Georgia AFL-CIO works to change or defeat TPP

The Georgia AFL-CIO continues to press for changes to the Trans Pacific Partnership (TPP), or failing that, defeat of the current expected 12-nation trade deal.

On Monday, Oct. 5, the union will be asking the Atlanta City Council to pass a resolution, in support of better trade deals. It appears that if the Council approved this resolution, it would place the Council in conflict with Atlanta Mayor Kasim Reed, who welcomed the negotiators to Atlanta last week and has generally supported the TPP.

The Atlanta Journal-Constitution quoted Mayor Reed as saying that “Businesses that engage in exports have a higher chance of survival and they pay higher wages. “At the end of the day, all of this is about folks having a job that gives them some dignity and allows them to support their families.”

The call for a City Council resolution follows the AFL-CIO’s support of protests last week in Atlanta where trade representatives were meeting to try to conclude trade negotiations on the pact supported by the Obama administration.

Clarkston Mayor Ted Terry, Georgia AFL-CIO’s communications director, told the AJC that he has myriad concerns with the potential deal, namely that it will benefit CEOs and not workers.

“Once TPP passes, it could last indefinitely. And other countries can join it without limit or oversight by the public or Congress,” he said. He fears that TPP “is a global race to the bottom, the bottom in environmental standards, the bottom in labor and wage standards.”

The Obama administration has argued that TPP will help U.S. companies increase exports. In turn, they believe that increased business would result in increased employment for American workers.

It is unclear whether union locals in Georgia support the TPP protestors or whether the Georgia AFL-CIO is acting more on orders from the national AFL-CIO to oppose the trade deal. Last week’s protest in downtown Atlanta did not show a particularly large turnout of union members.

TPP is the nation’s largest trade deal since the North American Free Trade Agreement (NAFTA) in 1993. Much of the present union opposition to TPP stems from what they see as serious job losses due to NAFTA, which they vow to not allow again under TPP.

Nations involved in the current TPP negotiations include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam. While China is not part of the current round of negotiations, some fear that China will be added later to the agreement causing loss of more U.S. jobs.

Meanwhile, the trade negotiators themselves are probably less concerned about protests as they struggle to conclude any deal. A number of stumbling blocks over specific issues, including dairy imports and patent protections for pharmaceuticals, continue to delay finalizing details of the trade deal.

The trade talks, which were originally scheduled to conclude on Thursday, have carried over into the weekend. Given these difficulties, it is unlikely that negotiators will be willing to entertain additional modifications to the current trade package.

Assuming that negotiators are able to agree to a final package before leaving Atlanta, the protestors will then need to turn their attention to having Congress to defeat the final agreement.

This will be difficult as TPP was given fast-track status by Congress, meaning that the agreement can be voted either up or down but with very few changes. Fast-track status means that protestors will need to convince a majority of lawmakers to vote down the deal, since they will be unable to amend the final bill.

Asking the Atlanta City Council to approve this draft resolution is one step towards shifting the focus by putting public pressure on lawmakers to defeat the final draft trade deal.

Georgia unemployment rate drops, job growth is modest in August

Georgia added 2,200 jobs in August, while the state’s unemployment rate dropped to 5.9%.

“This is the first time Georgia’s unemployment rate has dropped below six percent since May 2008,” said State Labor Commissioner Mark Butler. “The rate declined as our employers laid off the fewest workers for any month in more than 15 years and continued to create jobs.”

In a YouTube video, Commissioner Butler alluded to the fact that the decline in the rate was due to people dropping out of the labor force rather than people finding jobs. Layoffs decline while a slowdown continues in the number of new jobs being created by companies and government.

Nonfarm employment rose by 2,200 in August, a modest gain compared to the increase of 14,300 jobs in August 2014.

There was good news in the revision of the preliminary count of jobs in July. The July jobs number was revised upward from the preliminary 4,600 jobs to a revised count of 10,500 jobs.

Over the year, the state has added 83,200 jobs, its slowest 12-month increase since 2013.

In 2014, the state was growing faster than the nation, but that has now changed. Georgia’s job growth at 2.0% is slower than the national rate of 2.1% despite recent drops in the price of gasoline, which is putting more money into the pocket of consumers and Georgia businesses, such as Delta Air Lines and UPS.

Atlanta grows, while Georgia slows

Fast growth in the Atlanta metro area contrasts with slower growth in the rest of the state

Metro Atlanta’s job market remained strong in July as the area added 13,200 new jobs over the month.

For the 12 months ending in July, the area’s employment has increased by 75,800, placing it 4^th in job growth among the nation’s largest population centers after the Los Angeles, New York, and Dallas areas, according to new seasonally adjusted data released by the U.S. Bureau of Labor Statistics. By population, the Atlanta region ranks 9^th.

While the Atlanta region’s growth remained robust, conditions in the rest of Georgia slowed. Outside the Atlanta metro area, the state recorded its 5^th consecutive month of job losses, dropping 8,600 jobs in July.

From March through July, the Atlanta region has seen the addition of 26,700 new jobs, while the rest of the state has recorded a loss of 20,600 jobs.

Due to this divergence, the Atlanta region has grown by 3.0% over the past 12 months, while the state has recorded a 2.1% growth rate.

With the recent slowdown, the state’s annual job growth dropped from 6^th place in June to 8^th place in July among the 50 states. For the 12 months ending in July, the state added 89,400 nonfarm jobs. This contrasts with the 130,700 jobs it added in the 12 months ending in July 2014.

Other Georgia Metro Areas

There continues to be pockets of strength outside of the 29-county Atlanta metro area with Savannah adding 4,000 jobs over the past 12 months for a 2.4% growth rate.

The Dalton area continued its recovery from the recession with a 2.6% annual growth rate, while Brunswick recorded an annual increase of 2.4%. Despite the recent rebound in their economies, employment in both Dalton and Brunswick remain below their pre-2007 levels.

Among metro areas in the state, Valdosta recorded the largest 12-month decline in July, shedding 1,200 jobs for a loss of 2.2% since July 2014.

The Atlanta metro area is defined as including Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Morgan, Newton, Paulding, Pickens, Pike, Rockdale, Spalding, and Walton counties.

GSU Economist sees improved job growth for Georgia and Atlanta area

In his “Forecast of Georgia and Atlanta,” released Aug. 27, Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business believes that the state’s decelerating job growth will reverse in the second half of 2015.

“As global economic health stabilizes, consumers demonstrate a greater propensity to spend and corporate spending resumes, Peach State job growth will accelerate to 2.6 percent for the 2015 calendar year,” Dhawan said.

The corporate sector is faring well in Georgia and Atlanta. Statewide, the sector posted a 7.2 percent gain in the second quarter, “pointing to momentum moving forward,” the forecaster said. Furthermore, the move of several headquarters to Atlanta continues to result in professional and business services hiring.

“Although this sector is enduring weaker global growth, domestic consumption is taking up any shortfalls,” Dhawan said.

The forecaster is predicting that Georgia employment will gain

·       82,900 jobs in calendar year 2015

·       87,500 jobs in 2016

·       94,100 jobs in 2017

This would mean slower growth than in the past two years. As a comparison using seasonally adjusted data, in 2013, the state added 95,500 jobs and in 2014 increased by an additional 146,500 jobs. 

Over the 12 months ending in July, the state has added 89,400 jobs (seasonally adjusted) as rapid growth in the first 6 months was followed by a marked slowdown in the most recent 6-month period.

For the Atlanta metro area, Dr. Dhawan see the addition of

·       62,400 jobs in calendar year 2015

·       63,300 jobs in 2016

·       65,500 jobs in 2017

In 2013, the Atlanta metro area added 77,600 jobs and in 2014 added 97,200 jobs.

Dhawan said millennials, who constituted 23.6 percent of metro Atlanta’s population in the 2010 census, are making their influence felt in several regards.

“To no one’s surprise,” he said, “millennials are fueling demand for multi-family housing. They’re also spurring area companies to relocate to downtown and Midtown in order to draw on their high-tech skills.”

“I expect the area’s information sector to continue to expand in coming years as it benefits from a robust fiber optic infrastructure, relatively low-cost electricity generation and a reliable power grid,” Dhawan said.

Attracting young, technologically savvy talent is one of the reasons that healthcare added almost 3,500 jobs in the first half of 2015. For the full year, this sector will add 8,100 jobs.

Although growth in the metro area’s hospitality and transportation sectors slowed somewhat in the first half of the year, both will benefit from the spillover of domestic demand growth in catalyst sectors (corporate, healthcare, technology and manufacturing) for a combined total of 12,800 jobs in 2015.

U.S. job creation catches up with Georgia in July

12-month job growth falls below 100,000 for first time in 17 months

Georgia saw the creation of 6,400 net new jobs in July 2015, according to preliminary seasonally adjusted data released today by the Georgia Department of Labor.

The new information also included a revision that wiped out all the jobs reported in the prior month. 

In June, the labor department announced that 2,300 jobs were added. With the revision, it is now reporting that the state actually lost 4,100 jobs in June.

Among industries in the state in July, retailing (+2,800), professional and business services (+3,100), and local government (+4,300) were significant contributors to the state’s job growth.

Losses occurred mainly in private educational services (-2,100) and state government (-2,400).

Annual job creation slows

For the 12 months ending in July, the state saw 89,400 jobs created, an increase of 2.1 %.

As a result of slower employment growth, 12-month job growth fell below 100,000 for the first time in 17 months. July marked the first time since the beginning of 2013 that state job growth did not exceed the national average.

In some states, like North Dakota, their jobs slowdown can be partially attributed to falling oil prices that have resulted in layoffs in oil and gas production. Since Georgia has little oil and gas, its employment is unaffected by reductions in oil and gas production, and the state’s economy should be benefiting from lower energy costs. Instead, it is recording a marked slowdown.

Metro Areas are key

The Atlanta metro area created 13,200 jobs in July, and the Savannah area saw another 2,000 jobs added. Other metro areas with positive job growth included Albany (+400), Athens (+100), Brunswick (+100), Columbus (+600), Dalton (+200), and Rome (+100).

Metro areas reporting seasonally adjusted declines in July included Augusta (-500), Gainesville (-1,000), Hinesville (-300), Macon (-1,000), and Valdosta (-700).

While the Atlanta metro area is home to approximately 61 % of jobs in Georgia, it has been responsible for almost 85 % of the state’s job growth over the past 12 months.

Unemployment rate

The state’s unemployment rate stood at 6.0 % in July compared to 7.3 % in July 2014 as the state’s labor force continues to shrink.

While many see a lower unemployment rate as a positive sign for the economy, when drops occur due to people leaving the labor market, it can be a negative indicator.

Lower gas prices are good for Atlanta economy

Most will benefit but the impact is mixed

Low gas prices may lead to no raise in Social Security

Anyone filling up at the pump has noticed the drop in gas prices. The government reports that gasoline prices in the Atlanta area in June dropped 21 % from a year ago, and that report comes before more recent price decreases at local gas stations.

The lower prices are appearing due to an oversupply of oil nationally and despite a higher state gas tax here in Georgia.

That is good news for motorists who can spend less on fuel but determining how lower gas prices impact the larger economy is harder to calculate.

There is certainly a psychological boost to seeing a drop in prices, but there are also some very real measurable advantages.

For instance, motor fuel represents about 6 % of expenditures for the average Atlanta household, so a 21 % drop in costs translates to roughly a little more than a 1 % increase in disposable income.

The current personal savings rate in the U.S. is 4.8 %, so if the typical household saves 20 % of their gasoline savings, they will have about $10 per week more to spend on everything else.

A nice addition to the economy, but not high enough to be inflation-creating.

Seniors may not see lower gas prices as a benefit

Of course, that assumes that you live in a typical household. 

Older citizens are likely to wish for higher gas prices as they impact raises in their Social Security monthly benefits.

Seniors, for example, tend to spend less on gasoline as they retire and stop the daily commute. 

Lower gas prices are taking a toll on inflation, and thus on any chance of an increase in the Social Security monthly benefit in January 2016.

If the adjustment to Social Security were to occur today with a current inflation rate of -0.4 % for the CPI-W index, there would be no change to Social Security benefits next year.

This comes at a time when other costs, such as medical, continue to rise. 

Senior citizens, who are more likely to be impacted by medical costs, have seen a 3.9 % in their health care costs in the Atlanta area since last June.

Without an increase in Social Security benefits, they may have to meet those additional costs out of their own pockets, although without a raise in Social Security benefits, Medicare will not increase its monthly fee for Part B for those having their payments deducted through Social Security.

Younger people may see less benefit to decline in cost of gasoline

Some millennials are choosing to live closer to their jobs, so gas prices, both up and down, have less impact on their daily lives. 

With many of them renting rather than buying homes, they are more affected by rents, which have increased 4.9 % since last year.

Beneficiaries of lower fuel prices

The real beneficiaries are those with long commutes, such as families living in their own homes located in the more distant suburbs where the car is a necessity, and there are few commuting options other than driving.

Other beneficiaries are automobile dealers selling large SUVs and trucks, which are seen as more affordable now that gas prices have declined.

After the recession, it appeared that people were choosing to live closer to Atlanta but expect that trend to reverse as lower gas prices encourage the building of homes in more distant suburbs where land and construction costs are lower.

Georgia a non petroleum industry state

The lack of a petroleum industry has held back the state’s growth in the past, but now is a boost that should see dividends paid in its overall job growth compared to states’ economies more dependent on oil and gas production.

North Dakota, which had been recording annual job increases of 4 % or more, is now losing jobs as oil and gas production slows.

Since Georgia lacks the oil and gas reserves found in other states, the decline in those industries will not affect it, while the state's industries that use petroleum benefit.

Lower fuel prices also have an impact on companies, such as Delta and UPS, where fuel costs make up a sizable portion of their total costs of doing business, not to mention trucking companies and railroads. 

Lower costs should lead to higher profits and stock prices to the benefit of investors.

Even farmers will benefit from the lower fuel prices, although that might be partially offset by lower prices in commodities they produce, such as cotton.

Tax increase offset by lower prices

Even Georgia’s gas tax increase, coming at a time of lower prices overall, is masked by the lower prices at the pump. 

Motorists who fuel up will most likely not notice a small rise in prices after these large declines.

For a tax-adverse state like Georgia, that is good news for incumbent politicians.

Overall, Georgia’s economy benefits from these lower prices, but, as always, it depends on how long prices stay lower, and how important fuel costs are to the budgets of individual households and businesses.

A B.S. in Manufacturing?

Name an industry that has lost almost 5 million jobs since the turn of the century. Now name an industry that is projected to lose another 500,000 jobs by 2022.

That industry is manufacturing, yet Georgia Southern University has begun accepting students to its new B.S. in Manufacturing Engineering.

When classes begin in August, the university will begin the first undergraduate Manufacturing Engineering Degree Program in the state of Georgia and Southeast United States with the first graduates expected in May 2019.

Maybe its best chance for success is that it is counter-intuitive?

Selecting an undergraduate major is a difficult choice. Among the problems with selecting a career field for undergraduates are:

1.   With so much information on the Internet these days, there is a certain herd mentality with most students crowding into the current “hot” fields.

2.    Students, with the encouragement of their parents, choose what is popular even if they are not suited for that career.

3.    Occupational projections are imprecise at best, even if their predictions are treated as facts rather than as informed guesses.

Even the U.S. Bureau of Labor Statistics, which is responsible for the biennial Occupational Outlook Handbook, says: The accuracy of projections for individual occupations is subject to error because of the many unknown factors that may affect the economy over the projection period. Furthermore, while occupational employment projections and related job outlook information can provide valuable inputs to the career decision-making process, they should not be the sole basis for a choice of career.

So what advantages do students face in this field?

Manufacturing, especially in the U.S., is translating into a high-tech field, where automation and high value production are the means to increased profitability. That probably means fewer jobs overall, but more opportunities for individuals with technical skills.

Mass customization of items is the trend, and mass customization means quick turnaround times, which requires manufacturers to be located closer to their customers. Manufacturing a high value, low quantity item is inconsistent with slow delivery from remote locations.

The U.S., like few nations on earth, constitutes a major market. Exports are good, but the U.S. is a large enough market that internal demand drives most of its GDP. Fluctuations in currency affects production but not to the extent that it does in smaller markets. To the extent that automated factories can offset lower labor costs elsewhere in the world, the manufacturing sector can be competitive.

The Southeast needs to be a diverse economy, and strong agriculture, manufacturing, and service industries can combine to provide economic stability and growth.

It is unlikely that manufacturing can again become the job creator that it was in our past, or that we currently see in health care, but there is still a place for advanced manufacturing in the U.S.

The students at Georgia Southern University may just find themselves graduating in time to take advantage of these trends.

Atlanta metro claims 4th place in new jobs

Employers in the Atlanta metro area created 71,800 new jobs for the 12 months ending in June, the fourth best performance of large metro areas nationwide, according to preliminary data provided by the U.S. Bureau of Labor Statistics.

The new jobs represent a 2.9 percent rise in employment over the year, compared to a 2.1 percent increase nationally.

Table. A. Net change in employment, June 2014 – June 2015, seasonally adjusted
Metro Area	12-month net  employment gain	12-month percentage  employment gain
New York	148,000	1.6 %
Los Angeles	140,800	2.5 %
Dallas	111,800	3.4 %
Atlanta	71,800	2.9 %
Miami	71,400	2.9 %

For the month, the Atlanta area lost 3,000 jobs contrasting with the rest of the state that recorded a pick-up of 5,300 jobs for a net gain of 2,300 jobs statewide in June.

For the three months prior to June, the Atlanta area had averaged an increase of 4,900 jobs each month. In June last year, the metro area reported a one-month increase of 8,600 jobs.

Atlanta Metro Area, Nonfarm Jobs, 2014 - June 2015

In June, metro Atlanta’s unemployment rate stood at 6.0 percent, while the state recorded a rate of 6.1 percent, and the nation showed a rate of 5.3 percent. The Atlanta area rate stood at 7.3 percent in June 2014.

Georgia Metro Areas

Georgia’s metro areas showed mixed results in June and over the year. For the month, excluding the Atlanta area, five areas showed gains, while four areas showed declines, and two were unchanged.

Over the 12 months ending in June, Albany and Valdosta were the only two metro areas in the state recording losses in employment.

Seasonally adjusted data were not available for the Warner Robins area.

Table B. Georgia metropolitan statistical areas, net change in total nonfarm employment, seasonally adjusted
Metro Area	1-month net change, June 2015	12-month net change, June 2014 – June 2015
Albany	-600	-700
Athens	400	1,800
Atlanta	-3,000	71,800
Augusta	-1,800	4,100
Brunswick	-400	1,100
Columbus	0	1,700
Dalton	100	2,400
Gainesville	500	3,200
Hinesville	300	800
Macon	600	1,100
Rome	0	500
Savannah	-800	3,400
Valdosta	0	-200
Warner Robins	N/A	N/A

Data are preliminary. Numbers provided by the U.S. Bureau of Labor Statistics and the Georgia Department of Labor.