Georgia is one of the top states for economic freedom

Georgia is one of the top states for economic freedom

by | Mar 7, 2023

Financial freedom - ATL

Georgia is one of the top states for economic freedom

Key Points

  • Georgia continues to be one of the most business friendly states. 
  • Georgia did not impose strict lockdowns during the pandemic. 
  • We believe that when the government refrains from heavy-handed intervention in the economy, everything from community life to poverty rates, job opportunities, upward mobility, and life expectancy will keep getting better.

Georgia is one of the most economically free states in the entire country, and that means more opportunity for our residents. That’s according to a new report from the Fraser Institute that tracks economic freedom in North America.

It’s clear that people across the country are realizing what a great place Georgia is to work and raise a family. According to Census.gov, Georgia is also among the top 10 most populous states in the U.S., and our population grew during the COVID-19 pandemic. We believe that our economic freedom is directly tied to this influx of new Georgia residents who moved into the state between 2021 and 2022.

The Fraser Institute report backs this statement. In the report, five out of the top 10 states for economic freedom are also in the top 10 list for population growth. Conversely, virtually all the states (roughly 17) losing population over the last few years are among the worst states in the nation for economic freedom.

“The truth is, the economic results Georgia has enjoyed over the past few years translate into our people’s wellbeing.”

“The truth is, the economic results Georgia has enjoyed over the past few years translate into our people’s wellbeing.”

A closer look at Georgia’s economic freedoms

Relative to other states in the U.S., Georgia has a low tax burden. This includes income tax and business taxes. Georgia also has a relatively low regulation on businesses and sole proprietors. 

Georgia’s economic freedoms were already in place before the COVID-19 pandemic, but they became more apparent during the 2020 lockdowns. The Fraser Institute’s study covered the first five months of COVID restrictions in North America, and it showed that many of Georgia’s economic improvements were the direct result of the lack of tight restrictions in our state. 

During 2020, Georgia didn’t impose widespread lockdowns or restrictions. We lifted those restrictions as quickly and reasonably as we could, given the situation. Without the burden of long-term, severe economic restrictions and COVID-related mandates, we gave people and businesses room to grow. 

 

The good life, with room to grow

The truth is, the economic results Georgia has enjoyed over the past few years translate into our people’s wellbeing. Our economic freedoms here directly impact the daily lives of people from all backgrounds. By virtue of the state government’s low level of intervention, our communities are positioned to continually improve over time. 

While economic freedom may not be experienced the same way by all (because the poor in a free state may not — and likely do not — feel very free), economic freedom generally means that even the poor benefit. That’s because, in free economies, there’s more charitable giving, more organizations who can help, and more job opportunities to help someone escape poverty for good.

Here at Georgia Center for Opportunity, we believe that when the government refrains from heavy-handed intervention in the economy, everything from community life to poverty rates, job opportunities, upward mobility, and life expectancy will keep getting better. We’ll draw people here who want to share in and enjoy those economic opportunities. And together, we can continue working toward creating a brighter future for our state and the people who live here.

Inflation continues to worry Georgians, groups say

Inflation continues to worry Georgians, groups say

by | Feb 22, 2023

In The News

Inflation continues to worry Georgians, groups say

Inflation will likely stick around for the foreseeable future, and the elevated inflation continues to worry Georgia businesses, groups said.

The U.S. Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers increased by 6.4% over the past 12 months, higher than anticipated. Additionally, the Producer Price Index increased by 6% over the same period.

“After a few months of apparently cooling inflation, it’s obvious that inflation is proving to be sticky and will be around for quite some time,” Erik Randolph, the Georgia Center for Opportunity’s director of research, said in a statement. “The core problem is that the Federal Reserve’s goal is merely to reduce the rate of inflation, not bring down the high prices we are already seeing.

“That means the cost of essentials like eggs and milk will remain elevated,” Randolph added. “The impoverished, lower income Americans, and seniors living on fixed incomes will continue to suffer the most.”

Read the full article here

 

Year-over-year inflation rate now stands at 6.5%

Year-over-year inflation rate now stands at 6.5%

by | Jan 12, 2023

inflation

Year-over-year inflation rate now stands at 6.5%

Today the U.S. Bureau of Labor Statistics announced that the Consumer Price Index (CPI) dropped 0.1% in December, meaning the year-over-year inflation rate now stands at 6.5%. The Bureau also released the 2022 annual average price level, which was 8% higher than 2021.

The Georgia Center for Opportunity’s (GCO) take: “We keep seeing positive headlines about the inflation rate, but that good news is lost on average Georgians who are continually pinched on the cost for everyday necessities like groceries and gas,” said Erik Randolph, GCO’s director of research. “Although there was some positive news in the December numbers, it’s important to keep in mind that core inflation remained elevated, including for food. If policymakers in Washington truly want to help the most economically vulnerable in our country, they must return to fiscal sanity and rein in the spending. Federal Reserve Chairman Jerome Powell remains steadfastly committed to bringing down inflation, and hopefully the change of political leadership in the U.S. House will mean more responsible federal spending. The policy goal should be to repeat the general decline in prices as what happened in December so the price level slowly comes back down. This will extend the opportunity of a higher standard of living for everyone, the rich and poor alike.”

Erik Statement
Inflation continues to worry Georgians, groups say

Welcome lawmakers to Atlanta for the opening of the 2023 session

by | Jan 9, 2023

In The News

Welcome lawmakers to Atlanta for the opening of the 2023 session

The Georgia Center for Opportunity issued the following media statement welcoming lawmakers to Atlanta for the opening of the 2023 session of the Legislature on Jan. 9.”We’re excited to see what the new session holds for our state, and we stand ready to assist lawmakers in passing an agenda that serves all Georgians,” said Buzz Brockway, executive vice president of public policy for GCO. “GCO has served our state for nearly 25 years, and has dedicated itself to expanding opportunity by helping increase access to quality education, fulfilling work, and healthy family life. We know that by addressing these critical barriers we can help pull communities out of poverty and expand opportunity to every community in our state.”As an organization, GCO stands ready to provide resources and education to lawmakers on the impact policies have on underserved communities and the opportunities available (and not available) to all Georgians. Here are three key area:
Eliminating benefits cliffs
    • Some workers find themselves torn between taking steps toward a more secure future, but ultimately forced into making decisions that traps them into long-term dependence on government benefits. These are known as benefits cliffs. We’ll be working to educate lawmakers on this reality and propose reforms to ensure all workers have the opportunity to climb the economic ladder. Learn more

Expanding educational freedom

    • We are still uncovering the extent of learning loss experienced by kids during the pandemic. We know that expansion of educational opportunityis a key solution to this problem. Passing Education Scholarship Accounts, or ESAs, will be a big step forward in helping all Georgia students achieve their full potential.

Promoting an anti-poverty agenda

    • GCO is part of the Alliance for Opportunity, a three state network of policy organizations built around furthering an anti-poverty agenda. We will be working with lawmakers to promote solutions to poverty that lift Georgians up into the middle class.
Key Policy Takeaways from 30 years of Child Poverty Decline

Key Policy Takeaways from 30 years of Child Poverty Decline

by | Oct 25, 2022

child poverty

Key Policy Takeaways from 30 years of Child Poverty Decline

Key Points

  • Childhood poverty leads to worse educational attainment, worse future labor market outcomes, worse mental and physical health and development, and increased risk of engaging in delinquent behavior.
  •  A reduction in child poverty is tied to government programs which incentivize work. 
  • The key takeaway from the Census data which shows child poverty rates are falling and the Child Trends report which studied the causes of the decline is that, despite massive social safety net expansions, work and self-sustainability still played a larger role in lifting children out of poverty than government spending did.

by Alexander Adams

 

In a world marred by clickbait media headlines portending disaster, it’s always a relief when some rosy news can sneak its way into a major publication: “Poverty, Plunging” was the title of a recent New York Times newsletter. Fortunately, there happens to be strong backing for such a direct headline: According to a recent report by the firm Child Trends, a nonpartisan research center, in 1991 27.9% of children lived at or below the Census’ Supplemental Poverty Measure. Today, that number has fallen to 11.4%. 

This is undoubtedly fantastic news. The research is unequivocally clear: children living in poverty face worse lifetime outcomes on a whole host of measures. Childhood poverty leads to worse educational attainment, worse future labor market outcomes, worse mental and physical health and development, and increased risk of engaging in delinquent behavior. The reduction in child poverty makes the lives of millions of children better off and has positive externalities for everyone in the country.  

The Child Trends report asked a few fundamental questions regarding this amazing decline in child poverty, the key one being: what exactly caused this massive decline in child poverty?

According to the media’s portrayal of the report, the reduction was due to expanded social safety net and increased social safety net spending. Another New York Times article on the Child Trends report was headlined: “Expanded Safety Net Drives Sharp Drop in Child Poverty.” Opinion writers at the Washington Post took it a step further, arguing that the decline in child poverty since the 1990s debunks “arguments that…government help must be accompanied with work requirements.”  

But does it really?     

According to the Child Trends report itself, many of the programs proven to be successful in reducing poverty—the Earned Income Tax Credit (EITC), the Child Tax Credit, the Supplemental Nutrition Assistance Program (food stamps)—have work requirements. The EITC is actually an earnings supplement which has been shown to incentivize work. The expansion of work requirements for welfare programs in the 1990s increased labor force participation, according to research, which translated into more income and less poverty. 

In 1991 27.9% of children lived at or below the Census’ Supplemental Poverty Measure. Today, that number has fallen to 11.4%. 

In 1991 27.9% of children lived at or below the Census’ Supplemental Poverty Measure. Today, that number has fallen to 11.4%. 

The increased post-tax income due to work incentives and requirements has not only reduced poverty and increased income, but has had nonfinancial impacts as well such as improved educational outcomes for children. The Georgia Center for Opportunity has previously published work on the deleterious nonfinancial impacts of nonwork. Figure 1.1 of the Child Trends report also shows that child poverty was stagnant from the beginning of the War on Poverty to the mid-1990s. The decline in child poverty occurred after we replaced our no strings attached welfare system with a system replete with pro-work incentives and requirements (though, work remains to be done). 

Given all of this, it should be argued, based on the results of the report, that it was pro-work reforms and expansions to earnings supplement programs which directly promote work and self-sustainability that reduce child poverty — not unrestricted government spending.

Not only that, but according to the Child Trends report itself, the vast majority of the decline in child poverty is attributable to increases in earned income and not expanded social safety net programs. According to the report, child poverty fell 16.5 percentage points — from 27.9% to 11.4% — between 1993 and 2019. In 2019, they argue the child poverty rate would be 44% higher in the absence of social safety net expansions. This means, of that 16.5% drop, approximately 6% can be attributed to social safety net spending and over 10% is due to non-governmental factors.[1] 

These other factors represent the effect of earned post-tax income not provided by aid. While the social safety net played a role in material child poverty reduction, we can see that private income played an even larger role in that decline. 

At GCO, we promote self-sustainability and work precisely because we understand that work plays a larger role in lifting oneself up from poverty than government aid — and the Child Trends report supports that argument.

The key takeaway from the Census data which shows child poverty rates are falling and the Child Trends report which studied the causes of the decline is that, despite massive social safety net expansions, work and self-sustainability still played a larger role in lifting children out of poverty than government spending did. Further, among the programs which did measurably help the poor, it was policies oriented towards promoting work, not programs without work requirements, which usually had the largest impact.

[1] As the child poverty rate in 2019 was 11.4% in 2019, and it would be 44% higher without social safety net expansions, this means, without social safety net expansions, child poverty would be approximately 16.4% (11.4*1.44 = 16.4). 16.4 (no welfare) minus 11.4 (reality) = 6%. This means approximately 10.5 percentage points of the 16.5% decline in child poverty was due to increases in earned income, and only 6 percentage points due to social safety nets (16.5 – 10.5 = 6).