Friday, July 28, 2017

No sign of wage inflation as labor costs remain low

Wage inflation remains low
Employers continue to have the upper hand in controlling labor costs, as the government’s broadest gauge showed that private industry wages and salaries have increased only 2.4% and costs for benefits have risen only 2.2% over the past year.

While job growth continues to be strong and the unemployment rate falls, employers continue to find workers without having to steeply increase pay rates or provide more expensive benefits to attract and retain their employees.

Gains in wages actually slowed in the second quarter of 2017 with the Employment Cost Index’s quarterly report on private industry wages and salaries recording a seasonally adjusted increase in June of 0.5% as compared to a 0.9% increase for the first quarter of the year.

Benefit costs rose by 0.6% over the three months ending in June, the same percentage increase recorded for the previous quarter.

For workers in the South, private industry wages rose at a slower pace than for the nation as a whole, increasing 1.7% for the 12 months ending in June.

In comparison, the Consumer Price Index for All Urban Consumers (CPI-U) has risen 1.6% for the U.S. and 1.5% for the South Region in the 12 months ending in June.

As a result, the costs for employing workers continues to rise faster than the overall inflation rate, although the rate of increase for labor costs remain subdued.


Some economists believe that without a substantial increase in wage inflation resulting in larger take-home pay for workers, overall inflation will remain below the Federal Reserve’s target of 2%.

Wednesday, July 26, 2017

Georgia’s economy grows faster than U.S. and Southeast in the first quarter of 2017


Real gross domestic product (GDP) in Georgia increased at an annual rate of 1.7% in the first quarter of 2017, according to newly released information from the U.S. Bureau of Economic Analysis (BEA).

The increase was greater than for the U.S. (1.2%) and the Southeast (1.5%).

Gross domestic product (GDP) by state is the market value of goods and services produced by the labor and property located in a state. The U.S. values may differ from the values in the national income and product accounts (NIPAs) because the GDP by state accounts exclude federal military and civilian activity located overseas (because these activities cannot be attributed to a particular state).

For Georgia, the increase in the first quarter of 2017 compares to a 1.8% increase in the fourth quarter of 2016 and a 6.5% increase in the first quarter of 2016.

Georgia’s GDP in the first quarter of 2017 was $537,264,000,000 (seasonally adjusted at annual rates).

The state contributed 2.8% of the nation’s total GDP in the first quarter, slightly down from its 2.9% contribution in the first quarter of 2016.

Georgia Growth Industries

Industries in Georgia recording the greatest annualized growth rates in the first quarter of 2017 included Wholesale Trade (0.36%); Government (0.28%); Nondurable-goods Manufacturing (0.25%); Construction (0.23%); and Agriculture, Forestry, Fishing, and Hunting (0.19%).

Industries that subtracted from real growth in the first quarter of 2017 included Utilities (-0.15%) and Retail Trade (-0.14%).  

Southeastern State GDP

States in the Southeast with higher rates of growth than Georgia included West Virginia (3.0%), Virginia (2.0%), Alabama (1.9%) and Kentucky (1.8%).

In the Southeast, North Carolina recorded the lowest annualized real growth rate in the first quarter of 2017, rising by only 0.7%.

Nationally, real GDP by state in the first quarter ranged from 3.9 percent in Texas to –4.0 percent in Nebraska.

National GDP

For the nation as a whole, industries showing the greatest annual rate of increase in the first quarter included Real Estate and Rental and Leasing (0.35%), Mining (0.32%), Durable Goods Manufacturing (0.29%), and Nondurable-goods Manufacturing (0.26%).

GDP by state is the state counterpart of the Nation's GDP, the Bureau's featured and most comprehensive measure of U.S. economic activity.


Current-dollar statistics are valued in the prices of the period when the transactions occurred—that is, at “market value.” Also referred to as “nominal GDP” or “current-price GDP.” Real values are inflation-adjusted statistics—that is, these exclude the effects of price changes. 




Friday, July 21, 2017

Metro Atlanta’s job growth drives Georgia’s growth

After two months of small declines, Georgia’s employers rebounded sharply in June, adding 27,400 jobs over the month according to newly released data from the U.S. Bureau of Labor Statistics. It was the largest one-month jump in hiring in over six years.

The new jobs added in June pushed the total number of jobs added over the past year to 122,600, well above the 111,200 jobs added for the same period in 2016.

The state’s unemployment rate relatively unchanged at 4.8% in June compared to May. In June 2016, the state’s unemployment rate stood at 5.3%.

Over the past year, Georgia’s labor force grew by 134,941 persons as the number of people employed in Georgia rose by 153,335 while the number counted as unemployed dropped by 18,394.

Metro Atlanta

The metro Atlanta area added 23,900 in June and accounted for 87% of the state’s new jobs. Over the past year, metro area employers have added 93,700 jobs.  

Increasingly, the metro Atlanta area drives the state’s job market.

At the beginning of 2007, metro Atlanta accounted for 58.9% of the state’s employment. With the new counts for June, that percentage has risen to 61.3%.

Signs of Wage Inflation

With Georgia’s job growth coming in at 2.8% over the year compared to the nation’s 1.6% growth rate, pressures are rising on employers to raise compensation to retain and attract workers.

Earlier in the week, the Bureau of Labor Statistics released a report detailing weekly earnings for full-time wage and salary workers for the second quarter of 2017.

The median weekly earnings of the nation's 113.4 million full-time wage and salary workers
were $859 in the second quarter of 2017 (not seasonally adjusted).

This was 4.2 percent higher than a year earlier, compared with a gain of 1.9 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period.

While BLS does not release similar data for individual states, Georgia (and especially the Atlanta metro area) is not immune to the wage pressures being seen elsewhere in the nation.

All data in this report are seasonally adjusted unless noted otherwise.


Wednesday, July 12, 2017

Crippling Medicaid Cuts Could Upend Rural Health Services in Georgia



 


When her pregnancy hit a crisis, Ginger Peebles rushed to her hospital in Swainsboro, Ga., where daughter Brenlee Pepin was born healthy. But that hospital closed a year later, a casualty of the financial problems plaguing rural areas. (Family photo courtesy of Kimberly Howell)
ATLANTA — Each day as Ginger Peebles watches daughter Brenlee grow, she sees the importance of having a hospital close by that delivers babies.
Brenlee’s birth was touch-and-go after Peebles realized something was wrong. “I couldn’t feel the baby move, and my blood pressure was sky-high,” said Peebles, a nurse.
Dr. Roslyn Banks-Jackson, then an OB-GYN specialist at Emanuel Medical Center in Swainsboro, Ga., diagnosed preeclampsia, a potentially lethal complication of pregnancy, and induced labor to save Peebles and the baby. Brenlee was born on Oct. 28, 2014, completely healthy.
Had Peebles given birth the following year, she might not have been so fortunate, she said. Emanuel shuttered its labor-and-delivery unit the next spring, becoming one of a handful of such units in the state to close from 2010 to 2015, most because of budget problems. Another is expected to close this month, said Daniel Thompson, executive director of the Georgia OBGyn Society.Republican bills to replace the federal health law would worsen rural areas’ financial straits through reductions in Medicaid funding. Patient advocates predict that would lead to fewer enrollees, more shutdowns of rural facilities, reduced payments to doctors and fewer programs for people with health needs or disabilities. In the aggregate, such changes threaten the health of thousands of state residents, especially those in rural areas.
“I’ve seen changes, and I’ve seen cuts, but I’ve never seen changes like what’s being proposed in this bill,” said Eric Jacobson, executive director of the Georgia Council on Developmental Disabilities. “This is the first time it’s been this scary.”
Possible Strains On A Lean Budget
One of the key aims of the House and Senate bills is reversing the Affordable Care Act’s expansion of Medicaid. But the legislation also would institute changes to the federal-state health program for low-income residents that could devastate states such as Georgia that didn’t expand Medicaid. Georgia already ranks 45th in the nation in per capita Medicaid spending, according to the Georgia Budget and Policy Institute.
The bills would switch Medicaid from an entitlement — in which the federal government agrees to pay its share of costs for anyone who qualifies for the program — to a system in which the federal government by 2020 would limit its payments and reimburse states based on a per capita formula.
The nonpartisan Congressional Budget Office concluded in a report released June 29 that the Senate plan would slash 35 percent of expected federal Medicaid funding by 2036.
“Cuts now would cripple rural Georgia,” said Dr. Ben Spitalnick, president of the Georgia chapter of the American Academy of Pediatrics.
He said that is because most primary care visits, which include OB-GYN, pediatric and adult care, in the state’s sparsely populated areas rely heavily on Medicaid reimbursements.
The federal cutbacks would have to be offset by the state. But that means taking money from other programs or raising taxes. As a result, state officials facing those shortfalls would likely scale back an already lean Medicaid coverage.
“If you cut back, [people] still go to the hospital, they’ll still need care. No matter what you do, the buck stops somewhere,” said Renee Unterman, a Republican state senator who chairs the health and human services committee. In the end, she added, the cost for that uncompensated care gets passed to taxpayers and consumers through higher health costs and insurance premiums.
Georgia’s rural hospitals have proved vulnerable. Five closed in the past five years and another two merged. Plus, several have closed their emergency rooms.
That translates to a loss of doctors in affected counties. Of Georgia’s 159 counties, 79 do not have an OB-GYN specialist, and 65 do not have a pediatrician, according to 2015 figures from the Georgia AAP and the Georgia OBGyn Society.
Close to 1.7 million Georgians, or nearly 1 in 5 state residents, live in these areas, according to figures from the Rural Health Information Hub.
Improving Pay For Doctors
For 15 years, Georgia Medicaid reimbursed primary care doctors at only 60 percent of the amount that the federal Medicare program reimbursed similar services, said Ward.
But in 2015, the Legislature implemented three rounds of pay increases to primary care doctors, including pediatricians and OB-GYNs, to bring them in line with the Medicare reimbursement.
Many of these doctors are now concerned those rates would be the first to be lowered. “That’s our big fear,” said Rick Ward, executive director of the Georgia chapter of the AAP. “We just clawed our way back and to deal with it again would just be unbelievable.”
Key among those concerns are prenatal care in rural areas. With a maternal mortality rate that is among the worst in the country, OB-GYNs are worried that the cuts would eliminate fragile solutions to doctor shortages that the state has implemented.
For example, pregnant, low-income women in 17 counties around Augusta can arrange for a ride in a van, paid for by Medicaid, for their prenatal visits at the medical school at Augusta University. The service has been vital in keeping these women healthy and insuring successful births. Advocates fear it is the type of program that could face problems if Medicaid funding becomes tight.
People With Disabilities Fearful
Advocates for residents with disabilities worry that home health care would be likely to suffer from the cuts.
That’s because while states are required under Medicaid to pay for nursing home stays, care for people living at home has been optional.
About 38,000 people in the state get the services, also called community-based benefits. Qualifying takes years, and benefits are not guaranteed, even for people who are eligible. Almost 10,000 Georgians are on the waiting list, according to Jacobson, because there is not enough money in the Medicaid budget to cover everyone.
One of those who is getting coverage is Joshua Williams, 22, who has severe cerebral palsy and needs constant care at home and school.
“I’m terrified” that funding cuts could end the program, said his mother, Mitzi Proffitt, 53. “I’d have to quit my job” to take care of him. Williams’ stepfather, Jack Proffitt, 65, has advanced cancer and cannot provide much assistance.Nursing home or institutional care for a year, on average, is $172,280, said Jacobson, while the average home health care is $28,901.
Williams, who is on the dean’s list at East Georgia State College in Swainsboro and loves NASCAR, also admits to being “very scared.” He said if his coverage is discontinued, he would have to drop out of college, ruining his hopes of becoming a sports broadcaster. He is eager to get a part-time job until he graduates.
“I want to work. I don’t want handouts,” he said.
A supporter of President Donald Trump’s, Williams said he is counting on the president to keep disability benefits in place and to ensure that health care is affordable for all.
“He thinks that if Trump knew his story, he’d get on this and fix things,” said Mitzi Proffitt.
“I like him because he’s a businessman, but he said he has heart,” Williams added.
Joshua Williams, who receives home health care services through Medicaid, is worried about funding changes being considered by Congress. But he is counting on President Donald Trump to keep disability benefits in place because “he said he has heart.” (Photo by Virginia Anderson/KHN)

This story was originally published by Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

Friday, July 7, 2017

Georgia’s metro edge counties showing fastest job growth


Counties on the edge of Georgia's metro areas are showing some of the fastest job growth rates, according to recently released information from the U.S. Bureau of Labor Statistics.

The 2007-2009 national recession hit Georgia hard. Between December 2007 and December 2009, more than 8% of jobs in the state disappeared.

As we all know now, since then, the state has experienced a strong rebound in jobs, stronger than the nation as a whole. Since December 2009 through the end of December 2016, the state has gained more than half-a-million new jobs, more than offsetting previous losses.

The story of job growth in Georgia since the recession has been the increasing urbanization, as employment growth concentrated in the state’s metro areas, especially in the Atlanta and Savannah metros.

What is less obvious is that some of the strongest post-recession growth has been not in the core counties in these metro areas, but in their so-called “edge counties”, those counties at the periphery, but still included in the metro areas.

These counties have a host of advantages including lots of lower price land that can be developed at lower cost, along with lower taxes, while still being in commuting range of urban centers.

And this story isn’t just about the Atlanta metro area. Non-core counties are showing remarkable job growth in a variety of metro areas around Georgia.

The job numbers speak for themselves (December 2009-December 2016):


  • Twiggs County (Macon MSA): Added 1,317 jobs (+133.4%)
  • Burke County (Augusta MSA): Added 4,570 jobs (+77.0%)
  • Jackson County (Atlanta MSA): Added 9,745 jobs (+59.1%)
  • Echols County (Valdosta MSA): Added 230 jobs (+45.1%)
  • Bryan County (Savannah MSA): Added 2,415 jobs (+42.9%)
  • Oconee County (Athens MSA): Added 3,199 jobs (+40.6%)
  • Jones County (Macon MSA): Added 1,329 jobs (+40.2%)
  • Forsyth County (Atlanta MSA): Added 20,033 jobs (+38.0%)
  • Monroe County (Macon MSA): Added 1,871 jobs (+32.8%)
  • Troup County (Atlanta MSA): Added 9,816 jobs (+32.7%)

For the most recent time frame (December 2015-December 2016), the story remains the same, with Twiggs, Burke, and Oconee counties showing the highest percentage job growth for Georgia counties in metro areas, followed by Meriwether, Murray, and Jackson counties.

Here are the county job growth numbers for the top 10 metro counties between December 2015 and December 2016 (most recent data available from the U.S. Bureau of Labor Statistics):


  • Twiggs County (Macon MSA): Added 1,156 jobs (+100.7%)
  • Burke County (Augusta MSA): Added 3,533 jobs (+50.7%)
  • Oconee County (Athens MSA): Added 1,092 jobs (+10.9%)
  • Meriwether County (Atlanta MSA): Added 422 jobs (+9.7%)
  • Murray County (Dalton MSA & Chattanooga MSA): Added 880 jobs (+9.6%)
  • Jackson County (Atlanta MSA): Added 2,115 jobs (+8.8%)
  • Lee County (Albany MSA): Added 491 jobs (+8.1%)
  • Walton County (Atlanta MSA): Added 1,520 jobs (+7.2%)
  • Paulding County (Atlanta MSA): Added 1,531 jobs (+7.0%)
  • Oglethorpe County (Athens MSA): Added 107 jobs (+6.9%)

Admittedly, many of these counties start from a low employment base, which makes it easier to reach the high percentage increases, but consistently, these high job growth counties share one common feature: They are located in a metro area, but are not the core county for that area.

The fast growth of these “edge counties” calls into question earlier reports that people were abandoning the suburbs in favor of urban cores.

Judging from the data, it appears that while Georgia is participating in the general trend towards urban areas over rural ones, many citizens of the state are increasingly able to find work not in the urban core but at the outer edges of these increasingly metro areas.