After decades of growth, Georgia now facing a whole new economic reality
By Maria Saporta
The numbers are sobering.
Georgia’s boom days are becoming a distant memory. For decades, Georgia’s growth had far outpaced the nation’s growth rate. But that changed in the past decade, and economic forecasters predict this downward trend to continue in the coming decade.
Those numbers bring us to the hard truth. Georgia’s economy has been driven by growth and development. Either Georgia will need to figure out how to recapture its shine as a place to live or work. Or Georgia will have to restructure its economy to be less dependent on growth.
First the facts.
Since the 1960s, Georgia has enjoyed a multi-decade stretch of remarkable growth.
In the 1960s, Georgia experienced a 48 percent increase in jobs compared to a 31 percent increase for the United States.
In the 1970s, Georgia had a 39 percent gain in job growth versus 28 percent for the United States.
In the 1980s, Georgia’s job growth rate was still 39 percent versus 21 percent for the United States.
And in the 1990s, Georgia had a 32 percent gain in job growth versus 20 percent for the United States.
Then came the decades of the 2000s.
“In the decade of the ‘aughts,’ Georgia saw the number of jobs drop by 3.1 percent whereas the nation saw the number of jobs drop by 1.5 percent,” said Jeffrey Humphreys, director of the University of Georgia’s Simon S. Selig Jr. Center for Economic Growth. “The percentage decline was more than twice as steep in Georgia than for the United States as a whole.”
And for the coming decade?
Robert Sumichrast, dean of UGA’s Terry College of Business, told people attending the Economic Outlook lunch on Nov. 29 at the Georgia World Congress Center that Georgia will not replace the 360,000 jobs it has lost during the recession until 2020.
That’s four years later than the United States is expected to recover all the jobs that it lost in the recession — meaning Georgia will continue to lag the rest of the nation for years to come.
“Has Georgia lost its competitive edge in the United States?” Sumichrast asked rhetorically. “Clearly the answer is yes.”
This is not a comfortable place for Georgia to be. After all, this is not the way it’s supposed to be.
We are a Sun Belt state with tremendous assets, such as top quality colleges and universities, the largest and busiest airport in the world, a cluster of Fortune 500 company headquarters, relatively low taxes and a moderate cost of living.
All those ingredients have been mixed into a state that had been viewed as a place that could work through its differences (during the Civil Rights era) and as a place that welcomed the world (the 1996 Summer Olympic Games). The cherry on top was Atlanta — Georgia’s gleaming, thriving and progressive capital city.
But the sad truth is that we have been coasting on our former successes for years. And now reality has hit. Georgia is no longer viewed as a progressive, welcoming state. The state has matured, and it just hasn’t aged as well as other areas.
At one time, metro Atlanta was a magnet for the young educated people looking for the best place to jump-start their careers. Forward-looking states have found that appealing to college-educated youth is part of the foundation for a vibrant economic future.
But because they can choose where they want to live, young people are picking cities and states with great amenities — communities that offer a high quality of life for them — walkable live, work and play neighborhoods with sidewalks, bicycle lanes, parks, transit and a thriving arts and cultural scene.
The Brookings Institution listed the 10 cities with the highest percentage of workers with a bachelor’s degree or higher. Metro Atlanta is not on the list.
But the cities that are on the list do provide a clue as to the kind of places where those educated residents want to be.
The top 10 are: Boston-New Hampshire; Washington-Maryland-Virginia; Madison, Wis.; Raleigh-Durham, N.C.; Portland, Maine; San Francisco-Oakland-Vallejo; Seattle-Everett, Wash.; Austin, Texas; Lexington-Fayette, Ky.; and Denver-Boulder, Co.
In an article last week, the Wall Street Journal demonstrated that those 10 cities (with only one exception — San Francisco) were faring far better during the economic downturn than the national average in terms of unemployment rates.
On Nov. 30, the Atlanta Regional Council for Higher Education held a panel discussion on “How Colleges and Universities Drive Economic Growth” at the Commerce Club.
The bottom line was that if Georgia continues to invest in higher education, it will pay dividends for the state’s economic future. In answer to a question about the cuts in HOPE scholarships, Kennesaw State University President Dan Papp said that it could lead to “some of Georgia’s best and brightest” going “somewhere else.”
At the UGA Outlook lunch, Sumichrast exposed some other issues. He said a critical weakness is that Georgia ranks 34th among states in science and technology. Research and development of Georgia’s gross domestic product is “less than half the national average.” University research scores well, but Georgia lags in corporate and government research and development, he added.
When it comes economic development, Georgia also has lost its economic edge. “Because of low business costs and low taxes, Georgia often gets shortlisted on relocations,” Sumichrast said. “But Georgia does not have what it takes to close the deal…. Georgia will need to be more aggressive.”
Numbers, data and facts can be cold and cruel — especially when they zero in on Georgia’s weaknesses.
But they do give us an opportunity to face our new reality. And they also give Georgia and metro Atlanta an opportunity to strategically rise to the occasion.
David Pendered contributed to this column.