Economists Says Georgia Adding Jobs, But With Less Economic Impact
Despite an upward benchmark revision to the 2014 job addition number, 101,900 to 145,000, Georgia is adding jobs that don’t produce the consumers’ purchasing power of the past, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business.
“Georgia’s gain of 145,000 jobs in calendar year 2014 is impressive,” Dhawan said. “However, those 145,000 jobs being created aren’t giving the economy nearly as big of a bang for its buck as it did back in the 1990s when slightly fewer jobs, but with greater purchasing power, were created.”
During those glory days of the 1990s, one-third of the jobs were high-paying, resulting in a tax revenue growth of 7.1 percent. Now, one-third of the jobs are in the low-paying category that resulted in a tax growth of only 5.5 percent in 2014.
“These growth rates may be lower than the growth we’ve seen in previous expansion periods,” Dhawan said. “However, they are still good and a welcome sign in this economic recovery.”
These positive signs are seen in one of the premier catalyst sectors. Local corporate firms made announcements that will enhance future purchasing power, including 900 jobs at Kaiser Permanente and Comcast’s addition of 1,000 jobs to fill its nine-story tower to be built near the new Braves stadium. Dhawan expects strong results from the information and technology sector because of a string of recent job announcements from Amazon Web Services, PureCars, Mobinteg, Cisco, Amtrak, Southern Company and Applied Systems.
“This is good news to the future purchasing power potential because these jobs, after all, are high-paying,” Dhawan said.
Not all of the announcements to come from local companies have been positive. Tyson Foods revealed plans to close its Buena Vista plant at the end of May and cut the third shift at their Dawson plant, resulting in 260 job losses. Continuing headwinds from the global economy are dragging the manufacturing sector down, including Tyson Foods, but domestic consumption has carried the transportation sector.
“Job creation in the transportation sector was the strongest since 1998 due to robust domestic spending,” Dhawan said.
Harsh winter weather in the Northeast slowed hiring in the first quarter of 2015, but low fuel prices should allow the industry to hire in the coming quarters.
Construction workloads will remain heavy in the state. Many big projects are already on the docket, such as the Braves and Falcons stadiums and the Savannah port expansion. In addition, new announcements of hotels will combine with the building of new headquarters across the region, which will keep construction jobs robust over the forecast period. The continuation of healthcare employment growth in the coming years will also boost state job totals, after benchmark revisions revealed the “missing” healthcare jobs.
Overall, Dhawan expects stronger gains in catalyst sectors going forward with significant job growth in the sectors of business services, information and healthcare. The Georgia economy will add jobs in 2015 at a growth rate of 2.9 percent, with 27.8 percent coming from the premium category.
Highlights from the Economic Forecasting Center’s Report for Georgia
• Georgia’s job creation slowed to 1.8 percent for the first quarter of 2015. Expect a job growth rate of 2.9 percent in 2015, which moderates to 2.3 percent in 2016 and 2.2 percent in 2017.
• Nominal personal income will increase 4.7 percent in 2015, 5.2 percent in 2016 and 5.8 percent in 2017.
• Strong employment growth continued in Atlanta, growing by 2.9 percent in the first quarter of 2015. Expect a job growth rate of 3.4 percent in 2015, a strong 2.7 percent in 2016 and 2.6 percent in 2017.