Showing posts with label georgia labor force. Show all posts
Showing posts with label georgia labor force. Show all posts

Friday, August 20, 2021

Georgia did not reached its pre-pandemic employment levels in July

 

Georgia released its statewide employment data for July 2021 on August 19. In announcing that the state’s unemployment rate had dropped to 3.7 percent, the Georgia Department of Labor news release headline read: 

Unemployment Rate Drops to Pre-Pandemic Level in July (GDOL News Release)

 While the good news is that the state’s unemployment rate did drop by three-tenths of one percent from June to July, the state has not yet achieved the levels it had gained in March 2020 before pandemic-related cutbacks and closures caused a sharp increase in the state’s unemployment rate and an equally sharp contraction of its employment levels. 

Unemployment rate

In October 2019, the state reported a record low unemployment rate of 3.3 percent, which it maintained through January 2020; but by February, the rate was starting to creep upwards, reaching 3.6 percent in March 2020.   

Layoffs exploded in April 2020, with the state reporting an unemployment rate of 12.5 percent. Since then, there has been a continual reduction in the unemployment rates up to the present.

Unemployment rates are typically published to only one decimal point, but it is possible to carry out the calculation to multiple decimal points and carrying out the calculation to four decimal points, one can see that the March 2020 rate was technically 3.5923 percent. 

This compares to the July 2021 rate of 3.7421, or a difference of 0.1498 percentage points, which falls within the limits of what the U.S. Bureau of Labor Statistics would call statistically insignificant, so the State of Georgia chose to declare it had reached the pre-pandemic level of March 2020 because the state labor agency could technically defend the statement. 

The Georgia Commissioner of Labor, Mark Butler, could have waited until the August numbers are published to confirm that that the state’s unemployment rate had reached pre-pandemic levels, but that would have been taking the risk that the seasonally adjusted unemployment rate for August might not continue to show a decline. 

Labor force, employment, and unemployment



While the number of unemployed in Georgia has steadily declined as the number of people employed has increased, neither measure equals the levels achieved in March 2020. 

From March 2020 to July 2021, the number of unemployed has increased by 6,491, while the number of employed individuals has dropped by 41,424. 

As a result, the state’s labor force, which is by definition a combination of employed and unemployed, has actually declined by 34,933, or nearly 0.7 percent. 

This brings the state’s labor force slightly below the level it reached in October 2019, even though the state’s population has continued to increase. 

The situation is also reflected in other data published by BLS for Georgia. Georgia’s labor force participation rate has declined from 62.9 percent in March 2020 to 61.7 percent in July 2021. Labor force participation rate is defined as representing the number of people in the labor force as a percentage of the civilian noninstitutional population. In other words, the participation rate is the percentage of the population that is either working or actively looking for work. 

Georgia’s employment-population ratio has also dropped from 60.7 percent in March 2020 to 59.4 percent in July 2021. The employment-population ratio represents the number of employed people as a percentage of the civilian noninstitutional population. In other words, it is the percentage of the population that is currently working. 

What happened to these people? Statisticians do not know. Some may have chosen to retire, others may have simply dropped out of the labor force. Whether and when they will re-enter the labor force is also unknown. What is known is that there is a group of former workers who so far have not been re-employed as of July 2021, so implying that the state has fully recovered its pre-pandemic levels seem premature at best. 

Nonfarm employment

 

The State of Georgia and BLS also publish a separate monthly survey of nonfarm jobs, and this also confirms that the state has not yet reached its pre-pandemic levels. 

In July 2021, nonfarm jobs in Georgia totaled 4,572,100. While this was a good increase from June (up by 43,600), it still leaves the state 64,900, or 1.4 percent, short of the number obtained in March 2020 and more than 94,000 jobs short of the highest level achieved in February 2020. 

Much of this shortfall can be attributed to the disappearance of jobs in the Atlanta metro area, where July’s jobs total of 2,797,200 is still 67,100 jobs below the level it achieved in March 2020, and 89,500 short of its peak in January 2020. 

Whether the state, and the nation, can continue to grow its employment base remains to be seen, as Covid-related variants raise questions about the ongoing strength of the economy through the end of 2022, but in any case, there is still more work to be done to re-establish all the employment that has been lost from the pre-pandemic time.

 

Note: All data discussed are seasonally adjusted. Seasonal adjustment is a statistical procedure that removes the effects of normal seasonal variations—resulting from events such as holidays, school openings and closings, and weather—from data series. Seasonally adjusted data make it easier to observe cyclical and other economic trends, such as those associated with general economic expansions and contractions. For further information, see Seasonal adjustment of Current Population Survey (CPS) estimates.

Charts are from the bls.gov website.

Saturday, February 20, 2021

Georgia one of only four states with a greater than 30% African American labor force compared to 12.6% nationally; large variations in employment by industry

 

Source: U.S. Bureau of Labor Statistics


African Americans represented a 31.9 percent share of Georgia’s labor force in 2020, one of only four states and the District of Columbia, where African Americans’ share of the labor market exceeded thirty percent, according to newly released data from the U.S. Bureau of Labor Statistics. 

The other states included Mississippi (35.5 percent), Maryland (31.5 percent), and Louisiana (31.0 percent). In the District of Columbia, African Americans comprised 35.0 percent of the labor force. By comparison, African Americans accounted for 12.6 percent of the U.S. labor force. BLS defines labor force as the sum of the number of employed and unemployed persons in a labor market.

African Americans employment by industry for the United States in 2020 

BLS does not provide a current breakout by race for the number of people employed by detailed industries in Georgia, but in a separate report, BLS has published the number of people employed by detailed industry and race for the nation. 

Nationally, African Americans accounted for 12.1 percent of all employed workers in 2020, but these percentages vary considerably by industry from zero percent to more than 33 percent. 

Industries with a workforce that includes a much higher-than-average share of African American workers in 2020 include:

  • Bus service and urban transit (33.4%)
  • Psychiatric and substance abuse hospitals (30.6%)
  • Home health care services (28.8%)
  • Investigation and security services (28.4%)
  • Barber shops (28.0%)
  • Nursing care facilities (skilled nursing facilities) (27.7%)
  • Community food and housing, and emergency services (social assistance) (27.3%)
  • Taxi and limousine service (27.1%)
  • Postal Service (24.8%)
  • Couriers and messengers (23.9%)
  • Warehousing and storage (23.5%)
  • Administration of human resource programs (public administration) (22.8%)
  • Residential care facilities, except skilled nursing facilities (21.7%)
  • Individual and family services (social assistance) (20.6%)
  • General merchandise stores, including warehouse clubs and supercenters (20.3%)
  • Business support services (20.1%)
  • Animal slaughtering and processing (20.0%)

 

Industries with a workforce that includes a fewer-than-three-percent share of African American workers in 2020 include:

  • Machinery, equipment, and supplies merchant wholesalers (2.8%)
  • Crop production (2.8%)
  • Farm product raw material merchant wholesalers (1.8%)
  • Alcoholic beverages merchant wholesalers (1.8%)
  • Electronic and precision equipment repair and maintenance (1.7%)
  • Fuel dealers (retail) (1.6%)
  • Miscellaneous durable goods merchant wholesalers (1.3%)
  • Metalworking machinery manufacturing (1.2%)
  • Coating, engraving, heat treating, and allied activities (1.0%)
  • Lawn and garden equipment and supplies stores (1.0%)
  • Other than automobile motor vehicle dealers (0.9%)
  • Nonmetallic mineral mining and quarrying (0.8%)
  • Software publishers (0.4%)
  • Forestry, except logging (0.0%)

 

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Four states and D.C. had labor force that was more than 30 percent African American in 2020 at https://www.bls.gov/opub/ted/2021/four-states-and-dc-had-labor-force-that-was-more-than-30-percent-african-american-in-2020.htm (visited February 20, 2021). 

Labor force statistics from the Current Population Survey: Employed persons by detailed industry, sex, race, and Hispanic or Latino ethnicity at Employed persons by detailed industry, sex, race, and Hispanic or Latino ethnicity (bls.gov) (visited February 20, 2021).

Sunday, September 27, 2020

Georgia’s reported Unemployment Rate decline is misleading

Georgia Labor Force, not seasonally adjusted, January 2019 to August 2020

Source: U.S. Bureau of Labor Statistics


Georgia reported its August employment figures and highlighted a decline in its unemployment rate from 7.6% in July to 5.6%, after seasonal adjustment. The state headlined the claim that Georgia had achieved the seventh lowest unemployment rate in the nation.

Analyzing the data, a truer picture appears that is less positive than the overly optimistic story put out by the Georgia Department of Labor.

Unemployment rates in Georgia declined in August 2020, not because people found work, but because large numbers of people gave up searching for a job.

Even a cursory analysis would show that after seasonally adjusting the data, Georgia saw employment rise by 21,000 over the month, too few to account for the large decline in its unemployment rate.

Counting workers before seasonal adjustment, the actual number of people with jobs actually declined over the month by more than 12,000, while the number of people working in August 2020 fell by more than 303,000 below the number recorded 12 months ago.

Labor Force Statistics

The U.S. Bureau of Labor Statistics defines the labor force to include all people age 16 and older who are either working or actively seeking work.

Statewide, Georgia’s labor force dropped by more than 128,000 over the month, according to information provided by the Georgia Department of Labor, Workforce Statistics & Economic Research. This decline in the labor force accounted for most of the drop in the unemployment rate.

Georgia’s lower unemployment rate compared to other states can be explained by the higher percentage of people in Georgia who gave up their job search.

Georgia recorded a 2.5% decline in its labor force in August. Nationwide, the number of people leaving the labor force declined by 0.25%.

Compared to August 2019, the state’s labor force declined by more than 203.000, which translates to a 4% drop. The nation’s labor force fell by 1.8% over the past 12 months.

Georgia’s population continues to increase so it is unlikely that those leaving the labor force also left the state. More likely, people became discouraged about their job prospects and decided to stop looking for work.

Georgia’s Metro Areas

All metro areas in the state reported decreases in their labor force compared to July and a year ago.

The Atlanta metro area is the largest job market in the state and recorded the largest decline in its labor force, dropping by more than 87,000 over the month and declining by more than 114,000 since last August.

The Dalton area, with its heavier reliance on manufacturing, recorded the largest percentage drop in August, down 3% over the month.

Brunswick MSA reported the largest over-the-year percentage labor force decline with a drop of more than 13%.

Georgia’s Regional Commissions

The state has set up 12 regional commissions to assist local governments in areas such as workforce devlopment. 

Among the commissions, the Atlanta Regional Commission, which includes the city of Atlanta and surrounding counties, recorded the largest labor force drop with a decline of more than 71,000 from July to August and a drop of more than 81,000 from August a year ago.

The area covered by the ARC accounted for 55% of the decline in the state’s labor force, even though it is home to 47% of the workers included in Georgia’s labor force numbers.

Over the month, the Three Rivers Regional Commission, which includes counties in West Central Georgia, recorded the largest percentage drop, down more than 3%.

Compared to last year, the Central Savannah River Area Regional Commission reported the largest decline, down more than 5.5%. The CSRA covers 13 counties in the eastern part of Central Georgia.

Dangers in using data in a misleading manner

Information, such as unemployment rates, are important economic indicators that help guide local, state, and national policymakers in their decisions affecting the economy.

When the numbers are misread or intentionally misreported, it can skew economic decisions regarding taxes, social programs, and economic development plans.

Decision makers and the public need a clear understanding of the current economic situation and providing misleading interpretations of the information available can result in poor economic decisions that damage the state’s future.


Georgia Labor Force estimates are available here.


Thursday, August 13, 2020

How bad is Georgia hurting? State receives first $85 million installment of $1.1 billion loan request for unemployment trust fund

 

In June, the Tax Foundation published a study of state unemployment insurance trust funds. 
Georgia ranked at #21 out of 50. Since then, the picture has continued to deteriorate.
Map Source: Tax Foundation

Before March, Georgia looked to have one of the more solvent unemployment insurance trust funds. 

That is no longer true, as Georgia is receiving an $85 million loan to replenish its unemployment trust fund, which is quickly running out of cash as the state’s insured unemployment rate remains elevated.

The funds are the first installment of a $1.1 billion request made to the U.S. Department of Treasury by Governor Kemp, as reported by The Center Square

Figures from the most recent Unemployment Insurance Weekly Claims report published by the U.S. Department of Labor shows that 633,988 people in Georgia were receiving unemployment insurance benefits as of July 25, 2020, in contrast to the 25,618 people who received them a year ago. 

As of the end of July, the state’s insured unemployment rate stood at 14.4%. 

The Georgia Department of Labor announced that as of July 28, 2020, the trust fund balance was $585,483,621, down $1.962 billion, or 77 percent, from the March 24 balance of $2,547,476,454.  

Last month, Governor Kemp as the U.S. Department of Treasury to loan Georgia $85 million in August, $585 million in September, and $430 million in October. The current loan is the first installment related to that request. 

States that receive loans are expected to repay that money to the U.S. Treasury by either increasing state’s payroll tax on employers or from general funds. 

Interest is usually paid from the state’s general fund, and payroll taxes will most likely increase, potentially hurting workers and employers, Greg Georgia, director of the Center for Economic Analysis at Middle Georgia State University, told The Center Square. 

"When the state has to borrow money to supplement that fund now, that's probably general fund spending," George said. "So, it's just a way of spreading the pain to the broader taxpayer base." 

In June, the Tax Foundation conducted an analysis of the solvency of states’ unemployment insurance trust funds and noted that Georgia ranked 21st in its solvency level at 1.25. Any state with a solvency level of 1.0 or greater was deemed to have unemployment insurance sufficient to weather a recession. 

California ranked worse at number 50 with a solvency level of 0.21, while Vermont controlled the most solvent of the state trust funds with a solvency rank of 2.53. 

Despite the high number of claims being paid weekly by the Georgia Department of Labor, there are still accusations that the department has failed to pay all claims dating back to the middle of March. 

The state says it has paid benefits on 92% of valid claims since March. 

“As additional claims are being filed, we have been able to maintain an impressive ratio of eligible claims filed to payouts,” said Labor Commissioner Mark Butler. “Record breaking payout rates represent a new standard for this department as we strive to better serve Georgians.”


Friday, January 24, 2020

Atlanta area accounts for all of Georgia’s net job growth in the 4th quarter of 2019

Georgia job growth, 2006-2019

Source: U.S. Bureau of Labor Statistics

As job growth in Georgia continues to slow, all of the state’s job growth was concentrated in the Atlanta metro area, while the rest of the state actually recorded a net job loss in the final quarter of 2019.

Preliminary data released by the U.S. Bureau of Labor Statistics shows that Georgia added 17,700 new jobs in the 4th quarter of 2019 with the Atlanta metro area growing by 22,600 jobs while the rest of the state lost 4,900 jobs between October and December.

For the year, Georgia added 66,700 job. In contrast, the state added 92,500 jobs in 2018 and 69,400 jobs in 2017.

The state recorded a growth rate of 1.5%, its slowest calendar year rate of increase since 2011.
The state did set a series low unemployment rate of 3.2% in 2019 as the number of unemployed workers in the state dropped by 14,742 in the 4th quarter.

Over the year, the number of unemployed dropped by 29,176 while the state’s labor force grew by 17,653. The combination of slower growth in the state’s labor force with fewer people seeking work contributed to the decline in the unemployment rate.

Georgia labor force, 2014-2019

Source: U.S. Bureau of Labor Statistics

Atlanta was key to job growth


Atlanta metro area job growth, 2006-2019

Source: U.S. Bureau of Labor Statistics


The metro Atlanta region added 65,700 jobs in 2019, an increase of 2.3%, its best calendar year increase since 2016.

Excluding the Atlanta metro area, the rest of the state added only 1,000 jobs over the past 12 months.
The small net increase for all counties excluding the Atlanta metropolitan statistical area was the worst showing since 2011.

Other metro areas in Georgia


While many of the metro areas showed some employment gains in 2019, the number of jobs added were below those added in 2018.

Albany recorded a 500 job decline in the 4th quarter of 2019 and a loss of 100 jobs for calendar year 2019.

Athens posted a 1,100 job gain for the quarter and a 1,400 net job gain for the calendar year.

Augusta recorded a 100 job gain for the quarter and added 2,800 jobs for the year.

Brunswick showed zero net job growth over the quarter and a 700 job gain for the year.

Columbus lost 600 jobs over the quarter and was down by 1,400 jobs for the year.

Dalton added 200 jobs over the quarter with a net gain of 300 jobs over the year.

Gainesville showed an increased of 700 jobs for the quarter with a net addition of 3,500 jobs for the year.

Hinesville lost 100 jobs in the quarter but posted a 400 job gain for the year.

Macon added 100 jobs in the quarter with the result of a 700 job gain over the year.

Rome gained 300 jobs over the quarter and posted a 1,100 job gain for the year.

Savannah added 1,400 jobs in the quarter and ended the year with a net gain of 2,100 jobs.

Valdosta gained 300 jobs over the quarter and ended the year with a net gain of 700 jobs.

Warner Robins added 100 jobs in the quarter and gained 1,300 jobs over the year.

Statewide jobs numbers and unemployment are a combination of metropolitan and rural parts of Georgia and includes information for 159 counties. Net gains for the metropolitan areas in the state cannot be measured by simply totaling the changes for each area. Some metropolitan statistical areas stretch over two states, so some metro job numbers include jobs gained or lost outside of Georgia. For example, the Columbus area includes parts of Alabama.

When BLS compiles the state data for Georgia, the agency excludes counties located in other states in their statewide data but includes them when measuring metro area job numbers and unemployment rates. As it happens, the Atlanta metro area includes only counties in Georgia, so by subtracting the Atlanta metro numbers from the statewide figures, it is possible to compare the Atlanta metro region to the rest of the state.

Monday, October 23, 2017

Tropical storm Irma had minimal effect on Georgia’s employment and that is worrying


Georgia nonfarm employment, Jan-Sep 2017, in thousands, seasonally adjusted


Nobody was surprised when Georgia’s employment numbers for September showed a 500-job loss, after seasonal adjustment. Most blamed it on Irma, which hit Florida as a hurricane and was downgraded to a tropical storm by the time it came through Georgia.

State Labor Commissioner Mark Butler told WUGA that the storm caused Georgia’s job numbers to fall and unemployment claims to rise in September. Butler said a 240 percent jump for the month in the coastal region drove the state’s numbers to some degree.

“It wasn’t because of some kind of economic issue that happened where there was some problem with the economy,” according to Butler. “Most of what we saw with the jobs and initial claims has to do with the storm.”

It is true that the largest disruptions occurred in the Savannah area, which experienced a mandatory evacuation although the storm itself failed to seriously impact the coastal area.

If the job losses were storm-related, then temporary and contract employment should have shown the greatest losses. These jobs lack the security of regular employment and so are the most likely to be impacted when businesses suddenly stop operations even for a few days.

Unfortunately, in September, employment services in the state actually gained 5,300 jobs in September, before seasonal adjustment. That is above the 4,600 jobs gained in September 2016 when there was no storm.

Job losses concentrated in three industries partially offset by gains in two others

Georgia’s job losses in September were concentrated in three key industries: construction, manufacturing, and retail trade.

Construction jobs fell by 3,600 over the month, followed by a 2,900 job decline in retail trade and a 2,800 job drop in manufacturing.

The reason overall losses were not larger can be attributed to gains in education and health services (+4,200) and leisure and hospitality (+2,800).

Again, if the tropical storm had caused significant job losses, leisure and hospitality would have been one of the key industries to suffer.

It is possible some construction jobs were lost due to the inclement weather, but even if they were, that would not explain the loss of manufacturing or retail jobs in September.

On the other hand, manufacturing might represent not a loss of manufacturing activity, but a decreased need to hire more people as automation takes on a larger role in the manufacturing process.

For retail, job losses might reflect the increasing effect of the internet and online purchasing. Retailers are being cautious as they see online sales rise.

Looking ahead to Christmas, there is sure to be seasonal hiring in the months of October and November, but it is possible to see a continued decline in retail jobs after the first of the year.

One month does not make a trend

Monthly numbers are subject to wide variations month-to-month, despite the Bureau of Labor Statistics’s attempts smooth out the changes using seasonal adjustment factors.

It is too soon to say whether the losses in September represent something significant, but it is worth watching future months.

Expect to see some job pick-up in construction from storm-related repairs, and a boost in October before settling down to more usual numbers in November. 

Then we will be able to see if September was a fluke or the beginning of a trend.

Sunday, March 5, 2017

7 Years after the Great Recession, Georgia is regaining its employment levels

New data from the U.S. Bureau of Labor Statistics shows that after seven years, Georgia workforce has climbed out of the recession but still has a long way to go to regain its pre-recession levels.

BLS is reporting that Georgia’s employment-population ratio for 2016 was 59.0% as compared to the nation’s ratio of 59.7%. This is the best report for the state since 2009.

Prior to the last recession, Georgia routinely exceeded the employment-population ratio of the nation, but this all ended in 2009 when the state’s ratio fell to 59.1%.

It has taken Georgia from 2009 to 2016 to regain that level of employment.

Chart 1. Employment-Population Ratio, U.S. and Georgia, 
Annual Average 2000-2016
BLS defines the employment-population ratio simply as “the proportion of the civilian noninstitutional population aged 16 years and over that is employed.” It is widely regarded as the best gauge of workforce employment.

In 2016, Nebraska posted the highest ratio at 69.2%, while West Virginia saw the lowest ratio among states at 50.0%.

For Georgia, the increase from 2015 to 2016 was a statistically significant gain of 1.1 percentage points.

The gain represents an increase of 112,000 in the state’s population, with 154,000 more people employed and 21,000 fewer people listed as officially unemployed.

Georgia’s best year was in 2000 when the ratio stood at 66.8%.

Average State Unemployment Rate Declines

At 5.4%, Georgia’s average unemployment rate remains above the U.S. average of 4.9%. This was still an improvement from 2015’s numbers when the state posted an average rate of 6.0%.

In 2016, New Mexico recorded the highest average unemployment rate at 6.7%, while Hawaii had the lowest average rate at 3.0%.

Private Sector Wages Show Growth

As employment recovers, wages in Georgia are recovering also.

In December 2016, the average nonagricultural wage in the private sector in Georgia stood at $24.72 per hour, an increase of $3.35 over the same time period in 2009.

Wage growth in the state has equaled the pace set nationally. In December 2016, the national private sector average wage stood at $25.89 per hour.

Even accounting for inflation, since December 2009, average hourly wages in Georgia have risen by 15.7% while consumer prices have increased an average of 11.8%.


Thursday, May 19, 2016

Georgia Labor Commissioner Mark Butler responds to labor force problems by threatening unemployed workers

Yesterday, I posted a blog on this site detailing a number of news reports about Georgia’s labor force, most of them negative.

Georgia Labor Commissioner Mark Butler chose to respond by posting a YouTube video threatening workers over the smaller issue of unemployment insurance fraud in a response that could be considered both tone-deaf and irresponsible.



From the University of California Berkeley Center for Labor Research and Education’s report on “Producing Poverty: The Public Cost of Low-Wage Production Jobs in Manufacturing”, to the New York Times’s story on “Hiring Hurdle: Finding Workers Who Can Pass a Drug Test,” the message is that Georgia’s labor force needs the same positive approach that the state puts towards economic development.

The AAUW’s finding on the large pay inequality between men and women in Georgia, or the U.S. Department’s view that tightening the rules on overtime will affect more than 158,000 low wage workers in Georgia, are additional measures that the state’s workforce needs positive reinforcement.

That should not be a hard message for state officials to understand, as they should know that attracting employers to Georgia depends on supplying companies with good quality workers.

Yes, unemployment insurance fraud is a problem in Georgia, as it is elsewhere, and Georgia has done a reasonable job of enforcing the rules, but focusing on this story to the exclusion of the more critical challenges facing Georgia workers is a misplaced priority.

He could just as easily made a video addressing worker misclassification that costs Georgia workers millions of dollars each year in lost wages, but I don’t think we will see that video anytime soon.

There are simply bigger issues facing Georgia’s workers, and it makes Mr. Butler’s choice of topics look like an attempt to distract the citizens of Georgia from the more important issues facing the state’s workers.

Monday, March 21, 2016

Federal statistical agency confirms that Georgia had even a better job growth record than originally reported

After reviewing 2015 jobs data, the U.S. Bureau of Labor Statistics has boosted Georgia by additional 27,600 new jobs in 2015. The total brings the state’s job growth up to 118,700 for the last calendar year.

With the adjustment, Georgia’s nonfarm employment at the end of 2015 stood at 4,330,100 jobs – a new record.

Georgia Nonfarm Employment, Jan. 1990 - Jan. 2016, Seasonally Adjusted
The increase means that Georgia’s job growth rate rose from a preliminary figure of 2.2 percent to a final figure of 2.8 percent placing Georgia with the 3rd highest job growth rate among large states in 2015. In 2014, the state recorded a 3.4 percent growth rate.

Only Florida, which grew by 3.2 percent, and California, which grew by 3.1 percent, showed better percentage gains in new jobs among the nation’s 11 largest states.

While impressive, the state’s job growth in 2015 was its second best in this century, still falling short of its 2014 level when Georgia added 137,600 new jobs. Prior to 2014, the last time the state experienced this level of growth was in 1999 when it added 122,400 jobs over the calendar year.

Georgia ended the calendar year with an unemployment rate of 5.5 percent, its lowest unemployment rate for a calendar year since 2007. Over the year, the state’s labor force grew by 38,037 as 80,479 more people found employment and the number of unemployed dropped by 42,442.

Even as the state’s unemployment rate has dropped from double digits during the most recent recession to single digit numbers, Georgia’s labor force has shown little change, a situation that is showing up in labor numbers across the nation. Economists are unsure of the reason for the slow growth of the labor force although some attribute it to an increasing number of retirees as baby boomers retire.

Atlanta Metro Area

The Atlanta area continues to be the state’s main growth engine adding 70,400 jobs in 2015. The metro area’s rate of job growth did slow in 2015, equaling the state’s job growth rate of 2.8 percent but slower than the growth rates recorded for the metro area in 2014 (4.2 percent) and 2013 (3.2 percent).

As of the end of calendar year 2015, the Atlanta metro area was base for 2,622,600 jobs, more than 60 percent of the state’s total nonfarm employment.

Over the calendar year, the metro area accounted for 59 percent of the state’s new jobs.

Each spring, the U.S. Bureau of Labor Statistics’ nonfarm payroll estimates for states and metropolitan areas are revised as a result of annual benchmark processing to reflect 2015 employment counts primarily from the BLS Quarterly Census of Employment and Wages. These changes are reflected in this release.




Tuesday, December 15, 2015

Is Atlanta running out of workers?

With the Atlanta region seeing continued employment growth, employers may need to leave jobs unfilled if they cannot find sufficient numbers of qualified workers.



Back in 2008-2009 during the recession, it would have been a question that would get you laughed out of a conference: Is the Atlanta region running out of workers?

From the end of 2007 to the beginning of 2010, the Atlanta area shed more than 200,000 jobs. Since then, the area’s employment has grown by more than 390,000. In October alone, the metro area recorded 32,400 new jobs. 

For the 12 months ending in October, the Atlanta metro area’s 3.5% increase placed it as the largest percentage increase among the nation’s 10 top population centers, beating areas like Dallas and Los Angeles and far outdistancing the nation’s 2% employment increase.At the same time, as impressive as the job creation has been, so far 2015 has seen a net increase of 9,100 fewer jobs compared to the same period in 2014.

Are businesses in the Atlanta area creating fewer new jobs simply because they are running out of good candidates to hire? If so, what options are available to increase the pool of available workers?

Labor Force

Back during the depths of the recession, Atlanta’s labor force (which the government defines as the number of workers employed plus those unemployed but actively seeking work) hit a low of about 2.7 million after climbing steadily over the previous 18 years. The drop off could easily be explained by the large number of workers who, faced with unemployment, chose instead early retirement or just became discouraged and dropped out of the labor force.

It was expected that as the economy improved, those workers would rejoin the labor force. Since that low point, labor force for the Atlanta metro area has grown much slower than the number of new jobs. From 2010 to 2012, about 102,000 people were added to the area’s labor force. Since then, only another 27,000 have been added in the past 30 months.



The slow growth in labor force is not confined to Georgia. Looking forward, a recent federal government report anticipates that rate of growth in the nation’s labor force will continue to decline. From 1994 to 2004, the nation’s labor force grew by 12.5%. The government now expects the U.S. labor force to grow by only 5.0% from 2014 to 2024.

Population is not an issue in the Atlanta metro area as the region continues to add people. The Census Bureau estimates that between 2010 and 2014, the Atlanta metro area has added more than 327,000 new residents.

What happened to the rest? Economists speculate that the lack of growth in labor force numbers can be attributed to two simultaneous trends. With an ageing population, it is thought that older workers are retiring, while younger folks choose school over work believing that more education will make them more valuable to employers in the future. It is also possible that some discouraged workers forced out of the labor force from the recession have given up and will never return.

There are some anecdotal information in support of these theories. In addition, the recession saw a spike in the number of workers applying for Social Security disability. Those on permanent disability may represent an additional group of former workers who plan to never return to employment.

Migration within Georgia

While the Atlanta area has been “red hot” in terms of job growth, the same cannot be said for the rest of the state. Smaller metro areas, such as Albany and Brunswick, actually continue to record employment losses. The Albany area employs about the same number of workers as it did in the early 1990's, while Brunswick and Valdosta have reported no net job growth in the past 10 years.

Could these workers be persuaded to move to the Atlanta area? It is possible, although it would be mainly younger workers and the more educated who would be most likely to seek out new opportunities leaving behind an older, less educated workforce in those areas.

While it is certain that these areas would like to attract businesses to relocate to their areas, increasingly, it appears that large metro areas provide benefits not available in smaller communities. These benefits include a large number of potential customers, easy interaction with both suppliers and customers, and improved social and cultural infrastructure (schools, hospitals, museums, music venues, etc.) that are simply not available without a large population.

Even if Atlanta was able to attract more workers from these three smaller metro areas, their combined labor forces are less than 175,000. Moving even 10% of these to Atlanta would boost the Atlanta metro by only 17,000 or so. It would take migration from all parts of Georgia to significantly boost the Atlanta area’s labor force, which already accounts for approximately half of the state’s labor force.

Migration from other states

The Atlanta region has had particular success in encouraging people from other parts of the U.S. to relocate to the Atlanta region. Much of the area’s growth in the 1990's came from people moving from other southeastern states, as well as the Northeast and Midwest, to Georgia.

Some of the causes of this previous migration might be hard to re-create. Previous so-called “rust belt” states are also experiencing recovering economies so that people are not as desperate to move from their home areas. While Georgia has previously exploited its role as a “right-to-work” state, other states, such as Indiana and Michigan have now passed similar laws. West Virginia may be the next state to remove this incentive for companies to relocate to Georgia.

Finally, the return migration of African-Americans back to southern states has occurred and is not likely to be repeated in such a large scale in the future.

Migration from outside the U.S.

Unlike the Northeast, Georgia did not greatly benefit from an influx of European immigrants in the 19th Century. A report from the Pew Research Center indicates that from 2009 to 2014, the number of Mexicans in the United States actually declined by a net of 130,000. The report speculates that “the slow recovery of the U.S. economy after the Great Recession may have made the U.S. less attractive to potential Mexican migrants and may have pushed out some Mexican immigrants as the U.S. job market deteriorated. In addition, stricter enforcement of U.S. immigration laws, particularly at the U.S.-Mexico border (Rosenblum and Meissner, 2014), may have contributed to the reduction of Mexican immigrants coming to the U.S. in recent years.”

As immigrants find better opportunities closer to home, they are less likely to search for jobs in the U.S. Those immigrants who are more likely to come to the U.S., such as Syrians, Iraqis, and others whose own homelands are being disrupted by war, are finding it harder to emigrate as the U.S. strengthens its barriers to entry.

As state leaders speak about in discouraging the resettlement of Syrian refugees in Georgia, the result might not only dampen Middle Eastern refugees’ enthusiasm for relocating to Georgia, it may also give pause to immigrants from other parts of the world who might feel that Georgia is not a welcoming location for any non-U.S. citizens regardless of religion or national origin.

Solutions

Labor Force: Enticing people back into the labor force may take a combination of offering higher wages and providing social support (such as daycare, improved transportation, etc.) to make work both possible and profitable. Other possibilities include allowing more work to be done at home. Education, often offered by policymakers as a solution, might have long-term effects, but cannot quickly solve the current deficits in the labor force.

Migration within Georgia: The Georgia Department of Labor can make information about job availability in the Atlanta area more readily available to residents in other parts of the state. There may need to communicate the advantages of moving to the Atlanta area, even to the point of helping people understand their options for housing, transportation, etc.

Migration from other states: The Georgia Department of Economic Development could begin a campaign similar to their corporate relocation and expansion efforts but one targeted at workers rather than companies. By focusing on certain skillsets that are most in demand, the agency could encourage both new workers and existing workers to consider relocating to Georgia for their career futures.

Migration from outside the U.S.: Georgia needs to make clear that citizens from other nations with legal work visas are welcomed in the state and help encourage conditions that help immigrants make an easier transition to living in Georgia.

Finally, a less desirable solution to the labor force problem is to have the state’s economy slow down so that the state’s businesses will have less need for additional workers. While it is unlikely that the state would cause such a slowdown deliberately, Georgia is very tied to the national economy and another national recession will certainly impact the state’s business community. Remembering that the previous recession ended six years ago, it is certainly possible that another downturn will develop, which will relieve pressure on Georgia’s slow-growth labor force.

Without any of these solutions, Georgia’s employment numbers may fade on their own as businesses fail to find qualified applicants and leave jobs unfilled.