualifications. Trump will never meet his campaign promises to working people if he surrounds himself with people like Puzder, whose values are completely out of step with America’s workers.
In Solidarity,
Rich
--------------
Richard Trumka
President, AFL-CIO

Thursday, December 8, 2016

MARTA’s Keith Parker honored as 2016 Public Official of the Year; ATU Local 732 may disagree

Governing magazine has named MARTA General Manager and CEO Keith Parker as one of its 2016 Public Officials of the Year, but MARTA’s union may not agree with that assessment.


The magazine’s Publisher Mark Funkhouser writes that in the group of eight individuals honored this year, he sees some common traits:

“Among the group of eight, I see some common traits that reflect the evolution of politics and management in state and local government, such as moderation, collaboration, and a focus on smart financial management.”

Mr. Parker’s listed accomplishments include launching a safety campaign on MARTA’s trains and buses, decreased wait times, reopened bathrooms, giving employees bonuses, and finishing his first year with a $9 million surplus, instead of the $33 million deficit that was projected before he came in.

Governing bills itself as the nation's leading media platform covering politics, policy and management for state and local government leaders.

In its profile, the magazine says that Parker helped MARTA build trust with riders and the general public, which resulted in approval of a referendum in November that resulted in a $2.5 billion investment for rail expansion for MARTA.



Outsourcing Paratransit

Keith Parker’s relationship with the MARTA union has not been as smooth.

The magazine does not mention the MARTA union’s dispute with the system over the outsourcing of MARTA’s paratransit service.

In a Transformation Road Map prepared by KPMG, the consultancy has recommended that MARTA explore outsourcing its paratransit service as a means of reducing costs. Five-year savings could range from a loss of $15,390,000 to a savings of $42,940,000.

This proposal has been opposed by Amalgamated Transit Union Local 732, which has offered a cost-saving MARTA Mobility proposal, which the union claims includes a series of recommendations to help the agency achieve its cost and efficiency goals. 

In response, the MARTA Board of Commissioners voted to table their decision to privatize the federally mandated service. 

The dispute still figures prominently on the union’s web site under:



Governing writes that “Today, Parker is regarded by many as the man who saved MARTA, but he is focused on the work ahead. ‘We’re not doing any victory laps yet,’ he says.”


Wednesday, November 23, 2016

Update: Federal court rules against Georgia but issues injunction barring implementation of Labor Department’s overtime rule

In September, I wrote that Georgia’s decision to join a 21-state lawsuit opposing the U.S. Department of Labor’s proposed overtime rule was based on its concern that making more state employees eligible for overtime would have a significant effect on Georgia’s budget.

On November 22, 2016, Federal Judge Amos Mazzant issued an injunction preventing the December 1, 2016, implementation of the rule.

Interestingly, Judge Mazzant ruled against the argument put forward by Georgia that “FLSA’s overtime requirements violate the Constitution by regulating the States and coercing them to adopt wage policy choices that adversely affect the States’ priorities, budgets, and services.”

Instead he found that the Fair Labor Standards Act did apply to states.

The judge issued the nationwide injunction after finding that the “Department exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.”

Under FLSA, employees who may be exempt from the overtime provisions of the FLSA must meet both a “duties test” to determine whether they perform duties of an executive, administrative, or professional manner, and a salary test.

In his decision, Judge Mazzant writes: “it is clear Congress intended the EAP exemption to apply to employees doing actual executive, administrative, and professional duties. In other words, Congress defined the EAP exemption with regard to duties, which does not include a minimum salary level.”

It is now up to the Labor Department to decide whether they wish to appeal the District Court’s ruling to the Fifth Circuit Court of Appeals located in New Orleans.

Complicating this matter is the upcoming change in administrations. Given the time constraints, any appeal to the Circuit Court of Appeals, and perhaps later to the Supreme Court, would have to be handled by the incoming administration; and it is unclear whether the new administration would be willing to undertake such an appeal.

In the meantime, Georgia is no longer required to reclassify state employees who would have become nonexempt under the proposed rule, and they do not have to raise their budget to cover the additional costs that might have been incurred with the rule change.




Saturday, November 19, 2016

Georgia unemployment insurance appeals unit named best in nation among large states

The United States Department of Labor (USDOL) has named the Georgia Department of Labor’s (GDOL) Unemployment Insurance (UI) Appeals Tribunal the best performer among the nation’s 22 largest states for handling UI appeals.
“The Atlanta Regional Office of the U. S. Department of Labor, Employment and Training Administration congratulates the Georgia Department of Labor Unemployment Insurance staff on their recent award,” said USDOL Regional Administrator Les Range. “As the recipient among large states of the Department’s 2016 Excellence Award for UI Appeals Decisions, they have demonstrated excellence in performing timely and quality appeal decisions and hearings. We appreciate their hard work in serving Georgia’s citizens.”
The award is based on the state’s performance for the period from July 1, 2015, through June 30, 2016. The GDOL previously won the award for large states in 2008, 2010, 2011 and 2013. 
“This recognition again confirms that our staff is doing a fine job administering our unemployment insurance program,” said State Labor Commissioner Mark Butler. “It’s imperative that correct and fair decisions are reached when unemployment benefits are awarded or denied. This ensures that eligible claimants get the benefits they deserve, as quickly as possible, while preventing undeserved payments that can increase the tax rates of employers who support the system.”
The USDOL’s award is presented to the top performers from small, mid-sized and large states. A state’s size is based on the number of workers covered under the state’s unemployment insurance program. There are more than 4 million covered workers in Georgia. The 21 other states that comprise the large state category are Arizona, California, Colorado, Florida, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington and Wisconsin.
For more information about Georgia Department of Labor services to employers and jobseekers, visit dol.georgia.gov.

Wednesday, November 9, 2016

Statement by President of the Georgia Federation of Teachers on defeat of Amendment 1

Statement by Verdaillia Turner, President of the Georgia Federation of Teachers
on the defeat of Governor Nathan Deal's Opportunity School District/Amendment 1

"Today, parents, teachers and the communities across the state resoundingly rejected the idea that policymakers alone should be the stewards of our children's future and public education-the public wants to maintain its voice.

"Instead, Georgians sent a clear message to Governor Deal and other stakeholders-we need to make changes to our public education system, but the current plan isn't working. We need to develop a new roadmap through an inclusive process where the focus is not on testing alone but on making the improvements essential to helping all students acquire the knowledge and skills they need for success in the 21st century economy.

"I would be remiss if I didn't thank Governor Deal for raising awareness around this issue and giving us the opportunity to collaborate on evidence based solutions for kids while ensuring educators have the tools, time and respect they deserve to deliver on the promise of public education. Georgians agree-we must push aside our politics, roll up our sleeves and get to work on behalf of our children."

Tuesday, October 25, 2016

Expect slowdown in growth in the Savannah area, according to Armstrong State University

Armstrong State University’s latest Coastal Empire Economic Monitor is forecasting a slowdown in the Savannah area’s economy, which is bad news for Georgia as the area has been one of the state's strongest success stories, along with the Atlanta and Athens areas.

Savannah metro area nonfarm employment, 12-month net change, Jan. 2009 to Sep. 2016
 
“If we look at the gains achieved in the first half of the year, we can, by comparison, expect growth to slow in the coming months,” said Michael Toma, Fuller E. Callaway Professor of Economics and the Director of Armstrong’s Center for Regional Analysis. “The effects of Hurricane Matthew will further test the resiliency of the economy during the fourth quarter.”

The Savannah area has been one of the fastest growing areas in the state, adding 6,800 jobs over the past year for a growth rate of 3.9 percent, the, but the Center is questioning some of the employment data being reported by the Georgia Department of Labor and the Bureau of Labor Statistics.

According to the Center, “the addition of employment in each of the major sectors (tourism, education, healthcare, manufacturing, etc.) does not match the total number reported for the region by the Bureau of Labor Statistics (BLS). Sector-level employment was stable from the first to second quarter at 177,000 workers, while the total reported by BLS indicates growth of approximately 1,900 jobs during the quarter, to reach 177,500. Much of the reported second quarter gain is anomalous because reported first quarter total employment was less than the total of sector-level employment.

Further, it is likely that regional manufacturing data is currently overreported by as much as 1,000 jobs, and will be revised downward in the annual data benchmarking process conducted by the Georgia Department of Labor in the first quarter of 2017.”

Looking at leading and coincident indicators, positive signs include increasing total regional employment, along with increases in boardings at the airport and a rebound in consumer confidence.

The Center notes that these indicators offset flatness in hotel and retail sales and weaker activity at the port. In the housing market, building permit issuance for single-family homes fell sharply by 10% from the first quarter and was below year-ago levels by the same amount.

The latest report suggests that “expectations about the regional economy’s growth should be adjusted downward through late 2016 and early 2017, due to mixed signals and the anticipated lingering effects of Hurricane Matthew.”

You can read their full analysis here.




Monday, October 10, 2016

Hurricane Matthew’s impact on workers in Georgia? Low-wage service workers will be hit worse than others

Conventional wisdom would say that the hurricane will show few long-term effects on overall earnings but that certain groups of workers will be affected more severely than others.

Low-wage workers in service industry jobs in the affected areas, such as Savannah, will see a decline in their income for the year.


Hurricane Matthew was felt severely in the coastal counties of Georgia. Required evacuations in Chatham County (Savannah) and other counties disrupted some of the fastest growing parts of the state.

In some respects, the disruptions were minimized by the storm coming at the end of the week. Nevertheless, Chatham County schools, which can be seen as a proxy for area’s return to “normal,” were not to reopen until Wednesday, October 12.

Looking at impact, it is tempting to see the disruption as causing a major economic blow to coastal Georgia, and to a less extent, the entire state, but this overstates the true impact.

Looking at impact, it is tempting to see the disruption as causing a major economic blow to coastal Georgia, and to a less extent, the entire state, but this overstates the true impact.

But it is important to note that while overall impact may be minimal in most areas, the effect on earnings will vary for different groups of employees. Low wage employees who do not hold occupations needed for cleanup and recovery will not be able to make up wages lost during the natural disaster, while those employees who do have skills needed for repair and restoration activities should see a net increase in their earnings as the increased recovery work more than offsets the loss of wages caused by the temporary shutdown of businesses during the event.

What conventional wisdom tells us

Here is the conventional wisdom when it comes to dealing with the effects of a natural disaster such as Hurricane Matthew:

Prior to the event, business picks up as consumers and businesses purchase additional supplies in anticipation of shortages. These include food and fuel.

When the event causes evacuations, people leave the affected areas. Within the affected areas, business slows, while there is an increase in economic activity in the areas receiving the evacuees.

After the event, people return to the areas previously evacuated, and economic activity increases above the normal level as people spend money and effort to restore the areas to their pre-event levels.

Over the medium term, the dip in economic activity is cancelled out by the higher-than-usual rise in economic activity post-event.

Depending on the amount of post-event activity, the natural disaster can result in an overall boost to the local economies as they receive an influx of assistance from outside sources such as state governments and the federal government.

By all appearances, Hurricane Matthew should fit this model: Short-term disruption but no longer-term impact.

Effects on workers’ income in affected areas

For workers, the effect of a natural disaster depends, somewhat, on their type of employment. Hourly workers lose income because businesses close during the natural disaster. The cleanup period benefits hourly workers who work in industries that assist in repairing and restoring areas to their pre-event level. This includes construction workers and those in the utility industry who find increased demand and benefit from working more hours and receiving overtime pay.

Low-wage workers in other industries, such as hospitality workers or hourly school employees, suffer longer dips in their pay. They lose income during the time of the natural disaster as businesses slow or shut down temporarily. After the event, businesses in industries such as tourism and hotels, and even higher-end restaurants, find reduced economic activity and so workers in those industries continue to feel the effects.

In most all industries, salaried workers continue to be paid during this time, so their income loss is less. Their income levels feel neither the effect during the event nor see a particular boost after the event.

Workers paid on commission, such as sales workers, lose that business during the natural disaster and even, to some extent afterwards, as cleanup takes precedence over new purchases. Some purchases are postponed, so they are pushed to a future date, while other purchases are cancelled and are never regained.

Effects on workers’ income outside affected areas

For areas taking in evacuees, it means an unexpected but welcome increase in economic activity. These unexpected “guests” purchase goods and services, including hotel rooms, food, and gasoline causing extra work in these areas and creating demand that translates into additional wages for hourly workers in meeting their needs.

Workers in the areas taking in evacuees see a wage “bonus” from the extra demands resulting in a temporary boost to their earnings. When evacuees return to their home areas, this demand slows and earnings return to more normal levels.

Summary

Hardest hit will be low-wage workers who lost wages during the natural disaster and who do not have jobs related to the subsequent cleanup. Those workers suffer a decline in earnings that will not be recovered.

Workers who have skills related to repair and restoration of areas affected by the natural disaster will see a net gain in earnings as work lost due to the natural disaster is more than offset by additional work caused by recovery operations.

While the actual economic impact will not be known for months, maybe for a year, it will be interesting to economists to see how the real impact measures against “conventional economic wisdom”.

It is important that policymakers understand that while the overall impact may not be significant, you cannot overlook how individuals’ earnings are affected by such events.


Thursday, September 29, 2016

Donald Trump's agriculture advisor in Georgia expresses concerns about farm labor

Gary Black, Georgia’s Commissioner of Agriculture and a member of Donald Trump's agriculture policy advisory council, expressed his concern about farm labor issues and their effect on Georgia’s farmers during a listening session that included representatives from the offices of Senators David Perdue and Johnny Isakson.


In a news release after the meeting, he is quoted as saying, “We are talking today about what we need to do now to ensure our farmers have the labor they need in the spring,” said Commissioner Black.

The release goes on to say:

During the meeting Georgia farmers Drew Echols, Russ Goodman and Chris McCorkle relayed the many challenges they faced this year while attempting to use the federal H-2A program. The H-2A program is a critically important tool for America’s farmers and ranchers who need timely, legal and dependable workers to harvest valuable crops which are seasonal in nature.

“There is no debate on the fact that the H-2A program is our best option for harvesting our crops. We just hope to work with the Department of Labor to find ways to strengthen that program in the future,” said blueberry farmer Russ Goodman. “It is very important that they understand that we have a time-sensitive commodity and any amount of delay can have a huge impact on our bottom line.”

The listening session highlighted the need for enhanced coordination to eliminate processing delays within the H-2A program. During the 2016 spring harvest, Georgia farmers faced millions of dollars in crop losses as the Department of Labor struggled to process an increased number of applications for foreign migrant labor.

“We are not here to point fingers, but instead to have a proactive and constructive conversation on how to avoid the missteps from last year and safeguard against it ever happening again,” Black said.

The news release does not mention Donald Trump or his views on immigration policy.


Wednesday, September 28, 2016

State program to help Georgians with their mortgages


The Georgia Department of Community Affairs has launched a new program to help the approximately 150,000 Georgians whose mortgages are greater than the value of their homes.

The Underwater Georgia program is targeted to relieve this pressure by using federal funds to make a one-time payment to reduce the principal balance on their home.

Georgia’s housing market was hit hard by the Great Recession, and some Georgia homeowners still find that their houses are worth less today than before the recession.

Many workers find while job opportunities are increasing, they are unable to move to jobs in new areas because their outstanding mortgage is higher than the selling price of their house. This is causing inefficiencies in the labor market as workers are reluctant to take jobs that will cause them to move and lose money when they sell their residence, which is the principal source of savings for most families.

By reducing homeowners’ mortgage principal, the program hopes to reduce stress in families, improve the housing market, and allow workers to pursue job opportunities even if it requires a move to a new area.

Application process

For three weeks, from September 28-October 18, 2016, Georgia residents will be able to visit www.UnderwaterGeorgia.org to fill out a pre-application for these funds. 

All applications will be assigned a number, which will be sent to a third party for a blind random selection process.  Next, the randomly selected applications will be reviewed, in the order selected, for eligibility and those deemed eligible will continue through the process. 

To be eligible, a homeowner must:

•                    Owe more than home is currently worth. 
•                    Owe no more than $250,000.
•                    Purchased home before 2012.
•                    Less than 90 days late on mortgage.
•                    Mortgage lender is willing to participate.
•                    Have not previously received HomeSafe Georgia assistance.

It is expected that the program will receive more applications than available funding, so it is unlikely that all eligible applicants will receive assistance. Based on current funding, an estimated 2,700-3,000 eligible Georgia homeowners will receive assistance.

How the Program works

According to the Georgia Department of Community Affairs, for successful applicants, a one-time payment will be made to your lender/servicer on your behalf. The funds will be used to reduce your principal balance, usually on the first mortgage. The funds will be provided as an interest-free loan. A subordinate lien will be placed on the home, for which the balance will be forgiven at 20% each year.

After 5 years, the lien will be cancelled.

If you sell your home before the lien is cancelled and you have equity in the home, you will have to repay the portion of the loan that is outstanding. If you sell your home before the lien is cancelled and there is no equity in the home, repayment will not be required. HomeSafe Georgia will subordinate to a “no cash out” refinance.

Determining Eligibility

To see if you are eligible to participate in this program, you may take DCA’s Eligibility Quiz here.

Customer Service representatives will be available 24 hours a day to take calls during the pre-application submission period.

Toll Free: 1-877-519-4443
Para asistencia en EspaƱol, presiene (4) cuatro.

TDD/TYY Line: toll free 1-877-204-1194



Monday, September 26, 2016

Does Georgia’s slower job growth in August mean less employment in December?

Employment tends to follow seasonal variations. These variations are well known and re-occur annually allowing the Bureau of Labor Statistics to adjust their job numbers by making seasonal adjustments.

Take out those seasonal adjustments and you can see that Georgia’s job growth in August was the slowest in six years.

While Georgia added 20,300 nonfarm jobs over the month, this number falls way below the 33,300 jobs added in August 2015. Not since 2010, when the state recorded a rise of 16,000 jobs, has Georgia experienced such a slow August in job creation.

Job growth in Georgia during August, 2006-2016
Despite the state’s unemployment rate dropping to a seasonally adjusted 4.9 percent rate, the employment picture was not as positive as expected.

State’s 12-month job increases declining

While Georgia continues to outpace the nation in job growth, that trend is slowing, which becomes a worrying sign of a potential slowdown in the state.

For the 12 months ending in April, Georgia saw 137,700 net new jobs created in the state. Since then, the 12-month increases have fallen each month, and in August, the 12-month increase was only 107,500 new jobs.

Number of jobs created in Georgia over the previous 12 months, January - August, 2016
It could be that employers are having a rougher time finding skilled workers without wanting to raise wage rates, or companies may be more cautious in their hiring; but for whatever reason, Georgia continues to create new jobs but fewer of them.

Trend not the same for the nation

The drop-off in new jobs did not extend to the nation. The U.S. added 224,000 new jobs (before seasonal adjustment) in August, 25,000 more than recorded for the same month in 2015, although this was fewer than in the month of August for the years 2011 to 2014.

Over the 12 months ending in August, the nation recorded a job growth increase of 1.7 percent (before seasonal adjustment), less than the 2.0 percent growth rate recorded in 2015 or the 1.9 percent rate in 2014, but equal to the growth rates recorded in August 2012 and 2013.

The drop-off in Georgia does not appear to be part of a significant national trend, at least not yet.

Problem is Georgia’s job market outside Atlanta

A key component for Georgia is the Atlanta metro area, which is home to more than 60 percent of the state’s nonfarm employment.

In August, the Atlanta metro area grew by 14,500 jobs, fewer than for the same month in 2015, but representing about 71 percent of the state’s new jobs, way above their normal percentage.

That says that the slowdown is being felt more widely in the rest of the state than in the Atlanta metro area, which is why the slowdown may not be as visible in metro Atlanta.

Slow metro growth continues in Augusta, Columbus, Dalton, Hinesville, and Warner Robins.
In these areas, new job creation is slower than both statewide and the nation, most likely for a variety of reasons including the desire of high-tech and service industries to locate in the Atlanta metro area where the larger percentage of a higher-educated workforce is available, as well as other amenities such as public transportation and cultural opportunities.

Savannah remains a bright spot with 12-month growth at 4 percent, as its combination of port-related activities, professional and business services, and tourism makes it a regional hub.

What does this have to do with December?

Although we tend to connect job growth with a burst each year around the Christmas season as retailers add seasonal hires in November, August is actually a bigger month for hires than November or December in Georgia.

With the exception of 2009, the August job growth number in Georgia has been larger than the comparable number for November or December in that same year since the beginning of the century.

If that trend holds for this year, Georgia’s relatively small 20,300 August job growth will mean a relatively smaller job market in November and December.

While some retailers and fast-food operators might be worried about seasonal hires this year, overall, the job market may not be as tight as anticipated, although wages above the $7.25 mark may still be necessary to entice workers given the ongoing Fight-for-$15 movement.

Workers may find low-paying seasonal jobs in November and December in the $9-$10 range, but better-paying career positions might be harder to find in Georgia, and especially outside the Atlanta metro area, if these trends persist.

For job seekers, the message is to find that new position now and not hope that a tighter job market might raise wages later in the year.

For state policymakers, they should not be complacent about job creation outside the Atlanta metro area. In many smaller metro areas of the state, and for rural areas, the future does not look as bright.

Wednesday, September 21, 2016

New overtime rule will have significant impact on Georgia’s budget


Georgia’s decision to join a 21-state lawsuit to stave off the U.S. Department of Labor’s new overtime rule is more than a matter of political philosophy.

If the new rule goes into effect as planned on December 1, a significant number of the current 137,000 state employees will become eligible for overtime as the threshold for exemption from overtime pay moves up from the current $455 to $913 per week.

In a study conducted in the first quarter of 2016, the average weekly wage for a state employee in Georgia stood at $868. Even with the 3 percent pay raise granted effective July 1 raising the average wage to $894, the average state employee's weekly wage would still fall $19 below the planned new weekly wage threshold meaning that thousands of state employees would become newly eligible for overtime pay.

Taking the data from the first quarter and adding 3 percent to the average rates, only eight counties – Carroll, Chatham, Clarke, Fulton, Heard, Lamar, Peach, and Richmond – show average wages for state employees exceeding the new exemption threshold of $913.

In contrast, in 135 counties the average state employee’s salary fell below the exemption threshold. Sixteen counties did not report wages for state employees separately.

Impact on state budget

The level of impact on Georgia’s budget depends on how the state reacts to the new rule.

In the statement announcing the lawsuit, Georgia Attorney General Sam Olens stated that

“The rule will force many state and local governments to substantially increase their employment costs. Some governments may be forced to eliminate some services and even lay off employees.”

The state could minimize impact by tightening up rules on overtime but this might impact state services, especially in times of emergencies such as ice storms or other natural disasters where state workers are expected to put in extra hours.

Georgia could also raise its personnel budget to cover increased overtime costs, but with other costs rising, such as Medicaid, this will make balancing the 2018 budget more difficult.

Georgia state employees relatively low paid compared to other industries

Part of the reason the state is so impacted by the new rule is that state employment is a relatively low paid form of work compared to a number of other important industries in Georgia.

For example, while state employees averaged $868 per week in the first quarter of 2016, the average weekly wages for construction workers was $1,009. Workers employed in the insurance industry in the state averaged $1,694 and those employed in the real estate industry averaged $1,110 per week.

Among the industries paying on average less than state employment were arts and entertainment ($602), retail ($565), hotels ($473), and food and drinking establishments ($313). Average pay excludes tips, which explains the relatively low pay in the food and drinking industry where many workers’ pay is subsidized by customer tipping.

Averaging $739 per week, local government workers in the state make slightly less than state employees.

If Georgia does not win the lawsuit and the new rule goes into effect December 1, the state will have to reconsider its current approach to human resources and make changes to ensure that personnel costs do not go up substantially to avoid a budget problem next year.

You can read the actual lawsuit that was filed in the U.S. District Court here.


New overtime rule will have significant impact on Georgia’s budget


Georgia’s decision to join a lawsuit brought by 21 states to stave off the U.S. Department of Labor’s new overtime rule is more than a matter of political philosophy.

If the new rule goes into effect as planned on December 1, a significant number of the current 137,000 state employees will become eligible for overtime as the threshold for exemption from overtime pay moves up from the current $455 to $913 per week.

In a study conducted in the first quarter of 2016, the average weekly wage for a state employee in Georgia stood at $868. Even with the 3 percent pay raise granted effective July 1 raising the average wage to $894, the average state employee's weekly wage would still fall $19 below the planned new weekly wage threshold meaning that thousands of state employees would become newly eligible for overtime pay.

Taking the data from the first quarter and adding 3 percent to the average rates, only eight counties – Carroll, Chatham, Clarke, Fulton, Heard, Lamar, Peach, and Richmond – show average wages for state employees exceeding the new exemption threshold of $913.

In contrast, in 135 counties the average state employee’s salary fell below the exemption threshold. Sixteen counties did not report wages for state employees separately.

Impact on state budget

The level of impact on Georgia’s budget depends on how the state reacts to the new rule.

In the statement announcing the lawsuit, Georgia Attorney General Sam Olens stated that

“The rule will force many state and local governments to substantially increase their employment costs. Some governments may be forced to eliminate some services and even lay off employees.”

The state could minimize impact by tightening up rules on overtime but this might impact state services, especially in times of emergencies such as ice storms or other natural disasters where state workers are expected to put in extra hours.

Georgia could also raise its personnel budget to cover increased overtime costs, but with other costs rising, such as Medicaid, this will make balancing the 2018 budget more difficult.

Georgia state employees relatively low paid compared to other industries

Part of the reason the state is so impacted by the new rule is that state employment is a relatively low paid form of work compared to a number of other important industries in Georgia.

For example, while state employees averaged $868 per week in the first quarter of 2016, the average weekly wages for construction workers was $1,009. Workers employed in the insurance industry in the state averaged $1,694 and those employed in the real estate industry averaged $1,110 per week.

Among the industries paying on average less than state employment were arts and entertainment ($602), retail ($565), hotels ($473), and food and drinking establishments ($313). Average pay excludes tips, which explains the relatively low pay in the food and drinking industry where many workers’ pay is subsidized by customer tipping.

Averaging $739 per week, local government workers in the state make slightly less than state employees.

If Georgia does not win the lawsuit and the new rule goes into effect December 1, the state will have to reconsider its current approach to human resources and make changes to ensure that personnel costs do not go up substantially to avoid a budget problem next year.

You can read the actual lawsuit that was filed in the U.S. District Court here.


Tuesday, September 13, 2016

Georgia's uninsured rate drops but remains among the highest in the nation

While the number of Georgia residents without health insurance declined last year, Georgia remains one of only five states with uninsured rates above 12.0 percent.

States with Highest Uninsured Rates: 2015
In 2015, 13.9 percent of the state’s population was uninsured, which translated to more than 1.3 million residents.

“All Georgians and Georgia businesses are affected by this uninsured burden through higher health insurance premiums and the corresponding cost shift on employer-sponsored health insurance,’’ in a statement attributed to Earl Rogers, who serves as president of the Georgia Hospital Association.

Nationally, the uninsured rate is 9.4 percent with Massachusetts recording the lowest uninsured rate at 2.8 percent, as measured by the American Community Survey (ACS), according to a new report from the Census Bureau.



If there was any good news in the report, the percentage of uninsured Georgians has decreased over the past years. In 2013, 18.8 percent of Georgians were uninsured, and in 2014, that number dropped to 15.8 percent.


The drop can be attributed to more individuals receiving insurance through Healthcare.gov under the Affordable Care Act, and an aging population of people 65 and older who fall under the provisions of Medicare, the government’s other major health insurance program.

State continues to resist Medicaid expansion

Georgia remains one of 19 states that have chosen not to expand Medicaid to low-income families, although the federal government has promised to pick up all of the costs of Medicaid expansion.

The failure to insure the population is putting strains on hospitals in Georgia, especially in rural areas, where emergency rooms are required to treat patients regardless of their ability to pay.

Without any form of health insurance, increasing numbers of residents are also finding their way to emergency rooms for non-emergencies, such as the flu, and then are unable to pay their bills.

The lack of an insured population also hurts employers. Employers not providing health insurance must put up with sick employees at their establishments who cannot afford to miss work or seek medical assistance.

Employers who do provide health insurance pay higher premiums to subsidize the losses suffered by hospitals that are required to treat uninsured patients.

When hospitals are unable to collect payments from patients, they then have to increase charges to other paying patients to make up for the losses suffered from uninsured patients. That results in higher health care costs to insurers and higher premiums to those with health insurance.

Georgia Chamber of Commerce prepares options to cover the uninsured

 Some Georgia state legislators, as well as the Georgia Chamber of Commerce, are re-thinking their opposition to Medicaid expansion as more hospitals in the state struggle to stay open. Since 2013, five hospitals in Georgia have closed and many more are having financial difficulties, especially in rural parts of the state.

The health care task force, created by the Georgia Chamber of Commerce, has developed options that they will bring next year to the Georgia General Assembly.

All three options include a requirement that individuals receiving health insurance must pay at least part of the premium costs, and all three options would require a waiver from the federal government because they differ from the standard Medicaid expansion.

Chris Clark, president and CEO of the Georgia Chamber of Commerce, said in a statement that “any of these plans would serve as a game-ready playbook for lawmakers seeking a fiscally responsible and sustainable path to cover Georgia’s uninsured, revitalize a rural health care network in crisis and undergird our safety net hospitals. That’s important not just to the health of our families but also to the health of our economy, because no good jobs are going to come to a region that lacks access to quality health care.”

More information about the Chamber's work regarding health care in Georgia is available here.




Thursday, August 11, 2016

See you in court: New overtime rule means more litigation for Georgia employers


With the new overtime rule effective December 1, 2016, more Georgia employers can expect to be facing their employees and former employees in court.

The new rule raises the minimum salary threshold for exemption from overtime pay from the current $455/week to $913/week ($47,476 per year) and automatically increases the threshold every three years based on wage growth over time.

In Georgia, overtime rules are enforced by the Wage and Hour Division of the U.S. Department of Labor. The agency has the authority to order back wage payments and impose fines for employers who violate the law, but the agency is already dealing with a backlog of complaints and the new rule will only add to their burden of cases.

As a result, more employees and former employees will be turning to private employment attorneys to defend their rights in court.

For companies, this will mean spending substantial amount of time in court defending their job classification systems.

As Atlanta television station WXIA-TV recently discovered when reporting on a story involving a local restaurant, the agency is already struggling to enforce the existing law, and the new rule will simply add to their current backlog.

The television station found that since 2000 Georgia companies did not pay 89,766 employees more than $62 million.

While WHD can impose fines, it is highly unusual, as the television reporter found that of the 6,582 Georgia companies cited by USDOL for wage theft, only 8 percent were required to pay a fine.

The new rule will especially impact employees currently classified as first-level supervisors in low-wage industries such as restaurants and retailing where supervisory duties are mixed with directly dealing with customers.

Filing a lawsuit has always been an option under the Fair Labor Standards Act (FLSA), but with the Wage and Hour Division’s failure to keep up with complaints, it is increasingly likely that civil lawsuits will become preferable to waiting months for an investigation.

A successful lawsuit for back wages can run into $100,000's or more, as employers who lose in court will have to immediately pay both back wages and attorney fees for both sides, not to mention any appeals process.

In comparison, normally the Labor Department is satisfied to see back wages paid, sometimes setting up a payment plan where employers can pay in installments until their obligations are met.

With a potential avalanche of lawsuits facing Georgia companies, many of which are small and medium size employers without in-house legal staff, companies may learn that an administrative investigation by the U.S. Department of Labor is preferable to spending hundreds of hours in court and spending thousands of dollars defending their positions.

If you are one of the 89,766 employees or former employees who thinks you may be owed back wages collected by the U.S. Department of Labor's Wage and Hour Division, you can search their database at http://webapps.dol.gov/wow/ by the employer's name and submit a claim.

What is the Future of Georgia’s HOPE Scholarships?

The Committee to Preserve HOPE Scholarships has issued a new report saying that in 2018, funds for the general HOPE Scholarships will start to decline.  By 2022, funds for full-tuition Zell Miller Scholarships will exceed HOPE, and by 2028, HOPE could be in the red despite an expanding lottery.
 

“While the Georgia Lottery remains popular, the lottery proceeds cannot grow as fast as tuition at Georgia colleges and universities, along with other uses such as the state’s Pre-K and HOPE Grant programs,” explained Michael Wald, an independent economic analyst who reviewed the data that supported the report’s conclusions.

The report estimates that annual increases of 7.5% in tuition costs and 6% in Zell Miller Scholars, while expecting a 2.5% increase in lottery funds.

"Despite a tidal wave of cash from the Georgia Lottery, demand for tuition assistance among Georgia families is overtaking the ability to fund the scholarships as intended," according to Chip Lake, President of the Committee to Preserve HOPE Scholarships as reported on WXIA-TV.

The Georgia Student Finance Commission released a statement to 11Alive's Ryan Kruger saying: 

“The Committee to Preserve HOPE Scholarships is a private entity with no affiliation with the Georgia Student Finance Commission (GSFC). We just received this report and look forward to analyzing it over the coming days. As with any long-term projection, it is critical to understand that there are many factors that can impact program costs – tuition, enrollment, etc.”

A 2013 study by David Sjoquist and John Winters on “The Effects of HOPE on Post-Schooling Retention in the Georgia Workforce” listed the objectives of the HOPE Scholarship program as:

• Increasing academic achievement of high school and college students by promoting and rewarding academic excellence.
• Increasing the percentage of high school students who attend college by making college more affordable.
• Increasing the percentage of the “best and brightest” students who stay in-state to go to college.
• Increasing the quality of the workforce, in part by retaining the “best and the brightest” after they graduate from college.

Their study concluded that “HOPE altered the composition of students enrolled in the USG [University System of Georgia] and that the students who enrolled in the USG because of the HOPE Scholarship are less attached to living and working in the state after college than students who would have attended the USG regardless of HOPE. Policymakers should be conscious of post-schooling retention probabilities when making efforts to attract certain students to attend college in their state.”

A 2011 study by James Condon, published in the Journal of Student Financial Aid found that “the HOPE Scholarship Program has been a tremendous asset to the state of Georgia. The program has been so successful that other states have attempted to model their own programs after it.”

If The Committee to Preserve HOPE Scholarships is correct that the HOPE program will run out of money by the time current kindergarten students are ready to enroll in college, the question remains whether the HOPE program has proved its value and should be preserved or be allowed to phase out as funds fail to keep pace with costs?

Saturday, July 30, 2016

Columbus, Georgia, employment problems larger than Fort Benning

When Georgia Labor Commissioner Mark Butler boasted about Georgia’s job performance in June, he wasn’t thinking about the Columbus, Georgia, area.

While Georgia has added 121,600 jobs over the past 12 months, the Columbus area has added only 500 net new jobs, resulting in an increase of 0.4%. This compares with increases of 2.8% statewide and 1.8% for the nation.

At the same time, the Columbus area’s unemployment rate of 6.6% far exceeds the state’s 5.6% rate (not seasonally adjusted) and the nation’s 5.1% rate.

With the drawdown of soldiers at Fort Benning, some are focusing on this event as the reason for the Columbus area’s poor job numbers. 

The loss of soldiers and their families in the Columbus area will have an impact, but Columbus’s employment problems well preceded recent decisions by the Army.

Columbus has shown almost flat growth since the end of the recession in June 2009. Over that seven-year time period, the area has added only 4,000 net new jobs, fewer than 600 new jobs each year.

More than 40% of them (1,700) came in the relatively low paying leisure and hospitality sector.

Since June 2015, the Columbus area has seen net job losses in the mining, logging, and construction sector, as well as in manufacturing, financial activities, and the professional and business services industries. 

In comparison, while Columbus’s job growth rose by 0.4% over these past 12 months, the Atlanta area expanded by 2.7% and the Savannah area job market has shot ahead by rising 4.1%.

One area where the differences are obvious is in professional and business services. This industry that includes companies performing professional, scientific, and technical activities for others has been one of the Atlanta area’s fastest growing industries.

Over this past year, the sector expanded by 13,900 new jobs, rising 2.9%. In the Savannah area, the growth was even more pronounced as the smaller metro area added 1,900 jobs for growth rate of 10%.

In contrast, Columbus lost a net of 200 jobs over the same 12 month-period.

Even the banking and insurance sector has seen a decline with the Columbus area shedding 100 jobs in this sector. This is particularly remarkable given the area's traditional strength in financial activities, which includes insurance carriers and banks.


While the drawdown at Fort Benning will be a blow to the area’s future, it may prove to be a benefit to the Columbus area if it focuses local leaders on the larger problems they are facing with a stagnant economy even as other parts of the state and the nation are showing significant employment progress.

Friday, July 29, 2016

Georgia’s job growth not consistent across the state

Georgia added 29,800 net new nonfarm jobs for an increase of 0.7% in the first half of 2016 and rising by 2.8% over the year, but much of that growth was concentrated in five metro areas – Atlanta, Savannah, Brunswick, Augusta, and Gainesville, Ga.


The Savannah area continues its hot streak on jobs, adding 3,900 since December for a total of 7,100 over the past 12 months, an increase of 4.1%.

Savannah’s continued job growth is propelling it towards competition with the Augusta area as the state’s second largest metro area. In June 2012, the Augusta area had 58,700 more jobs than the Savannah area. By June 2016, this difference had shrunk by 12%.

Brunswick posted the largest percentage increase for the first half of 2016, rising by 3.1%, or 1,4,00 jobs, for annual increase of 3.3%.

Meanwhile, the state’s largest metro area, Atlanta, is showing some slowdown. While the area added 15,100 jobs since December, this is slower than the numbers it posted for the first half of 2014 (30,700) and the first half of 2015 (15,400).

For the first half of 2016, the Atlanta area posted a job growth rate of 0.6%, the same rate as for the first half of 2015. Over the past 12 months, the Atlanta area added 69,400 jobs for a growth rate of 2.7%, slightly below the state’s overall rate.

Home to 60% of all nonfarm jobs in the state, any slowdown in the Atlanta area is bound to affect statewide numbers.

Hinesville and Columbus areas lagging in jobs

While Georgia continues to experience faster job growth than the nation, not all metro areas in the state are participating in this boom to the same extent. Areas of the state not feeling the effects of the enlarging economy include Hinesville and Columbus.

The Hinesville area recorded a loss of 300 jobs for the first six months of 2016 and has shown no net increase in new jobs since June 2015. The area’s job market continues to stagnate with no net increase in jobs over the past eight years.

The Columbus metro area lost 400 jobs since December partially offsetting a gain of 900 jobs from July through December for a net addition of only 500 jobs since last June. The Columbus area has seen very slow job growth since the recession, rising by only 4,600 net new jobs since June 2010, a net growth rate averaging less than 0.7% per year over the six year period.

Athens lost 100 jobs in the first six months of 2016, although a strong second half of 2015 propelled it to one of the strongest job gains among metro areas in the state for the 12 months ending in June, adding a net of 3,600 jobs for an increase of 4% since June 2015.


The Macon and Valdosta areas showed no net change in jobs since December but both areas showed good growth in the second half of 2015, resulting in 12-month job gains of 2.1% and 2.2% respectively.

Georgia’s job growth continues in the first half of 2016

For the first six months of 2016, the state added 29,800 jobs compared to 26,100 jobs for the same period in 2015, although both numbers were lower than the 37,600 jobs added in the first half of 2014 according to not seasonally adjusted data provided by the U.S. Bureau of Labor Statistics.
Although generally the job growth was seen as showing continued strength, Georgia’s percentage gain fell slightly below the nation. The first half increase represented a 0.7% rise in nonfarm jobs, compared to a 0.8% rise nationally.

Over the 12 months ending in June, the state added 121,600 jobs for an increase of 2.8% compared to a national rate of 1.8%. All numbers are before seasonal adjustment factors. Using seasonally adjusted numbers, Georgia’s over-the-year increase looked even better, rising to 2.9% since June 2015 compared to the nation’s 1.7% increase.

Looking at the over-the-year increase, Georgia Labor Commissioner Mark Butler noted that “when you compare that to the rest of the nation as a percentage growth, we’re actually doing much better than the nation on the average.”

Services and construction industries lead the way

The leisure and hospitality industry outpaced all other industries in the state during the first half of 2016, added 30,700 jobs, twice as many as professional and business services, which added 15,300 jobs for the same time period. Construction continued producing good job numbers adding 7,600 net new jobs over the past six months.

Industries recording fewer jobs over the six months through June included retailing (-11,200), state government (-6,600), and education and health services (-5,100). For these three industries, job losses in the first half of the year are not unusual and all recorded smaller losses than for the same time period last year, except education and health services.

For the 12 months ending in June, professional and business services recorded the highest number of net new jobs (32,700), followed by leisure and hospitality (24,100), retail (16,700), and construction (12,300).

Over the year, the information industry posted the only annual decline, losing 1,700 jobs or 1.6% of its employment total.

Construction and service job growth stronger in Georgia than the nation

Even as employment in the state outpaced the nation, the picture was mixed for different industries.

The remarkable growth in construction jobs in Georgia becomes more obvious when compared to the nation. Over the past 12 months, while construction jobs in Georgia grew by 7.3%, nationally industry employment rose by 3.5%.

Both the leisure and hospitality industry and the professional and business services showed much faster growth in Georgia than in the nation as a whole. Georgia’s leisure and hospitality industry employment has risen by 5.2% over the past year, while nationally the industry has grown by 2.8%.

Professional and business services employment has risen by 5.1% in the state while growing by 2.7% nationally.

Information industry falling behind in Georgia

While employment in some industries is growing faster in Georgia than the nation, other industries are seeing opposite trends.

The information industry saw the opposite trend. While the information industry in Georgia has lost 1.6% of its jobs since last June, the industry’s employment for the entire country has grown by 1.7%.


While education and health services employment in the state grew by 2% over the year, nationally, the industry posted a 3% employment growth rate.

Thursday, July 21, 2016

Workers protest outside of Federal Labor Department offices in Atlanta

The Southeast regional offices of the U.S. Department of Labor's Bureau of Labor Statistics were picketed on Wednesday by 81 employees who work for Office Resources Inc. (ORI), a contractor at the Atlanta offices of BLS.

The group was joined by Charlie Flemming, president of the Georgia AFL-CIO.




An online video of the protest is available here.

The ORI workers are fighting for their first union contract after joining the International Association of Machinists last year.

BLS contracts out part of its collection activities including telephone collection for their Job Openings and Labor Turnover Survey (JOLTS) and the Current Employment Statistics (CES) survey that produces national employment information.

The BLS Southeast Region handles data collection for a number of statistical surveys, including the Consumer Price Index, most of which are collected by federal employees led by long-time Regional Commissioner Janet Rankin.

While BLS is an agency of the U.S. Department of Labor, it has traditionally kept its distance from other USDOL agencies and tried to avoid controversial and political issues.

The agency describes itself as “the principal fact-finding agency for the Federal Government in the broad field of labor economics and statistics.”

The BLS mission “is to collect, analyze, and disseminate essential economic information to support public and private decision-making. As an independent statistical agency, BLS serves its diverse user communities by providing products and services that are objective, timely, accurate, and relevant.”

The BLS Director for Public Affairs was unavailable for comment.


Thursday, July 14, 2016

Federal judge strikes down part of Georgia’s right-to-work law

Unions in Georgia are declaring victory after Senior United States District Judge William C. O’Kelley struck down part of Georgia’s right-to-work statute as contrary to the National Labor Relations Act.

Specifically, the judge granted a summary judgment in favor of Georgia State AFL-CIO Truck Drivers & Helpers Local No. 728, and United Food and Commercial Workers Local 1996, which had challenged the state law that allowed employees to revoke their union membership at any time.

The judge struck down sections 3(d), 4, and 5 of Georgia’s right-to-work statute (Act No. 192 of the Georgia 2013 Session Laws, O.C.G.A. §§ 34-6-21, 34-6-25, and 34-6-26) as unenforceable because it conflicted with the NLRA.

The labor organizations asserted the right to engage in the collective bargaining process without state interference as well as the ability to enter into temporarily irrevocable checkoff authorization agreements pursuant to an enumerated exception in federal law.

According to the National Labor Relations Board web site,

“The NLRA allows employers and unions to enter into union-security agreements, which require all employees in a bargaining unit to become union members and begin paying union dues and fees within 30 days of being hired.

Even under a security agreement, employees who object to full union membership may continue as 'core' members and pay only that share of dues used directly for representation, such as collective bargaining and contract administration. Known as objectors, they are no longer full members but are still protected by the union contract. Unions are obligated to tell all covered employees about this option, which was created by a Supreme Court ruling and is known as the Beck right.

An employee may object to union membership on religious grounds, but in that case, must pay an amount equal to dues to a nonreligious charitable organization.

24 states have banned union-security agreements by passing so-called "right to work" laws. In these states, it is up to each employee at a workplace to decide whether or not to join the union and pay dues, even though all workers are protected by the collective bargaining agreement negotiated by the union.”

Even in those circumstances, Judge O’Kelley found that union members in Georgia could not arbitrarily stop paying union dues at will.