Reality is Likely to be Far Less Rosy

by Erik Randolph | May 16, 2022

Reality is Likely to be Far Less Rosy

Reality is likely to be less rosy…

Some economists are hoping that inflation has peaked and will tick down in the coming months, after the pace of inflation slowed slightly in April. But Erik Randolph, director of research for the Georgia Center For Opportunity (GCO), warns that the reality is likely to be far less rosy.

“What we saw with the April Consumer Price Index was disinflation. That means the rate of inflation decreased but inflation is still occurring and our purchasing power is declining,” Randolph said. “Meanwhile, wage increases are lagging behind price increases. The vast majority of workers will have lower standardsof living because their budgets will not buy as much as in the recent past. Some workers will get handsome pay raises, but they will be the exception rather than the rule.

What’s needed?

“The core problem here is that the price level has risen, setting a new floor for costs. The only way to lower the price level, by definition, is to allow for deflation. But our policymakers are afraid of deflation because of the economic schools of thought that they adhere to. What is needed is new economic thinking in Washington, D.C. from economists who are not afraid of deflation but recognize it’s the only way to bring the price level down that benefits the most people. The mess we’re in now are the signs of stagflation, meaning the rising price level may be soon accompanied with slower economic growth and loss of employment. The only way to mitigate that scenario would be to adopt policies to allow for supply-side growth.”

New Research Predicts Long-Term Pain for Labor Market

by Erik Randolph | Apr 21, 2022

New Research Predicts Long-Term Pain for Labor Market

Long-term pain for labor market due to the COVID-19 pandemic

New research predicts long-term pain for the labor market due to around 3 million workers who plan to remain permanently sidelined over concerns of physical illness or physical impairment due to the COVID-19 pandemic.

The Georgia Center for Opportunity’s (GCO) take: “The authors of the long social distancing study have produced very helpful data on those no coming back into the labor force, estimating a 3.5 million shortfall in March by comparing the current observed level with a linear trend using the time period of January 2015 to December 2019 as the basis for the forecast,” said Erik Randolph, GCO’s director of research. “Using the current employment statistics survey instead of the current population survey, our own research shows a shortage of 6.6 million employed persons that would include persons holding multiple jobs. We use the same method of comparison by subtracting the forecasted data from the observed data, but instead of using a linear trend as the basis for comparison that can often overestimate the forecasts, or the reverse, we use an ARIMA forecast model, not for five years but starting at the low point after the Great Recession. In addition, our research provides forecasts and analyses for each of the 50 states where there is a wide disparity when it comes to job recovery.”

For more, read Randolph’s research report on the economic impact of the pandemic shutdowns.

Georgia Unemployment Rate: Lowest Record Since 1976

by Erik Randolph | Apr 21, 2022

Georgia Unemployment Rate: Lowest Record Since 1976

State unemployment rate stands at a record low

On Friday, April 15th, the U.S. Bureau of Labor Statistics released state employment numbers for Georgia. They show that our state unemployment rate stands at a record low of 3.1%, the lowest since the BLS began tracking in 1976.

The Georgia Center for Opportunity’s (GCO) take: “At 3.1%, Georgia is tied with Arkansas for the 16th lowest unemployment rate, a half point below the national unemployment rate of 3.6%,” said Erik Randolph, GCO’s director of research. “Georgia is among the 16 states that have recovered all the private employment lost due to the pandemic. According to our analysis, Georgia ranks 10th in the nation when comparing private employment to each state’s pre-pandemic private employment growth trajectory.”

“Labor force participation is still an area of weakness. Georgia’s rate ranks 26th in the nation. While Georgia’s labor force participation rate edged up from 61.9% in February to 62.1% in March, it is still below its pre-pandemic rate of 62.8%. It is also well below the states with the highest rates. Nebraska leads the nation with 69.8% participation, just 0.2 points below its pre-pandemic rate”

“The national economic picture is worrisome and can put a damper on the improving job picture. Rising inflation and supply-side problems are creating uncertainty that will impact entrepreneurial decision-making and alter the economic outlook. Some economic indicators are beginning to point to a possible economic slowdown. Although these prognostications are not certain, they are concerning.”

For more, read Randolph’s research report on the economic impact of the pandemic shutdowns.

Passed: House Bill 517

by Buzz Brockway | Apr 6, 2022

Passed: House Bill 517

The Georgia General Assembly passed a bill, which increases the cap on our state’s Tax Credit Scholarship Program

On Monday, the Georgia General Assembly passed House Bill 517, which increases the cap on our state’s Tax Credit Scholarship Program from $100 million to $120 million per year. HB517 also doubles the amount individuals, LLCs, and S Corporations may contribute and removes the automatic sunset of the program.

The Georgia Center for Opportunity’s (GCO) take: “The real beneficiaries of this legislation are the thousands of Georgia kids who will benefit from expanded access to a great education,” said Buzz Brockway, vice president of GCO. “We commend lawmakers for taking these important steps forward to strengthen the tax-credit program. At the same time, we’re disappointed the Senate retreated from raising the cap to $200 million as passed by the House. The new $20 million increase is a marginal gain and appreciated, but the program needs dramatically increased capacity. Our hope is that lawmakers will raise the cap even further in the next legislative session.”

State Unemployment Rate Stands At a Record Low of 3.2%,

by Erik Randolph | Mar 28, 2022

State Unemployment Rate Stands At a Record Low of 3.2%,

Unemployment rate stands at a record low of 3.2%

On Friday, the U.S. Bureau of Labor Statistics released state employment numbers for Georgia. They show that our state unemployment rate stands at a record low of 3.2%, the lowest since the BLS began tracking in 1976.

The Georgia Center for Opportunity’s (GCO) take: “Georgia’s unemployment rate should be cause for celebration. Our state ranks 15th in the nation on this metric,” said Erik Randolph, GCO’s director of research. “On the less positive side, Georgia continues to have a labor force participation problem. Our labor force participation rate is only 61.9%, and we know that for 2021, there were around 250,000 men between the ages of 25 and 54 (the prime working years) who were absent from the labor force. That’s a staggering 12.3% of the 25-54 male population. Policymakers in Georgia must work harder to integrate our state’s workforce services with safety-net programs to encourage participation in the labor force. We also must remove barriers to entrepreneurship and allow businesses and start-ups to be unleashed, helping to reduce inflation and employ more people.” For more, read Randolph’s research report on the economic impact of the pandemic shutdowns.

Approved– Senate Bill 601, the Georgia Education Freedom Act

by Buzz Brockway | Mar 11, 2022

Approved– Senate Bill 601, the Georgia Education Freedom Act

The Georgia Senate Education and Youth Committee has approved Senate Bill 601, the Georgia Education Freedom Act, by a 6-4 vote.

The bill would create Promise Scholarships, offering Georgia families up to $6,000 a year for any approved education expense, such as private school tuition, tutoring, homeschool curriculum, virtual classes, college classes, therapies (for kids with special needs), technology, etc.

The Georgia Center for Opportunity’s (GCO) take: “Promise Scholarships step far beyond a typical voucher by fully putting parents in the driver’s seat when it comes to their child’s education,” said Buzz Brockway, GCO’s vice president of public policy. “The funds could be used for private-school tuition, but there is added flexibility depending on each family’s unique needs, extending to paying for things like tutoring, specialized therapies, or homeschool co-ops. Passing Promise Scholarships would put Georgia at the forefront nationally of giving all children the opportunity for a great education.”