Gov. Nathan Deal's sunny economic pitch hit a new crescendo this week with an optimistic re-election ad that declared "people now have hope." Democrat Jason Carter, meanwhile, warned that the middle class is being left in the lurch.
On one hand, Georgia's 7.8 percent jobless rate in July is the nation's second-highest. On the other, Georgia State's economic forecasting director Rajeev Dhawan says that "the Peach State job engine is indeed humming."
So which is it? Are Georgians facing “a terrible job market,” as one Carter press release charged? Or do economic factors such as job creation and low debt suggest that, as the Deal camp claims, “the governor’s policies are working?”
The answer is mired in the details, but our AJC colleague Nicholas Fouriezos offers a three-point explanation of this seemingly simple question: Is Georgia's economy on the rebound?
- Different methodology, different prognosis
Georgia's unemployment rate is determined by the U.S. Bureau of Labor Statistics, through what is called the "household survey," including a total sample size of 60,000 households.
Meanwhile, Dhawan's positive economic forecast is based on a quarterly analysis studying employment and income factors for both Atlanta and the state. Those figures take into account reports from hundreds of thousands of businesses, government entities and non-profit employers across the nation, through what is called the "establishment" survey.
A larger sample size is typically more trustworthy. Moreover, unemployment rate isn’t always a trusted economic predictor because the rate only takes into account those who are actively looking for a job. It can rise suddenly if more unemployed workers decide to resume the job search – despite the fact that increasing confidence in the market would be considered a positive by most experts.
"It is one way, but it is not the way," Dhawan said of the jobless rate. "That's the whole point."
The establishment survey has a larger sample size and relies on employers, who seem like a more credible source for employment trends. However, business owners might express a desire to grow employment, only to lag when the time actually comes, especially when the market – like the present one – allows them to be picky.
- Playing catch up
Even as Georgia continues to add jobs at an above-average rate, the regular Joe might feel like the economy is stuck in sinking sand.
That's because 8.7 million jobs were lost nationally during the recession. Georgia lost 332,900 jobs from the recession's start in December 2007 to its rock bottom in February 2010, according to the left-leaning Georgia Budget and Policy Institute.
The job deficit – which includes net change in jobs and population growth - was at 372,300 as of March, in part because the state hasn't been able to add enough new jobs to keep up with the increasing population.
Include the number of under-employed PhDs and college graduates, those who simply gave up looking for a job and those who were unemployed in the pre-2008 era, and you have a substantial hole for Georgians to climb out of.
As AJC columnist Kyle Wingfield notes, a number of economic factors are in Georgia's favor. Personal income has seen a 1 percent increase, state revenues were up 4 percent in July and Georgia was one of only nine states to see its inflation-adjusted GDP growth rate increase in 2012 and 2013.
Deal can – and often does – tout his office's estimate of about 300,000 private-sector jobs added since he took over in 2010. He can also boast that the labor force participation rate has stayed relatively steady since April, which seems to show increased confidence from job searchers.
Carter's camp shoots back with the fact that the state's labor force – which includes both the number of people with jobs and those who are actively searching for jobs – actually decreased in July for the first time this year, by about 4,800 workers. They also note that Georgia has added a net of only 9,148 workers – a number that only includes people with jobs – since January.
Whatever positives Georgia’s economy sees, it will pale in comparison to the heavy losses the state took during the recession. For that reason, the unemployment rate could continue to lag even as some economists wax poetic about the improving job market.
Dhawan said the best way to resolve an apparent conflict between unemployment rate and other economic factors is to look at income creation and tax collection.
"If those are growing, the economy is growing," Dhawan said.
- Political fact-picking
The candidates can pick and choose facts to support their cases.
Carter can score political points by claiming the high jobless rate is a sign of greater economic trouble. Deal can press the case that Georgia job growth has remained positive even while many states have seen a decline. At least until the next jobs report comes out, which could shake up the argument all over again.
For now, though, the numbers show Georgia's economy is improving - if slowly - even as citizens struggle with under-employment and stagnant wage growth in a post-recession financial landscape.
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