By Benita M. Dodd
The welcome mat has been out in Georgia for the past two decades, thanks to an inviting economic environment. Despite ups and downs, the state has continued to welcome jobs, businesses and people.
The population has grown from 7.9 million in 2000 to more than 10.7 million today. The unemployment rate, a record-low 3.4% in December 2000, hit a depressing 10.6% during the economic downturn in February 2010. It recovered and was just 3.3% by November 2019, the lowest level since the government started keeping track in 1976. Georgia’s number of unemployed residents fell to the lowest total in more than 18 years, when there were about 1 million fewer people in its labor force.
While there are areas of the state still struggling to attract businesses, overall, the economic upturn has created an encouraging challenge: finding qualified workers for job vacancies. This is referred to as negative unemployment. Businesses have openings but are unable to find qualified workers for a long time. In fact, the National Federation of Independent Business complained that “finding qualified workers” was its members’ No. 1 business problem in 2019.
So what’s a state to do? First, there is some hope for small businesses. Gov. Brian Kemp has made small businesses his No. 1 priority, and his Georgians First Commission has been working on cutting red tape for businesses and workers.
The Legislature has another income tax rate reduction on its plate for 2020. The 2019 top rate was reduced from 6% to 5.75%. A drop to 5.5% is expected this year; Georgia’s lawmakers and the governor must pass a joint resolution reaffirming 2018 legislation.
This is promising for small business owners because so many file their taxes at the personal income tax rate. More money in their pockets means more money to hire, expand, and add or replace equipment.
The “low-hanging fruit” is being tackled. The state is ending waivers on SNAP (food stamp) work requirements for able-bodied adults ages (16-49) without dependents. So far, 40 counties have reinstated work requirements, one way to restore the dignity of work.
But it appears more Georgians may need motivation. Georgia’s unemployment rate may be at record levels, but not so much the state’s employment-to-population ratio, which is the percentage of the working-age population (age 16-64) employed.
Unlike the unemployment rate, it accounts for Georgians who are no longer job hunting. In 2019, 57.9% of Georgia’s working-age population was employed. That was up from a low of 52% in 2009 (during the economic downturn) but down from 58.5% in 2015. Back in 1991, the employment-to-population ratio was nearly 65%.
Why are fewer working-age people working? One consideration may be the number of people who have sought to qualify for disability entitlements. Finding accurate numbers of the disabled is difficult. According to the Centers for Disease Control and Prevention, 27.2% of Georgians claim some kind of disability; 8.7% of Georgians under age 64 reported a disability
In 2015, another study found, the overall percentage (prevalence rate) of people with a disability of all ages in Georgia was 12%. Just over one in 10 (10.8%) of Georgians with disabilities were of working age, and just three in 10 of those were working.
A 2019 audit by the Office of the Inspector General of the Social Security Administration (SSA) notes, “Congress directed SSA to implement employment support programs to help disabled individuals return to work. To date, these programs have helped only a small percentage of disabled individuals return to work. … When we reviewed the Plan to Achieve Self-Support program in November 2018, SSA could not provide costs incurred, savings, or return-to-work participant outcomes even though SSA implemented the program in 1972.”
Furthermore, the audit notes, “Beneficiaries and recipients are required to report any change in circumstances that may affect their benefits; however, they do not always comply.”
At the state level, more could be done to assess and evaluate disability claims and the progress of Georgians claiming disabilities. More could be done to ensure that unemployed, working-age Georgians are weaned off government assistance they no longer need.
Providing Georgia’s needy with assistance is a task government has embraced. Government also has an obligation to taxpayers and families to ensure that those able to return to independence and the dignity of work are encouraged and motivated to do so.
Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent, nonprofit think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.
© Georgia Public Policy Foundation (January 10, 2020). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.