Mike Klein Online

Monday Live Blog: Georgia Jobs Conference

Final Version: 4:00 pm

The Georgia Department of Human Resources will utilize federal government stimulus funds to help Georgia employers fully fund new teen-aged hires during the June and July summer recess.  The announcement was made Monday by Human Resources commissioner B.J. Walker during the Georgia Department of Labor’s Georgia Jobs Summit at the Georgia Tech Hotel and Conference Center.

Labor commissioner Michael Thurmond announced his department will create Georgia Jump Start, a new focus on how to re-deploy existing resources without requiring legislative action.  The plan will be shared with Governor Sonny Perdue, Lt. Governor Casey Cagle, and the General Assembly.  Perdue and Cagle did not attend the conference. GDOL executives also pledged more help to small business.  Panelists repeatedly said strengthening Georgia education remains the key to economic success.

The daylong Shaping Georgia’s Economic Destiny conference began with remarks from Thurmond, followed by Georgia State University economist Rajeev Dhawan.   Entries below are primarily chronological.

Last week the state Department of Labor said more than 100,000 Georgians filed initial unemployment claims in December.  This was more than expected and just the sixth time in state history that 100,000 or more persons filed new claims within a single month; the December 2008 number was 122,000 new filings.  The number of Georgians who filed for unemployment since December 2007 exceeds 1.1 million.

Discussion Monday focused on identification of Georgia’s unemployed and underemployed populations; identification of existing federal, state, local and non-profit resources; discussion of existing demographics of Georgia’s unemployed and underemployed affect public policy; identification of existing training and education opportunities; and, how, federal income support programs can be redeployed to help retrain workers.

8:00 a.m. Update

Monday’s format included two round table discussions focused on how shifting population demographics impact the delivery of income support, employment and education resources.

Panelists included Gene Caso, U.S. Department of Labor; Nancy Johnson, Atlanta Urban League; Butch Jones, Georgia Workforce Leadership Association; John Eaves, Atlanta Fulton County Commission; Ron Jackson, Technical College System of Georgia; Kelly McCutchen, Georgia Public Policy Foundation; Anthony Tricoli, Georgia Perimeter College; B.J. Walker, Georgia Department of Human Resources, and; Carliss Williams, U.S. Department of Health and Human Services.

Georgia By The Numbers:

587,000:  Unemployed, Underemployed or Discouraged Workers.

4.6%:  Georgia Unemployment Rate in 2007.

10.0%:  Georgia Unemployment Rate in January 2010.

26,700:  Discouraged workers who have not looked for work in the past four weeks.

97,800:  Georgians working part-time who would prefer full-time employment

91,600:  Georgians who found work after looking between 15 and 26 weeks.

86,800:  Georgians who found work after looking between 27 and 51 weeks.

10,589:  Georgians who found work through the DOL Georgia Works program.

Males are 55.9% of unemployed Georgians and white males are 31.6%.

Females are 44.1% of unemployed Georgians.  Black females are 22.2% and white females are 20%.

9:00 a.m Update

The conference has begun.  Approximately 200 persons are gathered in the Georgia Tech Hotel and Conference Center main ballroom.  They include public policy thought leaders and everyday Georgia citizens who are not policy officials.

Michael Thurmond told the audience, “This Great Recession is a man made disaster of historic proportions.  There are those who will suggest there is little we can do at the state and local level … It is the responsibility of everyone in this room to use every resource available” to limit the further impact of the recession on Georgians.

Thurmond said money is not the issue.  “Even though state budgets are being cut, there is a historic amount of federal dollars being appropriated to us.  The one excuse we cannot use is we did not have enough resources.”

Thurmond challenged Georgians to be flexible and to adapt to the changing economy.  He established this goal for the conference:  “One unemployed person finding a job is the bar.  One person.  If we can help one Georgian unemployed, back to work because of this conference, then we will have succeeded.”

9:30a.m. Update

Rajeev Dhawan is speaking.  “My job is to tell you where the economy is going, as best as I can see.”  Dhawan is director of the Economic Forecasting Center at Georgia State University.  Like DOL commissioner Thurmond before him, Dhawan challenged the audience to be flexible.  “If you are not flexible, you will have a tough time.”

Dhawan said there will not be a turn-around in construction, one of the leading causes of the Recession, “for the next couple years.”  He cautioned that economic recovery optimists are too optimistic, and pessimists are too pessimistic.

Dhawan directly linked eventual economy recovery to “the willingness to invest as a small business or corporate leader” and the willingness of the financial community to finance that investment.  Dhawan said investment, especially in technology, will create the environment that will create jobs, which will enable consumers to resume spending.

Dhawan also focused on consumer assets, in particular, consumers who saw their assets reduced by the recession because they “are not in a mood to spend because the best way to reduce debt is to stop spending.”  Dhawan said the federal government’s “cash for clunkers” automobile incentives program was “nothing but a give away” because you still have to finance it.  And, he said, the only people who could purchase cars were those who also could find financing.

Dhawan explained the impact of reduced consumer spending.  Yahoo has decided to jettison divisions that were not making money.  Union Pacific has idled railroad cars.  Restaurant chains have closed poorly producing stores.  Energy companies are tentative, especially because they cannot forecast the cap-and-trade legislation eventual impact.

Dhawan said there is some evidence of “anemic” job growth, especially in the temporary employment sector, but that growth remains anemic because of limited financial investment and consumer caution.   All this affects available jobs.

Dhawan said Georgia has lost the fourth highest percentage of jobs in the United States, 7.5% of all jobs that existed when the recession began in December 2007.   Atlanta has the second highest decline in new housing start percentages trailing only Miami.  Dhawan dexcribed “Atlanta’s Irrational Building Exuberance” which has left the market glutted with glistening but often nearly empty office structures.

Dhawan said Georgia could expect positive jobs growth in the 2011 calendar year, “but it will not be enough to make a dent in the unemployment” percentage, currently 10% for all Georgians.  These out-of-work Georgians and their reduced spending power will cause, Dhawan predicted, a reset in state government because of reduced tax revenue.

Among several summary points, Dhawan predicted anemic GDP growth, continued problems for small businesses seeking bank financing, and new construction will see its lowest levels during the next fourteen months.  He also said China has recently been unwilling to purchase all debt coming from within the U.S. economy.

10:30 am Update

The conference has begun to discuss the demographics of Georgia’s discouraged, unemployed and underemployed workers.  Thurmond estimates that Georgia’s real unemployment rate is closer to 15% … not the official 10% federal government rate … when all discouraged, unemployed and underemployed workers are grouped together.

Current trends indicate men outnumber women and white men outnumber all other categories.  Men are especially hard hit by declines in construction and manufacturing.   African-American women have been less affected because their employment is more often in education and health care.

“These are difficult times but these are not hopeless times,” Thurmond said.  “Even in a recession hundreds of thousands are losing jobs but hundreds of thousands are gaining jobs.  That is what we really want to focus on.  They are winners even in an economic downturn.”

During the twelve months that ended in September 2009 Georgia ranked fourth nationally with 14 average weeks of benefits being paid before re-employment.  South Dakota (12.7 weeks), North Dakota 12.8) and Nebraska were the only states that returned workers to jobs sooner.  But their number of processed unemployment insurance initial claims was dramatically lower … just 191,000 total claims for those three states compared to 1.05 million in Georgia.

Nancy Johnson of the Atlanta Urban League followed Thurmond.   Johnson said there must be more emphasis on recruiting males into new job training.  “In our community the African-American male crisis is just that.  Seventy percent of our households are led by women.  Jails are populated disporportionately by African-American men.  While focus on the drop out rate is more current, this has been an issue for a decade,” Johnson said.

Johnson said the Urban League emphasis is education.  “Every client who walks in our door, we say to them, we want you to upgrade your skills and and we want to get you back to work as quickly as possible so you can meet your fundamental needs.”   Johnson said the majority of their clientele is unskilled or underskilled.

“Parents with two or more children who earn minimum wage means poverty,” Johnson said.  “If all we do is help people slightly increase their income, that is not good enough.  Along with that, what we are telling people is not only do we want to help you find work , we want to help you embark on a pathway to empowerment.”   She said the principle goal of the Urban’s League’s Unlimited Possibilities program is to challenge its clientele “to re-engage.”

B.J. Walker, Georgia Department of Human Resources commissioner, said the state has seen a 40% increase in the number of food stamp-eligible clients.   Much of that growth has been middle class families that did not previously need those services.  Because of that demand, DHR has moved food stamp services to the internet. “So if you ask me what our agency is thinking about … we are there to fill holes. and fill gaps for people as they experience downturns in their own economic services.”

Walker described how the state Department of Human Resources is using federal government stimulus funds.  One program is adult-subsidized employment.  The other addresses teen employment.

New adult employment can be temporarily subsidized with federal stimulus funds up to 80 cents on the dollar.  “The employer gets extra help at a time when they cannot afford help and they only pay 20% of the cost.”   Walker said the job seeker gets experience, access to a possible job and hope.  Walker said Human Resources is speaking with several large employers about participation.   Prompted by an audience question, Walker said DHR has not considered whether there would be a cap on the number of subsidized employees per employer.

Walker said federal stimulus funds would also be used this summer to fund Teen Work,  a program to provide 100% subsidized funding for summer hire teen-aged employees.  “If you are willing to hire a teenager this summer,” Walker said, “I will pay 100% of the salary for June and July. We’re talking six weeks of on the job experience.  This is money flowing.  If you are an employer send us an e-mail.   If you are a teen or know a teen, send us an e-mail.”

Carliss Williams, regional administrator for the U.S. Department of Health and Human Services, said Georgians have not fully explored how to receive earned income tax credits.   Estimates indicate the economic impact could be as much as $2 billion.  Thurmond emphasized that this is essentially found money that is not being fully deployed.   There is a link below to the Internal Revenue Service website pages that explain the earned income tax credit.

1:00 pm Afternoon Panel

Kelly McCutchen, president of the Georgia Public Policy Foundation, told the audience after lunch that Georgia must market its strengths and recognize its weaknesses.  “We’ve got to do a better job,” McCutchen said marketing the HOPE grant that funds pre-k programs and advanced studies, promoting the earned income tax credit, talking about the DOL Georgia Works program and promoting subsidized work programs.

McCutchen also said, “Small businesses are where jobs are going to come from.  We know that.”  But, McCutchen said, small businesses cannot grow and survive without funding.  “They need capital.  They have to find it somewhere.  So they move because Georgia lags in the venture capital environment.  “That needs to be higher on our radar screen.”

Anthony Tricoli of Georgia Perimeter College, Gene Caso from the U.S. Department of Labor, John Eaves from the Fulton County , Ron Jackson of the Technical College System of Georgia and Butch Jones of the Georgia Workforce Leadership Association are on the early afternoon panel.

Eaves said 20% of Fulton County residents are below the poverty line and approximately one-third of Fulton County residents receive food stamps.   He said last year 30,000 people went through Fulton County Jail.  Eaves said on any given day about 13,000 people are in metropolitan Atlanta area jails.   The number incarcerated in metro Atlanta exceeds the number incarcerated in New York City.   Eaves said, “The core problem is a lack of jobs.”

Ron Jackson, Technical College System of Georgia, said education “must be ready to move on a dime to prepare for the workforce today and tomorrow, and that workforce is changing exponentially.   It requires a different type of worker, a skilled and educated worker.  It demands that our worker performs at a very high level.   We have to come up with some solutions to deal with education. We can no longer deal with a 30% to 35% dropout rate in K-12.”

Jackson said more than 1.3 million current Georgians over age 18 do not have a high school degree.  By comparison, only 95,000 adult Georgians are enrolled in continuing education courses.   The education gap: 1.2 million Georgians.  “The old jobs, the mill jobs, are not coming back,” Jackson said.  “If we don’t have the educated workforce we won’t get the KIAs; we won’t get the NCRs.”

Butch Jones, chairman, Georgia Workforce Leadership Assocation, said, “We do need to come up with new ideas.”  Jones praised the U.S. government response to the Haiti earthquake, and he asked that just as much emphasis be placed on putting Georgians back to work.  Jones said the Workforce Investment Act, administered by the federal government, is coming up for re-authorization in Washington.  He urged that it be re-authorized without major changes.

Thurmond asked the panel to identify one thing they would change to help put Georgians back to work.  Jones said he fears an oncoming heavy tax burden “greater than ever before” on businesses.  “We’re going to have to get the message across that the way to create jobs in this state and across the country is not to raise taxes.  That worked for John Kennedy and it worked for every administration that has tried it since.  We don’t have a lot of time.”

Tricoli said “education is the key” and “education is directly linked to economic development.”  Tricoli told the story of a California bio tech company that decided it would not relocate to Georgia because it did not think there was enough available education and workforce to staff its lower level bio tech positions.  He urged other leaders on the panel to better understand what these companies need when they consider moving to Georgia.

Eaves cited a direct link between lack of education and entrance into the adult criminal justice system.  Eaves said Georgia has the second highest incarceration percentage rate in the country, behind only Texas, and that 82% of incarcerated Georgians  are high school dropouts.

Jackson issued a clarion call to reinvent education so that the emphasis is placed on what the students need, not what the system needs.  That could include as many as 50% of high school seniors being simultaneously enrolled in either a two-year or four-year college.  He called the current system to task for keeping the students on the calendar that is convenient for the system, rather than a schedule focused on what is best for students.

McCutchen of the Georgia Public Policy Foundation praised Georgia’s leadership in online education and advocated for its expansion.  Caso of the U.S. Department of Labor, challenged education to make itself relevant to its students.  He spoke about making a link between “what students learn in the classroom and how it applies to the real world.”

Thurmond closed the first afternoon session.  His closing remarks said, in part,  “We are all in this together, white, black.   This is our recession.  This is our challenge to market, to inform, to educate.  Blessings come disguised.  But for the recession we would not be here today.  What might look like a challenge might be an opportunity.”

Persons who wish to discuss the Shaping Georgia’s Economic Destiny, or to make comments in general about Georgia’s employment recovery, may contact the Georgia Department of Labor by mail at jobs4ga@dol.state.ga.us …

Additional Resources

Georgia Department of Human Resources,www.dhr.state.ga.us

Georgia Department of Labor, http://www.dol.state.ga.us

Georgia State Economic Forecasting Center, http://www.robinson.gsu.edu/efc/index.html

IRS Earned Income Tax Credit explainer, http://www.irs.gov/newsroom/article/0,,id=205666,00.html

January 17, 2010 - Posted by mikekleinonline | Uncategorized | Earned Income Tax Credit, Georgia Department of Human Resources, Georgia Department of Labor, Georgia Jobs Conference, Georgia Public Policy Foundation, Georgia State Economic Forecasting Center, Kelly McCutchen, Michael Thurmond, Rajeev Dhawan