The gubernatorial race in Georgia this year may mirror the one to come in North Carolina in 2016. In Georgia, Democrat Jason Carter, grandson of former President Jimmy Carter, is taking on Republican Gov. Nathan Deal with a stinging question: Where are the jobs?
Deal and the state’s Republican-controlled legislature have applied the usual GOP medicine to a state economy struggling to recover from a national recession: Cut spending, cut taxes and wait for a robust recovery. But while the national rate of unemployment has steadily fallen from a high of 10 percent in October 2009 to 5.9 percent in September, Georgia’s dipped from 10.1 percent to 6.9 percent and then went back up. At 8.1 percent, it’s the highest state unemployment rate in the nation.
In North Carolina, the pattern has been the same. Republican legislative leaders and Republican Gov. Pat McCrory trumpeted a decline in the state’s unemployment rate earlier in the year. It had fallen from 10.5 percent in December 2010 just before Republicans took over the General Assembly to 6.2 percent in April, a tick below below the national rate. But the rate has gone up for three of the last four months and hit 6.8 percent in August. September’s state rates will be released Oct. 21.
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The rise in the rate is puzzling because it’s going up while the state is adding jobs. The Wall Street Journal this week focused on the rising jobs/ rising jobless contradiction in Georgia, North Carolina and some other Southern states with a headline that called it “a Southern mystery.” Some of the contradiction is accounted for by sidelined workers resuming their search for work. Some can be explained by population growth. Some may reflect a gap between the two surveys that determine the jobless rate and job growth. And the unemployment rate may yet be revised downward.
Deal even suggested that the unemployment numbers might have been cooked by the Bureau of Labor Statistics. He said all states led by Republican governors had increased unemployment rates and Democrat-led states had lower rates. “Now I don’t know how you account for that, maybe there is some influence here that we don’t know about,” he said.
In the end, however, there’s no mystery. The persistence of unemployment points to how badly the job market deteriorated and how tax cuts and spending cuts do little to restore it. North Carolina has cut taxes in a way that disproportionally benefits higher earners while expanding taxes or removing exemptions that helped middle-income and low-income earners and retirees. Tax breaks for the wealthy tend to go into savings while a tax break for lower income earners would have gone directly into the economy.
North Carolina’s cuts in state funding for education have an outsized impact on the economy. Unlike many states where local governments bear most of the cost of schools, North Carolina funds education primarily from the state level. Meanwhile, North Carolina’s refusal to expand Medicaid has cost the state’s economy billions of dollars in federal funds and reduced or blunted employment by hospitals.
There’s not much state government can do to escape the influence of the national economy. But states can do more to soften the effects of a national recession and speed the effects of a recovery. North Carolina should spend aggressively on education, participate fully in the Affordable Care Act and focus tax breaks lower down the income scale.
That’s not being done, and the economic pain is being extended. Come 2016, the question in Georgia’s gubernatorial race may be echoed in North Carolina’s: Where are the jobs?