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Posts from the ‘Economic Development’ Category

Chapter III in my ongoing post-mortem of Georgia’s PCI performance from 1980-2020

Late last year, I posted two pieces about Georgia’s per capita income (PCI) performance.  I hadn’t intended to do that.  My original objective had been to take a quick look at a new release of 2020 PCI data from the U.S. Bureau of Economic Analysis (BEA), knock out a quick one-off, and move on. 

But one thing I always try to do, especially when I’m working with a national dataset, is put Georgia’s numbers into a national context.  When I did that with this latest batch of BEA data, I was surprised to find that Georgia had more people and counties at the bottom of the national PCI pile than any other state in the nation.

The straight blue line at the 100% mark represents the national average for per capita income (PCI). The orange line represents Georgia’s performance relative to that national average, based on data from the U.S. Bureau of Economic Analysis (BEA).

That became the lede of the first piece.  It also got my curiosity up, and I started backtracking through 50 years of BEA data to see if I could figure out what was happening.  That resulted in the discovery of what I described, in the second piece, as Georgia’s 40-year PCI roller-coaster ride.  The state made massive, almost unmatched gains during the final 20 years of the last century, then surrendered all those gains during the early part of this century.

As a long-ago political journalist (and now an aging political junkie), I couldn’t help but notice how the state’s PCI roller-coaster ride matched up against the state’s political timescale.  All the gains took place under Democratic governors; all the losses followed under Republicans.  I deliberately stopped short of ascribing credit or blame (and still do), but the pattern was (and still is) difficult to ignore.

The political question aside, I began to think the rise and fall of Georgia’s PCI trendlines is a significant part of the overall TIGC story — maybe a key driver in fueling the ongoing divide between urban and rural Georgia and, especially, Metro Atlanta and the rest of the state. I’ve since come to view the story as something of an economics and maybe political cold case, and I’ve spent an embarrassing amount of time researching various angles over the past few months (which is one reason I haven’t posted much lately).

Among other things, I began to pick the brains of various contacts who moved in political and economic development circles during that 40-year span; found and plowed through a couple of dozen relevant reports and articles, and took several deep dives into other pots of economic data for the 40-year period.

The result of that research is a couple of binders full of material and several storylines that are tough to bring together in a single piece and would be too long for a blog post even if I did. As a result, I’ve decided to dribble it out in a series of brain dumps that should, if nothing else, help me clear my head so that I can move on to other subjects (several of which have been stacking up over the past couple of months).

Brain Dump No. 1 follows.

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One of the first things I learned in my research is that the 40-year PCI roller-coaster ride I reported on in December wasn’t exactly breaking news.

It turns out that the Fiscal Research Center (FRC) at Georgia State University had been monitoring the same metrics (and others) for a while. In September 2013, the FRC published a 26-page report by Professor David L. Sjoquist that, among other findings, found essentially the same roller-coaster pattern I did late last year.

(I say “essentially” because there appear to be some very minor differences in some of the data Professor Sjoquist and his team found in 2013 versus what I found late last year.  I suspect these differences owe to periodic revisions and refinements BEA (which was also Sjoquist’s source) makes to its data.)

The Sjoquist report looked at population, employment, and income trends and noted, broadly, that the state’s growth rates appeared to be slowing.  It also mused about various potential causes for these trends, including poor public schools, the loss of jobs to other countries, bad traffic, even a “leadership vacuum” in the business community (which had indeed been undergoing a transition from an era dominated by homegrown barons like Robert Woodruff, Mills B. Lane and Tom Cousins to a new generation of imported CEOs who headed a wave of new Fortune 500 companies putting down stakes in Metro Atlanta). 

The closest it came to pondering the efforts of the state’s gubernatorial administrations was this bullet point in a section of the report focused on employment trends:

“Georgia may be pursuing the wrong economic development strategy, which currently seems to be focused on providing tax incentives. Perhaps a strategy that focused more on providing a better labor force, infrastructure, and amenities would result in greater net job growth.”

Nor did the FRC take note of the fact that the wind had gone out of the state’s economic sails only after the GOP took over the state capitol.  And, again, that may indeed have been coincidental.  Georgia’s economy was red hot through much of the 1980s and ‘90s, and nothing lasts forever. At least one important figure did seem to think gubernatorial focus was relevant to the state’s economic focus, however.

George Berry, who served as commissioner of the Department of Industry, Trade & Tourism (now Economic Development) under Governor Joe Frank Harris during the 1980s, put a bright spotlight on PCI in a guest column for Georgia Trend magazine in January 2011. Governor Sonny Perdue, the state’s first GOP governor in a century, was leaving office and his successor, Republican Nathan Deal, was about to begin his first term. 

In that piece, Berry wrote:

“As Gov. Nathan Deal begins his administration, he would do well to consider the over-arching accomplishment that defines Georgia’s advancement over the last half century: the progress we have made toward economic parity with the rest of the nation.

“That progress can be best defined by comparing the per capita income of Georgians to that of citizens of other states.

“For decades Georgians lagged in this elemental measure.  As late as the onset of World War II, we were barely at 60 percent of the national average per capita income.  This is not an abstract but rather an intensely personal statistic.  It measures how much education one can afford, how much healthcare one receives, whether one can take his children to a dentist and even how many culturally enriching experiences one can have.”

Berry concluded his column with this: “If our new governor can improve this vital statistic, he will be assured of a successful administration.  Because it is a measure easily calculated, everyone can keep score.  It is in all of our best interests that Gov. Deal be the one to celebrate that day when Georgia finally achieves 100 percent of the national average per capita income.”

(I wrote about Berry in this post nearly a year ago, and I’ll have more to say about his focus on PCI in another of these brain dumps.)

As things worked out, Georgia’s PCI performance under Deal was basically flat.  It gained a little ground in 2011, suffered a two-point drop in 2012, and then made slow but steady progress until the end of Deal’s second term in 2018.  At that point, Georgia’s average PCI stood at 86.7 percent of the national average; in Governor Brian Kemp’s first two years in office, that number ticked up ever-so-slightly to 87.0 percent – just under the 87.1 percent figure the state posted at the end of Joe Frank Harris’s first year in office.

Thus endeth Brain Dump No. 1.

Watch this space.