With election on horizon, governor’s job record up for debate

With election on horizon, governors job record up for debate

By Brett Sholtis / Staff Writer

Less than a year remains before Pittsburgh’s gubernatorial election, and Democrats and Republicans are already at odds over Gov. Tom Corbett’s jobs record.

Although the major parties both use federal or state economic data to back up their assertions, their conclusions about whether or not Corbett has fostered job growth couldn’t be more different. Republicans have built Corbett’s re-election campaign on a claim of record increases in employment, while Democrats say that the creation of new jobs has stalled during the governor’s time in office. In both cases, the parties are using the quirks of statistical data to exaggerate successes and failures, taking credit for things they didn’t do and blaming the opposition for things they had no control over, according to those who have studied macroeconomics at the state level.

Corbett, a Republican, announced his bid for re-election on Nov. 6. Currently, there are eight contenders for the Democratic nomination, and the primary election will be held on May 20. Billy Pitman, Corbett’s press secretary, said Corbett has lived up to his promise of job growth. Pitman attributed Pennsylvania’s job growth to Corbett’s embrace of Marcellus Shale, the geological formation under much of the state that is rich with natural gas. 

Pitman said shale development has generated more than $1.8 billion in state tax revenue, as well as more than $400 million in payouts to local governments as a result of legislation signed by Corbett in 2012 to offset costs to the local infrastructure or environment from natural gas drilling.

According to Pitman, 141,000 private sector jobs were created in Pennsylvania during Corbett’s tenure, a number that comes from a Pennsylvania Department of Labor and Industry report released last August.

But Beth Melena, a spokeswoman for the Pennsylvania Democratic Party, had her own number. 

Melena said that there have only been 75,000 new private-sector, non-farm jobs since Corbett took office. She said she came to this number by tallying up monthly job report data from the U.S. Bureau of Labor Statistics from January 2011, when Corbett was inaugurated, until July 2013.

Melena said it is important to compare job growth figures in Pennsylvania with those of other large states to provide context.

“Among the 10 largest states, of which we’re sixth,” Melena said in a prepared statement, “we gained the fewest jobs [in 2012].” 

She said that although Ohio, Georgia, Michigan and North Carolina are all less populous than Pennsylvania, twice as many new jobs were created in all four of those states than in Pennsylvania. 

Central to Melena’s argument is the assertion that when Corbett first took office, Pennsylvania was ranked 11th in private-sector job growth. It is now ranked 45th. These numbers come from a labor statistics website run by the W.P. Carey School of Business at Arizona State University in Phoenix. The website compiles data from the U.S. Bureau of Labor Statistics, providing rankings of U.S. states based on their rates of job growth, the numbers of jobs created and other factors.

But according to James Kenkel, an economics professor at Pitt, none of this means much of anything. 

“When talking about job growth, you should realize that, unlike the federal government, the state government is required to have a balanced budget,” Kenkel said in an email. “Thus, there really is not a lot that a state government can do to boost job growth.” 

Kenkel mentioned that cutting corporate tax rates is one of the few things a state can do to attract business, but Pennsylvania hasn’t done that. He added that Pennsylvania, as well as other states such as North Dakota and South Dakota, might show temporary job growth because of the recent unconventional gas drilling boom. But this growth is unrelated to the state government’s attempts to attract business.

As for job growth rankings, Kenkel said those numbers “are just due to random luck.” Kenkel pointed out that, according to the job growth website, California’s ranking went from six to 27, New Jersey from 27 to nine, Indiana from five to 24 and Georgia from 31 to eight from 2012 to 2013.

Lee McPheters, a director at Arizona State University’s W.P. Carey School of Business, oversaw the development of the job growth website cited by Melena and analyzed by Kenkel. According to McPheters, Pennsylvania ranked ninth in job growth in 2010, growing 0.1 percent. But because most states lost jobs that year, ranking in the top 10 did not require a significant number of new jobs.  

McPheters said that although Pennsylvania ranked 44th in job growth in 2012, the state added 42,200 jobs, which is about 10 times more than in 2010.

“Pennsylvania job growth in 2012 was much greater and more rapid than in 2010,” McPheters said. “But the average state was growing even faster, so ranked by rate of growth Pennsylvania lost ground.” 

McPheters also pointed out the difference between rate of growth and number of growth, and he said that Pennsylvania ranked 18th in number of jobs created in 2012. 

“Has job growth stalled?” McPheters asked. “No, it has increased … but slower than in the average state.”

McPheters also made a distinction between the number of jobs created overall and the type of jobs created. He said in August 2012, Pennsylvania ranked 10th in number of new jobs in professional, technical and science categories, with 8,600 jobs. The rate of growth in these categories was 2.7 percent, which was slightly less than the national average of 2.76 percent.  

“These are very desirable jobs to be adding,” McPheters said, and he pointed out that Pennsylvania was in the top five in number of new health care jobs, which are likely to survive a recession. But the state lost a lot of retail jobs, coming in at 49th place in this category.  

“So the loss in low-paying retail jobs has a negative impact on the overall ranking,” said McPheters.

Although McPheters stopped short of drawing conclusions about what exactly this means for job-seekers — and voters — in Pennsylvania, Kenkel said job growth isn’t a very good indicator as to who voters should choose.

“In my opinion, it is unreasonable to assume that all of these big jumps … are due to changes in government policies in each of those states,” Kenkel said.