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Tuesday, April 10, 2012

Where Are The Jobs?

“When it becomes dominated by a collectivist creed, democracy will inevitably destroy itself.” — Fredrich August von Hayek

In a new Gallup survey, 9 of the top 10 U.S. markets with the highest job creation are in red states, states with a Republican governor. While 7 of the lowest 10 markets in job creation are in blue states, those with Democratic governors.

Gallup surveyed workers in the 50 largest metro areas about whether employers were hiring or letting people go during 2011. The spread is what Gallup calls their Job Creation Index.

Oklahoma City, OK led their list. Although, coming on the heels of abysmal March job creation numbers from the Labor Department, it's faint praise. Gallup noted, "Oklahoma City led because of the relatively low percentage of workers (12%) who said their employer was letting workers go or decreasing the size of its workforce."

Oklahoma City, Okla., had the highest score on Gallup's Job Creation Index among the 50 largest U.S. metro areas in 2011, followed by Pittsburgh, Pa., and several Southern metros. More than one in three workers in each of the top-performing metro areas said their employer was hiring or expanding the size of its workforce, Although, coming on the heels of abysmal March job creation numbers from the Labor Department, it's faint praise. Gallup noted, "Oklahoma City led because of the relatively low percentage of workers (12%) who said their employer was letting workers go or decreasing the size of its workforce."


The individual components of the metric reveal some other successes and challenges. The San Antonio, Houston, and Memphis, Tenn., metro areas reported the most hiring, while the Riverside, Calif., Virginia Beach, Va., and Las Vegas metro areas reported the most letting go.


The large metro areas in the South tend to have better job creation situations than those in the East and the West. Eight of the top 10 metro areas with the highest Job Creation Index scores are in the South, while eight of the bottom 10 are in the East or West.

It should also be noted that the largest metro areas overall — New York, Los Angeles, and Chicago — ranked closer to the bottom of the list than to the top.

Gallup's Job Creation Index tends to be a strong predictor of jobless claimsObama-Unemployed at the national level, and these results at the local level may also be an indicator of future local unemployment rates. The top five large metros in Gallup's Job Creation Index for 2011 had an average unemployment rate of 7.4% in January 2012, according to not-seasonally adjusted data from the U.S. Bureau of Labor Statistics, while the bottom five large metros' unemployment rates averaged 10.7%.

In this reporter's opinion, government doesn't create jobs, employers do. Nevertheless it's interesting that so many of the markets which reported relatively strong job creation were in states such as Oklahoma, Florida, and Texas that generally rank low in taxes, and, yes, government services.

Even with Pittsburgh, the Rust Belt city near the top of Gallup's list, Pennsylvania Governor Tom Corbett has made job creation and tax relief priorities.

These results would seem to support the GOP's contention that lower taxes encourage job creation and economic growth.

Even more troubling for Dems, the markets where the most folks reported employers were laying off workers were in blue states. Combined with increasing agony at the gas pump, soaring food costs, and depressed — and depressing — real estate values, this could potentially mean more trouble for the “O Team” if this turns out to be a pocketbook election, as many observers expect.

Conversely, if Obama manages to carry these states despite job losses, it may indicate that the nation has reached a tipping point at which more people prefer government benefits to a job.

Along with the jobs report Gallup also publishes and interactive political map showing the recent trends in conservative and liberal leanings in the states. A few examples of the so called “battle ground states” show slight increase in “leaning Republican” from 2009 to 2011:

  • Ohio: 2009, 37.0%, 2011, 41.2% and a conservative leaning increase of 3%
  • Virginia: 2009, 38.5% 2011, 42.3% and conservative leaning increase of 2.8%
  • Florida: 2009, 38.5%, 2011, 40.5% with a conservative leaning increase of 1.6%
  • North Carolina: 2009, 38.3%, 2011, 42.1% with a conservative leaning increase of 1.6%
  • Missouri: 2009, 37.5%, 2011, 42.8% with a conservative leaning increase of 5.2%

According to Gallup Mississippi is the most conservative state, while D.C. is the most liberal. Mississippi, Utah, Wyoming, and Alabama are the four most conservative states in the U.S., each with 50% or more of its population identifying as conservative. The District of Columbia and Massachusetts are the most liberal states. — no surprises here.

Gallup shows that more states have moved to GOP in 2011. Seventeen states showed a Republican advantage in party affiliation of at least five points in 2011, up from 10 in 2010 and 5 in 2008. Meanwhile, 19 states including D.C. showed a similar Democratic advantage, with 15 competitive Seventeen states showed a Republican advantage in party affiliation of at least five points in 2011, up from 10 in 2010 and 5 in 2008. Meanwhile, 19 states including D.C. showed a similar Democratic advantage, with 15 competitive.

Gallup also shows that Obama’s approval above 50% in 10 states and D.C. in 2011. President Obama's job approval rating exceeded the majority level in 10 states plus the District of Columbia in 2011. His ratings were highest in D.C., Hawaii, and Maryland, and lowest in Utah and Idaho, and declined in most states.

You can use this interactive map to make your own Electoral College predictions.

It should be noted that the top states in hiring are states with right to work laws.

As today’s government-union bosses push higher taxes, establish dues schemes to fund their bloated salaries and union-bought politicians, the evidence has become pretty clear: Government unions have become political, parasitic entities injuring taxpayers and the communities they control (see Central Falls and Providence, RI; Detroit, MI; and the once-great State of California for examples).

In the private sector, however, where taxpayers’ pockets are not in endless supply, the parasitic model of today’s unions, far too often, allows unions drain companies and ends up killing their hosts.

In large measure, the power unions have gained to cripple economies and companies comes from the ability to require workers to pay union dues (or have the workers fired from their jobs should they refuse to pay the union tribute).

In the public sector, union bosses have declared war on Wisconsin’s Scott Walker, Ohio’s John Kasich, Florida’s Rick Scott and, to a lesser extent, Arizona’s Jan Brewer, for their threats to union treasuries through collective bargaining reform.

In the private sector, however, while Indiana finally became the 23rd state inBroken_Handcuffs the nation to became a Right-to-Work state—which outlaws unions from having workers fired for refusing to pay union dues—other states like, Maine and Ohio are considering the reform, as well. (Note this page contains an interactive map showing the various states and their RTW laws.)

In Ohio, for example, where unions spent in excess of $30 million to crush reforms to the Buckeye State’s antiquated laws governing collective bargaining for government unions, the state is among the worst states in the nation to do business—only topped by California, New Jersey and New York.

In their Pyrrhic victory in beating back reform, Ohio’s union bosses demonstrated they can dominate a state, regardless of the price. This, in part, may explain why Ohio is losing more high-tech jobs than the national average and companies like NCR are moving to more business-friendly climes like Georgia.

In late March, Ohio’s Buckeye Institute released a report entitled: Ohio Right-To-Work: How the Economic Freedom of Workers Enhances Prosperity.

In the report [in PDF], Economist Richard Vedder and his colleagues state that Ohio’s residents would benefit if the Buckeye State enacted a right-to-work law, making Ohio a more attractive place to do business:

“The typical Ohioan today would have a higher income and standard of living if the Buckeye State had matched the nation in its rate of economic growth in recent decades. However, it did not, and one reason is that the labor climate in the state is unattractive both to businesses making strategic investments and workers wishing to work.”

In addition to pointing out that Ohio’s “substandard performance with respect to economic growth since the late 1970′s would have been eliminated if a right-to-work law had been adopted several decades ago,” Vedder and company estimate that personal income for a family of four would have been $12,000 higher annually if Ohio had a right-to-work law in 1977.

The report provides an excellent analysis on the history of unions’ legal authority to coerce dues from workers, as well as the emergence of states’ ability to enact right-to-work laws in 1947 and the chronology of individual states’ enactment of those laws.

The report also provides a history of Ohio’s failed efforts to enact a right-to-work law in the late 1950s—much of it due to a lack of a clear and cohesive campaign. Like the recent SB5/Issue 2 campaign, where unions outspent and out organized collective bargaining reform proponents, the lack of a united front (right-to-work proponents were besieged with internal divisions in the late-50s) gave unions the upper hand to defeat right-to-work and solidified union power for decades.

Unions and their union dues-funded think tanks, like the Economic Policy Institute, continue to downplay and fight right-to-work laws by claiming right-to-work states have a negative effect on wages.

However, the Buckeye Institute report addresses that issue as well:

“A recent study by Robert Reed helps clear some of the ambiguity by demonstrating that when one controls for the economic conditions of a state prior to its adoption of a RTW law, the relationship between RTW and wages is positive and statistically significant. Reed estimates that when “holding constant economic conditions in 1945—average wages in 2000 [were] 6.68 percent higher in RTW states than non-RTW states.”

The Buckeye Institute’s report on Ohio Right-to Work is an excellent read, both for the economic argument behind right-to-work, as well as the history of the effort in Ohio.

As Ohio continues to lag behind the nation due to the continued domination of unions in that state, over time, more may realize the right-to-work is right for Ohio (and elsewhere, as well).

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