All Georgians Deserve to Participate in The Economic Recovery

by Buzz Brockway | Jun 23, 2020

All Georgians Deserve to Participate in The Economic Recovery

By Buzz Brockway

The Coronavirus pandemic has caused massive numbers of people to lose their jobs. Georgia’s official unemployment rate is 9.7%. However, as we reported last week , many others are not employed but do not appear in the common reported unemployment number.

A top goal of policy makers, and indeed all Georgians, should be to see people return to work as quickly as possible. Work is the best path to financial independence and a flourishing life.

As we endeavor to rebuild our economy, we must look to remove barriers people face in returning to work. One significant barrier many people face is a criminal record. For those with a criminal record who lost jobs due to the pandemic shutdown, finding work again could be difficult. For ex-offenders who didn’t have a job, the task of finding one just became even more difficult. Our research estimates that approximately 250,000 healthy working age men had no job prior to the pandemic. The reasons for their lack of employment vary, but for many, a criminal record is the barrier keeping them out of the job market.

What can be done to address this significant problem? In recent years, Georgia has focused on prison reentry programs meant to assist folks as they transition back into society. This work is important and must continue. But for those already back in society, other assistance is needed.

With Senate Bill 288, the Georgia Legislature has the chance to aid ex-offenders looking for work. The bill would allow an ex-offender, who has served his or her time and stayed out of trouble for a period of time, the opportunity to have certain non-violent misdemeanors expunged from the record. This will allow for an easier transition back into the workforce for a segment of Georgia’s population, who have paid their debt to society and stayed on the straight and narrow.

The benefit to our state in passing this legislation comes in several ways: Ex-offenders with jobs are less likely to recidivate. People who don’t get in trouble again cost the taxpayers less money and actually join the ranks of taxpaying citizens.

Ex-offenders with jobs are able to support their families, reducing poverty and lifting up the communities in which they live. If we want to break the cycle of poverty in our state, we must provide a path out for families. A job is the first step on the path to self-sufficiency and a flourishing life.

We are in the final week of the 2020 Georgia legislative session. There are many important issues being debated and policies being discussed to make our state better. At the top of the list should be providing a path forward for folks who need our help. SB 288 is an excellent step in the right direction.

To learn more about what Georgia Center for Opportunity is doing to help get Georgians back to work check out our Hiring Well, Doing Good initiative.

What’s Georgia’s Real Unemployment Number?

by Kimberly Sawatka | Jun 19, 2020

What’s Georgia’s Real Unemployment Number?

By Erik Randolph

Don’t be fooled by Georgia’s unemployment rate. While many are breathing a sigh of relief that barely one in ten Georgian’s are out of work, the reality is much worse.

Georgia’s unemployment rate (U-3) dropped to 9.7% last month—according to official numbers from the U.S. Bureau of Labor Statistics released today.

This number is adjusted for seasonal fluctuations, if that still makes sense given the current conditions. Otherwise, Georgia’s rate would be 9.5%, relatively close due to the time of the year. The Bureau of Labor Statistics regularly makes adjustments to smooth out the data from the impact of seasonal employment, such as temporary employment during the Christmas season, teenagers working as summer camp counselors, or landscaping jobs dependent on the growing season. The smoothing out of data is intended to help economists detect trends more easily.

The sense of relief comes from more dismal expectations that the unemployment rate itself could have been much worse—especially considering the unprecedented havoc on the economy from COVID-19—and from the encouraging news that Georgia is among the 38 states where the rates are coming down.

Georgia’s unemployment rate is among the lowest of the states. The nation’s rate was 13.3% (adjusted). Three states—Nevada, Michigan, and Hawaii—had seasonally adjusted rates of 25.3%, 22.6%, and 21.2%, respectively.

However, one in ten workers unemployed is still very high. There were 475,338 unemployed Georgians last month (seasonally adjusted). That number was 161,147 in February. The state went from a historic low unemployment rate of 3.1% (adjusted) to a record high of 12.6% (adjusted) in just two months.

The Loose Link

The situation is actually worse than what the unemployment numbers show. First, there is a loose relationship between employment and the labor force. The Bureau counts only those who are employed or actively looking for work as part of the labor force.

When the economy does well and jobs are more plentiful, the labor force grows in size because more people decide to enter or reenter the labor force. However, when the economy grows sluggish and jobs become harder to find, the opposite happens: the labor force shrinks.

The labor force participation rate demonstrates this well-known phenomenon. The chart below illustrates this relationship in Georgia. By definition, the labor force participation rate shows the percentage of workers in the labor force to the potential population of those who could be in the labor force, defined as all individuals age 16 and older who are not institutionalized, such as in prison, and—as the Bureau of Labor Statistics defines it—not in the military.

Of course, there are other factors at work. The aging population is pushing down the participation rate. An issue of great concern is the increasing proportion of individuals in their prime working age who have dropped out of the labor force altogether. This has been a topic of study from across the political spectrum, and recessions seem to only aggravate the trend.

The size of the recent labor force loss is astounding. A record number of 262,577 Georgians dropped out of the labor force in April. This is the seasonally adjusted number. The unadjusted number is 286,733.

The labor force bounced back just 0.1% in May, but still the net effect is that 256,208 individuals dropped out since February.

What this all means is that 570,399 Georgians either lost employment or dropped out of the labor force since February. If you add back in the 161,147 who were unemployed in February, there are at least 731,546 workers either unemployed or who dropped out, and 751,116 workers if we use unadjusted numbers.

However, we are still missing one part of the analysis. Prior to February, the labor force was growing and grew at a rate of 1.6% from the prior year (unadjusted). This implies that the labor force number should have grown over the last three months, perhaps to 5,208,019 in May (adjusted). This would make the combined unemployment/labor force problem closer to 15.0% (adjusted), or 14.8% (unadjusted).

It Gets Even Worse

The official unemployment rate does not capture everyone, including those who are working part-time but want to work full-time. For this, we must turn to the alternative measurement of labor underutilization known as U-6, the U.S. Bureau of Labor Statistics’ broadest metric. The national number jumped from 7.4% in February to 22.4% in April, and back down to 20.7% in May.

Unfortunately, the Bureau does not publish U-6 on a monthly basis for the states. For statistical reliability reasons, they only provide annual rolling averages each quarter year.

Most recently, Georgia’s annual rolling average U-6, ending the first quarter of 2020, was 6.7% compared to the national rolling average of 7.2%. This implies that Georgia’s U-6 is probably around 19.3%. Combining this number with those who dropped out of the labor force yields an impact well above 20%, probably around 25%, or one-in-four Georgians adversely affected, instead of just one in ten.

Note on Sources: All data came from the U.S. Bureau of Labor Statistics, except for the identification of the recessions that came from the Business Cycle Dating Committee of the National Bureau of Economic Research.

Erik Randolph is Director of Research at the Georgia Center for Opportunity. This article reflects his calculations, analysis and opinion and does not necessarily reflect that of the Georgia Center for Opportunity.

To learn more about what Georgia Center for Opportunity is doing to help get Georgians back to work check out our Hiring Well, Doing Good initiative.

How Local Businesses are Helping Workers and Feeding the Hungry During the Pandemic

by David Bass | Jun 17, 2020

Restaurant workers and the impoverished are two categories of people particularly hard hit by the coronavirus pandemic and its economic devastation. An estimated 8 million restaurant workers have been out of work nationally, while 39 percent of households earning $40,000 or less per year have lost work. Specific data for Georgia are now available yet, but we imagine they will be similar.

Creating jobs while feeding the hungry

But in the Atlanta area, local business and community leaders are coming together to help both populations in an inventive way. We’d like to introduce you to the Compassion Kitchen Project. Put together by the Cathedral of Christ the King in Atlanta and the Knights of Columbus, the initiative provides much-needed work for displaced restaurant workers while stemming the tide of rising food insecurity in the metro area.

Here is how it works: Donations to the project are passed along to local restaurants, who then in turn make meals for local nonprofits and homeless shelters to feed the hungry. Some of the allied nonprofits include CHRIS180, Nicholas House, Catholic Charities Atlanta, and Together We Rise.

The Compassion Kitchen Project also delivers food bags—called “compassion to-go” bags filled with items like protein cars, chips, canned meats, and bottled water—for people living in transient housing or out of their cars.

‘A good mixed with a good’

Gene Rice, a local commercial real estate developer, has been a key part of the project. He shared with us that many of his business clients are restaurants and brew pubs. The idea with the Compassion Kitchen Project was to get a double bang for the buck—help restaurant workers on furlough while feeding the hungry.

“It’s a good mixed with a good,” Gene shares. “It’s helping a business getting kicked in the teeth right now, getting hourly workers back in the kitchen, and helping folks who are hungry.”

Within a week of getting up and running, the initiative had already served 1,200 meals and raised $30,000. To date, a total of 17,232 have been served.

Civil society in action

This is an example of why civil society is key as we recover from the COVID-19 pandemic and its economic devastation. When businesses, nonprofits, churches, and other community institutions partner together for good, we see amazing results. Learn more about our Hiring Well, Doing Good initiative here.

A statement on current events affecting our communities

by Corey Burres | Jun 3, 2020

A statement on current events affecting our communities

Our hearts are broken by the events of the last few days. We struggle to make little sense of the tragic and unnecessary deaths of George Floyd, Breonna Taylor, Ahmaud Arbery, and the many other stories told and untold.

In tragedy, we are reminded of the value of all humans. That each person deserves the opportunity to flourish. An opportunity that entire generations and communities are prevented from accessing.

We now must face the challenge of who we will be in light of the struggles of those around us. How will we respond to these systemic barriers? How will we address the injustices around us?

As an organization, we stand with the many communities who face these injustices. We are committed to listen, to learn, and most importantly, to act.

Policy Update: What will schools look like in the fall? | VIDEO

by Corey Burres | Jun 3, 2020

Policy Update: What will schools look like in the fall? | VIDEO

GCO’s Vice President of Public Policy, Buzz Brockway is joined by GCO’s Jamie Lord to discuss the Georgia Governor’s suggestions for returning to school in the Fall. While these are merely suggestions, and schools will be able to choose their plans by district, these new guidelines paint a picture of what school in Georgia could look like in light of Coronavirus.

Reopening Isn’t About Haircuts, It’s About Relieving Human Suffering

by Randy Hicks | May 28, 2020

Reopening Isn’t About Haircuts, It’s About Relieving Human Suffering

Georgia recently began the long process of reopening its economy in the wake of what it is hoped will be the worst of the COVID-19 pandemic.

Beginning in late April, certain categories of businesses were allowed to open in Georgia, including restaurants and barber shops. The encouraging news is that infection rates have not spiked and, instead, are flattening and even declining.

Many are concerned that we’re moving too early, too fast — and that safety will take a back seat. That worry is understandable. The toll of the virus in suffering and loss of life is indescribable, as thousands of families are affected in ways they will never forget.

On the other side, many are clamoring for even quicker action to get people back to work.

In truth, both sides have it right. Our first priority should be health. Clearly, that trumps all. But a key aspect of health is not just avoiding a virus, but the full spectrum of human well-being and flourishing. And to achieve that, we can’t afford to remain on lockdown much longer.

We clearly know the economic devastation wrought by the virus: About half of low-income households have reported job or wage loss due to the coronavirus. These job losses could be felt for years as families struggle to get back on their feet — or are never able to at all, plunging them into poverty.

The toll is real. I’m thinking of young moms like Jessica (not her real name to protect her identity), who had been living in her car with her small child as a result of work cutbacks and being evicted. Stories like this one are countless.

But what about the toll on mental health and general well-being? The picture is beginning to emerge, and it’s not pretty. In fact, we are facing a public mental health crisis.

A recent Kaiser Family Foundation survey found that more than half of U.S. adults (56 percent) report that worry related to the coronavirus outbreak has caused them stress-induced symptoms like insomnia, poor appetite or overeating, or frequent headaches or stomach aches.

That’s only the beginning. We have also seen the effects of social isolation in a 1,000 percent increase in calls to distress hotlines in April alone.

Rates of substance abuse and suicide will doubtless skyrocket. One analysis predicts that if the United States reaches Depression-era level unemployment rates, we could see 18,000 additional suicides and additional overdose deaths of 22,000.

The Well Being Trust recently released a report estimating the pandemic could lead to 75,000 additional “deaths of despair” from drug and alcohol abuse and suicide.

During this lockdown, people are missing the ingredients that make for a flourishing life: community, relationships, purpose and belonging. And the truth is that, for many Americans, a major way they experience these benefits is through a job. It’s where we find community, socialize and discover a sense of meaning.

A job is about so much more than just a paycheck.

We know that human beings function best when they are involved with meaningful work. Until this point, the dialogue on reopening has largely focused on “essential” vs. “non-essential” jobs.

But every job is essential for the person who holds it. And not just from a financial standpoint: It’s one key gateway to what makes life meaningful for many of us.

Protecting public health and getting people back into their jobs and communities are not mutually exclusive priorities. We can, and must, do both. We can be sensitive to loss of life and human suffering during this pandemic.

But we also must acknowledge the pain of those whose means of surviving economically has been shattered.