While the unemployment rate slowly falls nationally, it continues to increase here in Georgia, rising from 9.8 percent in October to 10.2 percent in December. While the country as a whole added more than 1 million jobs last year, Georgia has continued to lose jobs.
There are a lot of possible explanations, including the fact that this recession has hit hard at real estate and other industries on which metro Atlanta and Georgia have depended. But there’s also a deeper problem: In metro Atlanta and in Georgia, we face fundamental economic challenges that predate the recession and have largely been hidden from view.
Despite recent setbacks, most residents of metro Atlanta still think of the region as a growth machine temporarily derailed by the national economy. Through much of the ’90s, that perception was accurate. We were creating jobs, and a lot of them were well-paying jobs. Georgia ranked 10th in the country in per capita income growth that decade, and by 1996, per capita income in Georgia had reached 94.5 percent of per capita income nationally.
That marked a sharp rise from the early ’80s, when Georgia’s per capita income was barely 83 percent of the national average. Unfortunately, after 1996 we began to give back almost all of the income gains we had made over the previous quarter century, according to a study by Sean Turner, a research associate at Georgia State University’s Fiscal Research Center.
By 2008, per capita income in Georgia had fallen to 85.5 percent of the national average, below what it had been in 1984. From 2000 to 2008, we ranked last in the country in per capita income growth. In fact, if income growth had merely matched national averages since 2000, Turner concludes, by 2008 each person in Georgia would have been making an additional $3,300 a year.
Again, all of this was occurring — largely unnoticed — before the recession even hit. And the truth is, as bad as our numbers were in the last decade, they were falsely optimistic.
John Matthews, another researcher at GSU’s Fiscal Research Center, took a look at what kind of jobs Georgia has been gaining and losing. According to his numbers, we added 115,363 jobs in the real estate, rental and leasing sector between 2001 and 2007, an astounding increase of 73.5 percent in just six years. Over that same time frame, we added almost 70,000 jobs in construction.
In other words, as bad as our economic performance was during those years, it was falsely inflated by roughly 180,000 jobs that we now know to have been the product of the real estate bubble.
However, the most startling discovery in Matthews’ work strikes at the heart of another widely held perception. He focused his research on how much income is generated by each job, discovering that from 2000 to 2008, Georgia’s income growth per job ranked 49th in the nation, behind only Michigan, which was losing tens of thousands of well-paying manufacturing jobs.
That’s not the surprising part. According to Matthews, most of that poor performance can be attributed to metro Atlanta, rather than to the rest of Georgia. “Atlanta had very low growth in employment income per job,” he writes, while the rest of Georgia enjoyed employment income that — while low — still grew faster than the national average.
Metro Atlanta, Matthews concludes, has been swapping high-paying jobs for low-paying jobs. Between 2001 and 2007, the metro region lost almost 30,000 jobs in the high-paying information and business management sectors, accounting for 80 percent of Georgia’s losses in those categories. In that same time frame, we gained 60,000 jobs in low-paying administrative and waste services, and another 38,500 in the hotel and food-service industries.
It’s hard to identify the cause of such trends, and even harder to suggest public-policy solutions. For example, Turner eliminates education as a cause, noting that the percentage of Georgians with high school and college degrees has been increasing, which in turn should bring higher-paying jobs. So far, it hasn’t.
At most, you could blame government for failing to competently carry out core duties such as improving transportation and access to water. But even then I suspect the real problems can be found elsewhere.
– Jay Bookman