Georgia’s unemployment rate ranked worst in the country in August, federal officials said Friday, despite the state having added jobs during the past year.
The jobless rate in Georgia, 6.9 percent in April, rose last month for the fourth consecutive time, hitting 8.1 percent.
It is something of a puzzle: The slide into recession-level unemployment comes against the backdrop of falling layoffs, rising tax revenue and the silhouettes of construction cranes against the skyline of Atlanta.
“A rising unemployment rate does fly in the fact of common sense,” said Mark Vitner, a senior economist at Wells Fargo in Charlotte, N.C. “There is no doubt that Georgia’s economy is improving.”
As evidence, he noted the sight of construction crews and the sound of hammers. Backing that up is the feds’ survey of payrolls that shows the state added 88,700 jobs in the past year — 42,600 since April.
But wait: there is another federal survey, the “household” survey used to calculate the unemployment rate. And that one says the number of employed people has dropped by 52,784 since April.
Is one survey utterly wrong? Or can they both be right? Experts start by shaking their heads.
“I don’t know what is going on with Georgia — it’s a big ol’ black box,” said M. Melinda Pitts, the director of the Center for Human Capital Studies at the Federal Reserve Bank of Atlanta. “There are lots of discrepancies between the surveys. You have them going in different directions at the same time.”
Something is surely amiss, agreed economist Gary Burtless at the Brookings Institution. “It appears to me that the two series have gone badly off track,” he said. “This doesn’t make sense.”
When the government has more complete data next year, it will revise the numbers. But which survey will be changed?
Here’s another possibility: They’re both telling the truth.
The payroll survey counts jobs at Georgia companies. The smaller household survey counts people. That means they see the job market differently: Say a person has two jobs and his neighbor has none. The jobs survey sees two jobs: full employment. But the household survey sees a jobless rate at 50 percent.
Is that why the unemployment rate is rising while job growth goes up? Multiple bad-paying, part-time jobs for some hard luck Americans while others find no work at all?
Nice try, says Susan Houseman, a labor economist at the Upjohn Institute for Employment Research in Michigan. “It is logical, but I think that doesn’t sound right. You would have to have a really big increase in multiple job holders.”
And the U.S. Bureau of Labor Statistics says the proportion of multiple job holders has actually declined since the recession.
The good news, bad news stories are just too different for both to be right, she said. “And I think there is something wrong with the unemployment number.”
The Bureau of Labor Statistics often warns against putting too much weight on thin statistics. That is, relatively small amounts of data. So as the smaller survey, the unemployment rate is suspect — especially when it’s just for one state — said Barry Hirsch, a labor economist at Georgia State University’s Andrew Young School of Policy Studies.
“Calculating the unemployment rate is more of an art than a science,” he said.
And maybe the answer is simple: The sluggish economy is indeed creating jobs — just not enough of them.
Georgia tallied 4,134,100 total jobs last month, according to preliminary data released by the Bureau of Labor Statistics. Right before the recession hit, in December 2007, the state counted 4,171,900 jobs.
Georgia was hit harder than most by the downturn when tens of thousands of jobs disappeared. While many of those jobs have returned, Georgia is still 37,800 net jobs shy of its pre-recession level.
Meanwhile, the state has added nearly 450,000 people during that time.
In the three years prior to the recession, Georgia created an average of 92,000 jobs a year. In the three years since the recession ended, the state added an average of 73,000 jobs.
And that job drop-off is reflected in the unemployment rate. As the recession began, the rate stood at a reasonably healthy 5.1 percent. Georgia was tied with Arkansas with the 19th-highest unemployment rate, according to the Bureau of Labor Statistics.
Today, the state is No. 1.
Georgia’s overall job picture continues to morph, a transition that affects the unemployment rate. Before the recession, the construction and manufacturing industries accounted for one of every seven Georgia jobs. But then the housing industry tanked and tens of thousands of carpenters, drywallers and roofers lost jobs. Factories closed as consumers kept wallets and pocketbooks shut.
More than 425,000 Georgians worked in factories as the recession began. Today, only 370,000 blue-collar Joes and Janes work in manufacturing.
The drop-off in construction employment is even more startling: from 217,000 workers in late 2007 to 153,000 today.
Georgia has notched some notable employment gains in the past decade, including automaker Kia and its dozen major suppliers. Global trade has boosted traffic in and out of the ports of Savannah and Brunswick and created thousands of logistics jobs. The burgeoning film industry accounts for an estimated 24,000 jobs.
But these new industries are dependent on the economic whims of market forces outside Georgia and can’t be relied upon to fuel growth and jobs for decades to come.
“We’re waiting for the rest of the U.S. economy to find us and spill over their economic growth into our state,” said Michael Wald, a former Bureau of Labor Statistics economist in Atlanta. “It’s not good that we don’t have control over our own destiny. We need the next big thing — like Coca-Cola or Delta — or industry that will grow well here.”
Part-time jobs account for 16 percent of Georgia’s total employment, according to the Bureau of Labor Statistics, up from 14 percent before the recession. The trend is expected to continue as corporations — warehouses, manufacturers, even engineering firms — increasingly hire part-timers.
“We will have more contract labor, temporarily hired workers for a specific event rather than full-time employment,” said John Helton, the president of Cobb County’s workforce development agency.
As for the contradiction and the debate over the economy’s health right now, the Young School’s Hirsch thinks we simply need more data.
“I don’t think we are going to know for a while what is going on and I know everybody’s impatient,” he said. “But I don’t know and I don’t think anyone knows.”