ALBANY Officials from University of Georgia’s Terry College of Business say 2012 will see high unemployment and that Georgia will remain less competitive than other parts of the country.
Speaking to more than 100 local business and government leaders, the panel said that 2012 will see a high risk of a recession and slow growth, but predicted that when the federal spending bubble does burst, Georgia will fair better than the rest of the country.
Robert T. Sumichrast, dean of the Terry College of Business at the University of Georgia, told those in attendance Thursday that the recession did far more damage to Georgia on the whole than many other states throughout the nation and that damage could take a decade or more to fully repair.
Sumichrast said that Georgia is behind the curve nationally when it comes to righting the unemployment ship, saying that many states have successfully made the turn and are adding jobs to their local and regional economies, while Georgia has largely stopped the hemorrhaging of jobs but has yet to find a way to add jobs to the mix.
Sumichrast believes that Georgia is likely to replace the 365,000 jobs lost during the recession by 2020 assuming that there isn’t a significant economic event between now and then, a prospect he says isn’t likely.
“So in terms of 2012, we might see more slow growth; we might see more of the recession; and unemployment will remain very high,” Sumichrast said.
Sumichrast did say that Georgia was likely to close the production gap between it and the national average by 2013, which is a positive thing and said that Georgia is in good position when it comes to individual tax burden saying that, per capita, it’s at its lowest point in the last 20 years.
That being said, Sumichrast told the crowd that it is vital that the state adopt policies and procedures to shift the tax structure to one that is based more on consumption-based taxes such as user fees and sales taxes, from the current income-based system in order to promote job creation.
When it comes to creating jobs, the panel said Albany is bucking the state’s trend. While the area’s overall unemployment numbers remain some of the highest in the state, Albany managed to do something that the state as a whole failed to do last year, add jobs.
Beata Kolchut, a research analyst with the Terry College of Business, said that Albany added 1,000 jobs in 2011 and that predictions are that the area will continue to see small gains in the number of jobs throughout next year as the unemployment rate slowly begins to recede.
As Georgia works to shrug off the effects of the recession, it faces a real challenge in terms of remaining competitive against states who are fairing better.
“We’ve lost the edge that we had from the 1960s through the 1990s and if we ever hope to ever more than an average state again, we must change our economic policies,” Sumichrast said.
Sumichast said that the staples that the state has relied on in the past to turn its economic engine — increasing population and relocation of industries — likely won’t be enough to pull it out of the economic doldrums.
To fix it, Sumichast said the state needs to invest in research and development that promotes science and math-related fields, boost venture capital for emerging businesses so that they don’t get bought by established businesses out-of-state and find ways to put together incentive packages that allow it to “close the deal” with prospective companies so that a recent situation where Tampa, Fla., snagged a 500-job prospect from Atlanta doesn’t happen again.