Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

"Observe that the 'haves' are those who have freedom, and that it is freedom that the 'have-nots' have not." Ayn Rand

"The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." Ayn Rand

20 May 2014

Is New York State Really a Great Job Creator?

New York state government is spending its taxpayer's money advertising 10 areas near state universities into which a new company or an out-of-state company can move and pay no taxes for 10 years, provided the government likes your business and is given significant controls over your business.  Mostly New York's Democrat Socialist Party controlled government likes certain high technology companies, such as biotechnology companies.

They do not like the vast majority of businesses, at least not enough to give them any tax breaks.  Indeed, most businesses have to be taxed heavily so that the few anointed companies can be lured into the high tax trap of New York and so such advertising can be carried out in Maryland and Oklahoma and many another state.  Even more expensive is the huge welfare state apparatus of New York state.  The only way to fund that redistribution of income is to tax both businesses and better paid persons heavily.

Among the claims in the ad, New York state government claims it has created 400,000 jobs.  They neglect to say over what time period and whether these are net jobs or these are all new jobs with any lost jobs ignored.  The high tax and heavily regulated state of New York is undoubtedly very good at killing jobs, so it is perilous to ignore the jobs destroyed.  According to the Bureau of Labor Statistics, the non-farm seasonally adjusted establishment job tally of private sector jobs increased in New York state from March 2013 to March 2014 by 103,500.  So maybe the 400,000 jobs were net jobs since the depth of the never-ending Great Socialist Recession.  They were not recently created net jobs.  I have ignored any added government jobs since such jobs would only create greater burdens for any private sector company moving to New York.

New York claimed that the 400,000 jobs were the second largest number of jobs created in any state in the US.  In 2010, New York state was the third most populous state, so just to stay even on jobs, it would likely have to produce at least the third most jobs.  Actually, New York state has a population growth estimated from 1 April 2010 to 1 July 2013 of 1.4%, which lags the population growth of 2.4% of the nation as a whole.  What is more, a larger fraction of its population is over 65 years old and a smaller fraction is under 18 years old.  There seems to be no rush of people into New York state owing to good jobs, despite the huge sums of bailout money that the federal government has dumped into New York City and its financial institutions.  That bailout in the form of quantitative easing continues to this day.

Let us examine the growth in the number of non-farm private sector jobs relative to the other states:

There were 26 states in which a higher percentage private sector job increase occurred compared to the 1.45% increase in New York.  This is not such a remarkable achievement by New York as it is represented to be in its ubiquitous ad.  The New New York is not so very different.  It is North Dakota that is the jobs creation giant, albeit in percentage terms only.  Six states have had private sector job growth rates more than twice that of New York state.  In fact, we can see that in this recent period, the claim that New York created the second most jobs in number is clearly wrong.  The population of the state of Texas is greater than that of New York and its job increase of 2.99% clearly means it added many more jobs than did New York.  The population of Florida is about the same as that of New York, so its job increase of 3.49% also means more jobs were created in Florida than in New York.  So, in this time period, at least two states added more jobs than New York did.

The New York state government is running an ad which is very misleading.  There may be some convoluted manner in which it is not a literal lie, but it is surely a serious attempt to mislead the People.

The employment increases in the table above allow us to make a few interesting comments about some other states and the possible presidential prospects for their governors.  Note that Gov. Rick Perry's state of Texas is still tearing up the racetrack in creating jobs with a 2.99% increase between March 2013 and March 2014.  On the other hand, Gov. Chris Christy of New Jersey heads a state government where the private sector job increase is essentially zero at 0.07%, the next to the worst record of any state.  Gov. Scott Walker of Wisconsin has a state with a 1.24% increase, a 32nd ranking counting DC, but at least greater than the population growth in that time.  Gov. Bobby Jindal of Louisiana has a state that is not doing great in the business of job creation either at 1.08% increase and a rank of 35.  On the Democrat Socialist Party side, Gov. Martin O'Malley of Maryland earns his moniker of O'Folley with 40 straight tax increases, a job increase of only 0.52%, and a ranking of 45.  Maryland's population since April 2010 is estimated to have grown by 0.90% a year, so Maryland is not keeping up with the population growth with its meager 0.52% increase in jobs.  I marvel at the ability of some governors to seek higher office when they have not demonstrated that their states can create private sector jobs.

The People should be paying attention to this.  I will acknowledge that some of these states were basket cases and it will take several good governors to allow private industry to turn the states around.  Their state governments have bollixed up the state economies for a very long time in many cases.  The damage done can take a long time to correct and the healing process can take time.  Yet, when good government policies are established, some great results often occur quickly.  The engine of growth is in the private sector, but governments have to stop stuffing the gas tank with sand and sugar.

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