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Wednesday, February 08, 2006

Rendell the Benevolent Job Creator

You may have heard Governor Rendell's 2006-07 Budget Address, in which he once again touted his role in "creating jobs". By using selected statistics, crediting any job growth in the state to his economic policies, and arguing that having the 'most jobs in our history' (a frequent refrain), the Governor makes it appear that Pennsylvania has had strong job growth during his tenure:

" Each and every member of both chambers should be proud that we have more jobs in Pennsylvania now than at any other time in the history of this Commonwealth. Every legislator should take credit for the fact that we have moved from 46th in the nation in job creation to 15th. This means that since I took office, we have helped to create more than 120,000 additional jobs in Pennsylvania."

The rankings he use come from an organization called the CFED, which releases a biannual "Development Report Card for the States". Why does this selective citation not jive with what Pennsylvania has been experiencing?
  • In their 2006 rankings, while Pennsylvania does rank 15th in short term employment growth, it still gets a "D" grade for employment performance, ranking 36th.
  • The short term employment growth measures "change in average annual employment" for 2004 from the BLS household survey; the Commonwealth Foundation uses December to December employment from the establishment survey in our analyses. Generally speaking, the establishment survey is more typically used for job growth analysis (i.e. it is the source of Rendell's "120,000 additional jobs").
  • Pennsylvania's "improvement" on job creation represents only 2004 data vs. 2003 - in other words, Pennsylvania was one of the worst states in job creation in 2003 and was in the middle of the pack in 2004, according to CFED. As for 2005 - while annual averages have yet to be released, Pennsylvania grew by less than the national average, according to the household survey.
  • According to BLS establishment survey data - Pennsylvania ranks 38th in job growth during Rendell's tenure (change in employment from December 2002 through December 2005) and had we grown as fast as the national average, there would be an additional 55,000 jobs in the state that Gov. Rendell could take credit for creating.

While it is of course presumptuous and disingenuous for politicians to take credit for "creating" private sector jobs, Rendell wants to take credit for growing slower than most other states. While economic growth is not entirely dependant on lawmakers to take credit - or blame - for, it is clear that states which do have high job growth pursue very different policies than the Rendell administration - low taxes and spending, less regulation, and greater economic freedom.

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